Ideas and Insights

Implications of Covid-19 on Cost of Healthcare

By Manivannan S - Healthcare SME

Covid-19 has changed and challenged the way hospitals provide services to patients. These changes have an impact on cost of services to both Covid-19 and regular patients during the pandemic and would have longer-term implications even after the Covid-19 pandemic is brought under control.

During this period of lock down and recovery, hospitals and other healthcare centres are faced with falling revenues, additional costs for Covid-19 treatment protocol, retaining a trained and motivated team and other regular fixed overheads which have to be paid regardless of falling revenues.

Post Covid also, healthcare organisations (HCO) are looking at a new normal. There will be additional costs of clinical protocols till technology for immediate diagnosis of virus and a vaccine are discovered & stabilised. These additional costs would be applicable to all patients. Thus, HCOs are faced with pressure on reimbursements and the longer time taken to reach optimum capacity.

In this scenario, it becomes imperative for the hospitals to take steps to:

  • Understand their present cost structure and capacity utilisation
  • Identify weak and sweet spots
  • Plan how to control costs during the run-up to achieving the new normal
  • Ensure every unit and cost per unit of resource gives maximum benefits
  • Use technology to facilitate a paradigm shift in business model
  • Finally protect their market-share and margin

In the article, we will take a quick look at the existing scenario and understand the cost implications, a strategy to mitigate the losses and the way forward.



Disclaimer:
This article/ infographic has been compiled based on freely available information from secondary sources. While PKC Advisory has used sources believed to be reliable, the same have not been independently verified for fairness, accuracy, completeness or correctness. Accordingly, no representation or warranty, express or implied, is made and thus this article / infographic should not to be relied upon or used in substitution of independent due diligence and judgment.