Design fiscal stimulus for public health, remove policy bottlenecks: Dr Alok Roy

As caregivers we are learning on the job, as no classroom theory could have helped us break the shackles of the COVID-19 virus, says Dr Alok Roy, Chair, FICCI Health Services Committee and Chairman, Medica Group of Hospitals. Listing the key policy changes required from the government to revive the sector, he says a specially designed fiscal stimulus can be funneled into public health and policy bottlenecks must be removed so that the sector becomes the engine of GDP growth. Though public-private-partnerships (PPPs) in the healthcare space In India have had limited success so far, he explains why he feels PPPs are one of the optimal solutions to tackle this pandemic, in an interaction with Viveka Roychowdhury

What has been the key learnings from the COVID-19 pandemic so far?  

 COVID-19 has been undoubtedly the most devastating public health emergency in the last century. It reminded the entire generation that we are mere pawns in the hands of nature. Being in healthcare, we have earned the epithet, frontline warriors, deservingly so. As health workers it is our duty to serve the society at large. As caregivers we are learning on the job, as no classroom theory could have helped us break the shackles of the virus. The pandemic has made us better at learning on the go. Private healthcare services, which have long been neglected politically have risen to the occasion to save the populace. With nearly 80-90 per cent of COVID patient care being provided by the private sector, we have accepted this untimely challenge and taken it head on, ably supporting the public healthcare at large.

Some of the major learnings are to not take life for granted. We must all learn to be flexible and engage the pandemic on the front foot. Hospitals across the country did this over the last few months. Another key learning is that in India, about 86 per cent of patients are asymptomatic or mildly symptomatic. We are dealing with the remaining moderate to severe patients who need hospital care.

Over time, we have learnt, adapted and become extremely skilled at ICU patient care. With no clear evidence and strategies for ICU care at the beginning of the pandemic, our experiences have taught us well. The Indian healthcare system was not well equipped to deal with a pandemic of this nature, so we redesigned our infrastructure, treatment protocols and processes. This allowed us to protect our employees as well as the COVID and non-COVID cohort of patients.

Healthcare has undergone a 360-degree transformation while fighting COVID-19. The healthcare sector has taken a massive financial hit and for healthcare to emerge strong from this crisis, the health budgets need to be substantially upgraded. India’s public health expenditure stood at 1.15 per cent of its gross domestic product – this must take a quantum leap and must be more than doubled to reach the goal of 2.5 per cent set by the National Health Policy 2017, while being further increased to 3 -4 per cent of the GDP in medium term.

To what extent is the profitability of hospitals in India affected due to the COVID-19 pandemic? What measures are private hospitals taking to improve sustainability, in the face of increased cost of treatment of COVID-19 patients, slow pick up of non-COVID elective surgeries due to fear on part of patients etc?

The coronavirus lockdown has had an adverse impact on the financial health of private healthcare providers. First, social distancing and localised curfews have delayed elective surgeries, which typically account for 60 per cent-70 per cent of volumes. Second, visa cancellations have led to a hiatus in medical tourism, which constitutes 10 per cent- 12 per cent of industry revenue. The most immediate drops have been in those paying cash and in insurance patients who often are the most discerning lot and provide most of the liquidity and revenue for hospitals. Many small hospitals and nursing homes, especially in Tier-II and -III cities, have been forced to shut down since their cash flows have dried up. Any possible ramp-up will be gradual, taking at least three quarters for return to normalcy. Recovery expected over the course of the next 12 months, with 80 per cent looking at returning to pre-COVID revenues by June/July 2021.

The Prime Minister’s call to honour healthcare professionals has indeed been a morale booster. However, with dwindling revenues for a capital intensive industry like healthcare, we are looking forward to government measures in terms of liquidity infusion, tax reliefs and other waivers which are crucial for the survival of healthcare providers.

