The industry's footfall took a hit as non-emergency visits were discouraged.
With the unlocking of economy and announcement of various unlock guidelines, patient footfalls in India's hospitals are expected to improve as demand from non-COVID patients gathers pace, according to a report from CARE Ratings.
Whilst operations of healthcare industry are estimated to return to normal levels only from Q3 FY2021 onwards, operations might not yet return to pre-pandemic level rates in the current quarter for all healthcare players in the country. However, e-consultations and other home care services could support sector growth.
"Moreover, international patients are also allowed to travel to India for medical treatments (though with certain conditions) and this will benefit healthcare units that have a fair share of international patients," the report stated.
The healthcare industry was allowed to function smoothly amidst the pandemic, but primary importance was given to the treatment of COVID-19 patients. As a result, the government had encouraged suspension of routine services and non-emergency services by hospitals.
Some hospitals also suspended outpatient departments (OPD). Because of this, footfalls in hospitals were affected. This reflected in a 28% YoY decline in sales in the hospital and healthcare services industry in Q1 FY2021, and losses amounted to 7.7% of sales during the quarter.
The average revenue per occupied bed (ARPOB) for the top five players in the industry dipped 4.3% YoY to $430.25 (Rs.31,910) during Q1. Limited and emergency surgeries and low occupancy increased the ARPOB for the players.
Meanwhile, hospitals with more COVID-19 patients saw a lower ARPOB. "Moreover, treatments for COVID patients have a price cap set by various state governments," the report stated.
Further, hospitals that mainly deal with non-high priority treatments that could be deferred in a later time, like dermatology and orthopaedic services, have seen their ARPOB come down.
The occupancy rate of the top five players also dropped by a sharp 40.4% to 34%. Lower patient visits did not just hit the hospitals segment, but also the diagnostics and testing segment.
"Fall in volumes of tests conducted by diagnostic centres due to decline in flow of samples from hospitals, clinics, OPD centres, local clinics and doctors—along with higher costs associated with Covid-19 tests (that gains traction)—affected the profitability of these units," the report stated.
The easing of lockdown restrictions from June has helped the industry, with footfalls improving on sequential basis, supporting occupancy rates and diagnostic tests from non-COVID patients.
Do you know more about this story? Contact us anonymously through this link.