How has the covid-19 pandemic impacted the diagnostics sector in India?
Like other businesses, the diagnostics sector is also facing severe headwinds and patient volumes have come down significantly. As the lockdown continues, people seek medical care only for emergency or acute conditions and, consequently, demand for diagnostic tests has also reduced.
An assessment by the Federation of Indian Chambers of Commerce and Industry (Ficci) and Ernst and Young (EY) estimated that the lockdown is likely to result in operating losses for this quarter of ₹13,400-22,000 crore for hospitals and ₹600-2,200 crore for diagnostic labs.
Short-term interest-free or concessional interest rate loans to address this liquidity gap should be facilitated by the government.
However, laboratories need to sustain operations at full scale to support testing for covid-19, which is increasing on a daily basis with the rise in the number of positive cases in the country crossing 70,000 cases.
What are the problems faced by the diagnostics industry amid the high demand for covid-19 testing?
More than 120 private National Accreditation Board for Testing and Calibration Laboratories (NABL)-accredited labs, approved by the Indian Council of Medical Research (ICMR), have partnered with the government for testing across the country.
There is huge scope for improving administrative processes, so that they are not detrimental to achieving operational efficiencies as India prepares for higher testing capacities. Various registration and reporting processes need to be streamlined with considerations of not adding additional workload on the labs. There is an increasing concern among labs on compliance with various laws and Acts in force, and their different interpretation, which is not a conducive environment for true partnerships.
It has been a race against time, but we were able to effectively respond to the initial challenges like limited availability of test kits and logistics of sample transportation.
Globally, countries are relying on effective testing, surveillance and extensive contact tracing for early diagnosis to combat covid-19. India has to do the same.
How can testing help in containing covid-19 cases in India?
A significant number of asymptomatic individuals have tested positive for covid-19; therefore, ICMR must expand the testing strategy to include all individuals with influenza-like illnesses (ILIs), instead of testing them only in hotspots, clusters and large migration gatherings, and evacuees’ centres. The revised strategy must also include testing all patients to be admitted to a hospital to reduce the risk to themselves and to reduce the risk of cross-infection for other admitted non-covid patients.
Also, as businesses prepare to resume operations, a strategy for pool testing workers before rejoining work will be crucial to prevent further contagion. The role of a healthy health industry becomes even more important in the times of a pandemic.
What are your expectations from the government?
The health industry is significantly strained due to revenue losses in this quarter. In the true spirit of a public-private partnership (PPP), the government should release timely payments (usually within a week) as per the agreements signed with private laboratories and hospitals.
Rationalization of goods and services tax (GST) for healthcare services at 0% or 5%, instead of the current exemption from GST, is a long-standing request of the health sector, which should be considered now. Due to the exemption, hospitals and labs cannot claim input tax credit, while the cost of several input products and services has increased in the GST regime.
In addition to a large stimulus package for India Inc. to offset the impact of the lockdown on businesses, the government needs to develop mechanisms for adjusting TDS (tax deducted at source) and advance tax dues against pending refunds of corporates and defer statutory liabilities such as TDS, PF, ESI, GST for a period of three-six months without interest and penalty.
It is also time that we take a re-look at India’s public health spending, which is among the lowest in the world.
The National Health Policy envisaged a public health spend of 2.5% of GDP by 2025, but given the unprecedented situation we are facing, investments in healthcare should be ramped up immediately.