Medica Superspecialty Hospital, is one of the safest hospitals in Eastern India where both COVID and non COVID patients are treated with equal care and protection in separate wards and ICUs. While Medica treats the largest number of COVID-19 patients in this part of India, the numbers of patients who are coming here for elective cases is significant as well. This is happening as we maintain staff and patient safety across all levels with our stringent processes and continuous training and supervision.  With businesses seeking to ‘repair’, ‘rethink’ and eventually ‘reconfigure’, accelerating digital enablement has become a strategic priority. We are providing tele-medicine and home care service to non-COVID patients in these trying times. We are prioritising the non-COVID admissions into the hospital and easing the operations around them by extending a single point of contact.  We have opened two satellite centres in the near vicinity of Medica where we are housing COVID-19 patients who do not need to be admitted. Medica has also started home isolation services where few hundreds have been enrolled and successfully discharged. And, we have hundred plus beds to treat COVID-19 patients which makes us the largest hospital to do so as a private player.

What initiatives and recommendations has FICCI forwarded to the central and state governments on the pricing of COVID-19 treatment? What has been the response from the authorities? 

FICCI has listed proposed rates according to the category of patient: whether he/she is government-referred, paying out of his pocket, or with insurance. Depending on these categories, and whether the patient is admitted in an isolation ward or ICU (with or without a ventilator), it has suggested a cap of Rs 13,600 to Rs 68,000 per day. The rates based on an analysis of 150 actual COVID treatment cases in major private hospitals are indicative and there may be individual variations to the extent of 5-10 per cent. The rates suggested by FICCI include medicines, consumables and basic diagnostics, but don’t include treatment for patients with co-morbidities and the cost of high-end drugs. The industry body said for patients covered by TPAs, rates in isolation wards will be Rs 20,000, in ICU without ventilator is Rs 55,000 and in ICU with ventilators will be charged at Rs 68,000 per patient.

FICCI has spoken on private hospitals struggling with declining revenues on account of decreased outpatients and falling in-patient occupancy levels which have resulted in significant cash flow challenges, including managing payroll, material and finance costs. Therefore, the body has requested the government to create individual escrow accounts for each hospital and pay the treatment amounts in advance to ease the liquidity challenges during this difficult period.

Private hospitals have participated in Government schemes like CGHS, ECHS, WBHS, ESI but payment have been delayed. What is the amount stuck with the Government (both center and state respectively) and since when it is stuck at the Government’s end?

Along with Ayushman Bharat there are three major government schemes that hospitals and nursing homes cover. The Central Government Health Scheme or CGHS, the Ex-Serviceman Contributory Health Scheme (ECHS), with respect to West Bengal, WBHS and the Employee State Insurance (ESI).

Currently several hundred crores are stuck on account of these flagship schemes across India. These schemes should ease the release of the pending bills’ amounts, either ensuring that funds are released as per agreement or releasing an ad-hoc amount against the outstanding which will help the corporate hospitals to function on a day to day basis when cash flows are severely hit.

What is the industry’s list of expectations from government to make the sector more resilient and sustainable in terms of financial viability?  

 This pandemic has jarred us.  Healthcare should be topping the priority list! The first and most obvious expectation would be for our government to increase its expenditure on health, so that it can improve existing facilities as well as further build capacity. India has traditionally spent less on health, with 90 per cent of government expenditure being on the revenue side.

The emergency relief fund can come in the form of releasing pending payments on account of the central and the state level government schemes.

Government should also exempt GST on procurements by private hospitals for all such goods and services that are directly linked to in-patient services or refund of the input GST while procuring any goods or services that may be used for in-patient services.

Corporate hospitals also looking for government’s help in getting electricity at domestic rates rather commercial rates till such time the revenue hits normal levels.

In return, how is the sector willing to partner the government to make healthcare more affordable and accessible in India? Do you feel that the COVID-19 era has proved that the public and private sectors need to collaborate more as they complement each other? Thus, do you see more scope for PPPs, even though they have not been so successful in healthcare so far?

