Revenues from COVID-19 vaccinations had shot up to as much as 12 percent of sales in Q1 for hospital companies but have now reduced with some hospitals having to even cancel vaccination orders.
While discussing this with CNBC-TV18, Viren Shetty, ED and Group COO of Narayana Health said, “Vaccination was never a business line for hospitals like ours.”
"We did what we had to do to take care of the needs of society. We ordered as many vaccines as required and we took care of it," he said.
"We are tying up with NGOs, partnered with huge corporates to take vaccines out to the masses. We are going to the rural areas and vaccinating people at their homes," he added.
When asked if the non-COVID business is back to the pre-pandemic level, Shetty said, "We are absolutely back to the levels that we had seen pre-COVID. Operation theaters are full, ICUs are full, we have a large number of patients in the wards, it is very difficult to get a bed now, which is a good thing in a sense the normal business is back."
"We barely have any occupancies in the COVID wards, there are one-two patients that do come, generally senior people or people with co-morbid conditions but not much," he added.
There was an expectation that there would be a change in the business models for hospitals that there would be a shift towards the digital space for hospitals.
In terms of a structural shift towards the digital space for hospitals which was observed during COVID-19 pandemic like digital consulting, Shetty said, “It has come down but that is only because physical OPDs have improved and certain doctors don't have enough time to dedicate towards online patients. It doesn’t mean that there aren’t patients lining up, they absolutely are. So, we would hire doctors whose only jobs are to see patients online. It is not the desperate situation where people couldn’t leave their homes, couldn’t drive to the hospital, or were terrified of coming and visiting the doctor. That drove that initial spurt of online consultation. So, the behaviour is still there, the way we implement it will have to change.”
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On Sputnik-V, he said, “Sputnik was one of the last drugs to get approved and to get into the market. There wasn’t a tremendous amount of enthusiasm from all corners, most people were happy with Covishield and Covaxin. So, we didn't order as many to start with and it has two very interesting challenges - it has to be stored at a much colder temperature and the other problem was dose one and dose two are two different vaccines.”
Aditya Khemka, Fund Manager at InCred AMC believes that the hospitals business is a very secular growth story and the business is highly profitable.
“We remain extremely constructive on hospitals as a space. We believe the Indian healthcare spend will grow at 15-18 percent over the next decade and hospitals being the largely privatized area will significantly benefit from this secular growth over the next decade,” he said.
For the entire discussion, watch the accompanying video.