Separate infra needed for Covid-19 patients with other ailments: Fortis CEO

As the number of coronavirus cases continue to grow, India's second largest hospital chain thinks that there should be a differentiated infrastructure for coronavirus patients, who also have other medical ailments. The hospital has chosen not to cut salaries of frontline health workers even as its looks to implement cost saving measures. In a conversation with Sohini Das, Fortis Healthcare managing director and CEO Ashutosh Raghuvanshi mentioned about how investment plans are on hold for this year. Edited excerpts.

What do you think about the current mixed model of Covid hospitals?

There is a scientific basis to keep patients inflicted with Covid-19 in separate units. Typically, hospitals do not have that much of isolation area. As a broad policy, it is good idea. However, some challenges will happen in execution. Suppose a pregnant lady also is Covid-19. Whether she should go to a dedicated Covid-19 hospital that may or may not have facilities for obstetrics.

There have been some sad situations emerging out of that. I think this needs to be considered. The policy too is continuously changing, and no one was prepared for what is to be done. Having differentiated hospitals is a good idea, but there needs to be some hospitals which can treat medical problems of people who are also suffering from Covid-19, and hospitals that would treat medical conditions of people who do not have Covid-19. A differentiated infrastructure can be created and then there can be sub-classifications of obstetrics, dialysis, cancer care.

Is there ambiguity with different state governments taking separate approaches?

Every state is adopting a different strategy and it is based on multiple things - one is the extent of the outbreak, the kind of infrastructure that may be available etc. Every state government is making their own assessment and deciding accordingly. For instance, in Delhi they have designated few private and government hospitals as COVID only hospitals. They have inspected the rest of the hospitals and have asked to keep some areas prepared in case the outbreak increases and they will keep on increasing the Covid-19 hospitals. There havee to be sufficient capacities in both the segments available - COVID and non-COVID. Gurgaon has created some COVID hospitals that are treating relatively stable patients, but the sicker patients are being treated in the private hospitals, which have been designated, but they are not exclusive COVID hospitals.

In Maharashtra they have created COVID specific hospitals and there are certain hospitals which have been asked to treat COVID as well, but not exclusively. Two of our hospitals in Mumbai - the Mulund hospital and SL Raheja are also treating COVID patients, but not exclusively. While our third hospital in Vashi has been designated as a COVID only hospital.

How have protective protocols have pushed up operational costs and also risks?

Whatever protocols and processes we have put in there is still remains a chance of frontline healthcare workers to get infected because there are asymptomatic patients. The best possible protocols will also have certain degree of weakness. People will get infected. We did not have early infections. Now a few staff members (about eight to ten people) have got exposed. This is a real danger for the healthcare workers. Every patient now has to be treated like they may be potentially infected. Sterilisation, PPE, protective gear, all these are essential for both the medical as well as some of the non-medical staff who may be in the frontline of patient care. This definitely increases the cost of delivery. Physical distancing also increases the logistics costs and reduces capacity. In the early phases we have used a tool to determine how many PPE kits we need to stock. At present we are keeping 75,000 PPE kits that we are keeping ready everyday. We would need around 300 sets in a normal hospital everyday. The numbers go up and down depending on how many patients we are serving, but every patient needs around 3 PPEs.

With revenues been hit, any plans of raising working capital loans etc?

Our in-patient occupancy is hovering around 30 per cent and in outpatient department (OPD) there is a fall of about 80 per cent. We have initiated tele-consultations, but these numbers are much lower than what actual OPD attendance would have been. However, in last one week, we have gradually seen the OPD numbers increase in some facilities. They will increase now as certain relaxations are given in transport etc. Our estimate is the first two quarters of this fiscal are likely to be impacted, the first quarter definitely more than the second quarter.
 

Our cash requirement is around Rs 200 crore, part of which gets fulfilled by our internal accruals and cash reserves. We are sufficiently protected on that side. We will have to take lot of measures to keep our costs in sync with the kind of revenues we are expecting in order to minimize our additional cash flow requirements. We have lined up with the some banks and we feel comfortable at the moment.

 

We have not made any cuts in the salaries of our frontline workers. However, senior management staff and senior doctors have voluntary taken some salary cuts to the tune of 10 per cent to 50 per cent.

What kind of investments would be on hold?

We are fortunately in an investment cycle where last year we had made some significant capital investments and lot of that equipment was now getting installed. We have not even got the advantage of that. Right now we have postponed some of equipment that we had planned for this year. We had spent about Rs 200 crore last year and this year we had plans to invest Rs 150 crore or so.

Any updates from IHH post COVID whose investment is stuck in litigation?

We had advantage of knowledge sharing from IHH as the disease struck there earlier (Singapore and Malaysia) and learn about the best possible protocol and also about supply chain management. The other plans are subject to legal issues and that would take some time. There is no immediate need for IHH to invest in Fortis and the legal formalities and case would probably get resolved after the lockdown lifts.