Impact of Corona on the healthcare sector


The impact of the coronavirus it triggered is clearly visible in financial markets. But there is still no clarity on the deeper impact that it is having across businesses and industrial sectors. Based on assessments made by different analysts and industry body here is an impact analysis in the healthcare sector.

The healthcare sector is at the epicentre of this unprecedented global pandemic challenge, and the private sector has risen to the occasion, by offering to the government all the support it needs, be it testing support, preparing isolation beds for the treatment of Covid-19 positive patients or deploying equipment and staff in identified nodal hospitals.

  1. Will private healthcare providers benefit?
    • While the private healthcare sector is fully prepared for every eventuality, it is also a reality that, unlike other sectors, the sector is facing a twin-burden: (a) Investing additional manpower, equipment, consumables and other resources to ensure 100 per cent preparedness for safety in the hospital(s) and eventual treatment of patients, if needed. (b) Experiencing a sharp drop in OP footfalls, elective surgeries and international patients.
    • The industry has been witnessing the loss of business and this trend is expected to continue for the foreseeable future (at least 3-6 months), and the fact that the sector’s costs are predominantly (around 80 per cent) fixed, it is expected that there will be losses and severe impact on cash flows.
    • It is likely that whenever the government announces any fiscal stimulus, this industry will be looked at favourably. The industry is also likely to benefit from increasing awareness about healthcare and the more government focus that this endemic is likely to result in.
  2. What is the impact on India’s medical devices industry?
    • The medical devices industry has also taken a hit. The country imports consumables, disposables and capital equipment including orthopaedic implants, gloves, syringes, bandages, computed tomography and magnetic resonance imaging devices from China. Due to the current crisis in China, the medical device manufacturers across India are finding it difficult to source important raw materials and electronic components from Chinese factories.
    • Even though some of the factories in China have restored operation, shortage of some critical electronic parts and raw material still exists. This is adversely affecting the margins and profitability of Indian companies importing medical devices and small components to manufacture finished products. This can also put upward pressure on prices of medical devices in the short term.