A specially designed fiscal stimulus can be funneled into public health and remove policy bottlenecks so that the sector becomes the engine of GDP growth. Subsidised loans, earmarked land, single-window approvals, tax holidays, can be used for making medical devices, drugs and setting up hospitals. The private sector should help the Government in setting up hospitals, clinics, and other such healthcare facilities. It can do so by reverse auctioning land and reducing red tape. In the urban areas, large hospitals should be set up on a Public-Private Partnership (PPP) basis. Countries such as the UK and Australia too have their own approach to PPPs, wherein they focus on the “development/rehabilitation of facilities and facilities management”. In India both the private and government bodies must follow such PPP model to strengthen the healthcare system.

‘Build-Own-Operate-Transfer’ (B.O.O.T) model would undoubtedly be beneficial to all stakeholders.

Further, increasing domestic manufacturing and sourcing, building new logistics and distribution models, new products and services, and collaborations to augment capabilities should be implemented immediately.

As we unwillingly enter into the coronavirus epoch, which will be around be around for some time now, PPPs are again in the forefront as one of the optimal solutions to tackle this pandemic—a disease that has crippled economies, infected more than 24 million people across 213 countries and territories around the world, and caused over 825,00 deaths worldwide (as of August 27, 2020).

In reality, PPPs however, need not be seen as a package of solution for all the shortcomings associated with traditional healthcare delivery and pandemic preparedness. What is critically needed at this juncture are partnerships between the public and private sectors that will address short, medium and long term challenges. Short-term measures (0–12 months) will naturally be dynamic while medium-term efforts (1–5 years) will include more proactive, formalised strategies for sustainability and resilience. In the long term (5+years), these initiatives may ultimately expand to transnational settings.

The COVID-19 pandemic has resulted in humongous quantities of single use PPEs, medical kits, bio-hazardous material, which is very expensive to dispose of. As Chair FICCI Health Services, what are your recommendations on disposal of such waste? Is it possible to re-use and recycle the medical kits to reduce bio medical waste?

On April 18, the Central Pollution Control Board (CPCB), the country’s apex body released a set of guidelines on the regulation of waste disposal – on what to do with COVID-related waste generated by hospitals, laboratories, quarantine centres, containment zones and isolation facilities. Used masks, tissues, head covers, shoe covers, disposable linen gowns, non-plastic and semi plastic coveralls need to be disposed of in a yellow bag meant for incineration at a common biomedical waste treatment facility (CBWTF). So are leftover food, disposable plates, glasses, used masks, tissues and toiletries of COVID-19 patients.

It was also stipulated that those in home isolation, in containment zones, should deposit biomedical waste generated from suspected or recovered COVID-19 patients in yellow bags to authorised waste collectors, engaged by urban local bodies, or at designated centres or hand over these bags to CBWTF operators. As FICCI Chair I would recommend that masks and gloves used by everyone, whether infected or not, should be cut and kept in paper bags for minimum 72 hours before disposing them.

While India has no shortage of repurposed medicines to treat COVID-19 and various companies are part of vaccine trials and manufacturing contracts, the cost will still be prohibitive. Is there any clarity from the government about advance purchase agreements with these companies for vaccines etc for India?

We shall wait for the vaccines to come to the market first. We are certainly hopeful that government shall make appropriate declaration to that effect subsequently.

While the centre claims that India has lowest COVID-19 fatalities and cases per million population, an MIT study projects that India will have 2.87 lakh COVID-19 cases daily by 2021. What are the steps to be taken now so that the healthcare sector, both public and private arms, are prepared for this patient load?

India has one of the lowest death rates in the world, clearly indicating that the information that was predicted at the onset of the pandemic in early April, is not true. India is reasonably prepared if both government and private sector join hands and exchange synergies.

While the Central government officially does not admit to community spread of COVID-19, what are your thoughts? 

India has reported the highest number of daily cases in world since the last 10 days. According to WHO data, from August 4 to 13, the country has reported the highest number of daily cases globally. With the COVID spike increasing daily, community spread is happening in clusters in most parts of the country.

COVID-19Dr Alok RoyFICCIMedica Grouppublic-private partnerships
Comments (0)
Add Comment