COVID will lead to growth with rationalisation

COVID has indeed unmasked and unearthed the redundancies. Organisations are expected to be lean, agile, and focussed on productivity for profits, points out Prof Rajendra Pratap Gupta is a public policy expert and author of the book ‘Tough Choices & Hard Decisions – Rebuilding India’ 

Every crisis is an opportunity, and the bigger the crisis, the better the opportunity to transform. While COVID has brought he world to a grinding halt, it has also questioned the science, strategy, and systems. As we pass through COVID, we are not sure if we have reached a peak, or is it going to last for long or ending in a few weeks. A section of scientists and experts earlier claimed that the virus could not survive at high temperatures. And we have seen that cases have reached a new high and this is, despite temperatures rising. So, basically, everyone is clueless. Quite possible that we may see touching a new high of 5000 or 10000 cases a day or maybe, the other positive extreme, the virus weakens and withers away. We will have to wait and see, as the virus only knows which route it will take. But despite all this, COVID has bared the reality of the world’s unpreparedness for such catastrophes. Let us look at what it means for India’s healthcare systems. 

During the crisis of 2008, we witnessed rationalisation in terms of ‘expenses,’ and the industries across sectors have grown Y-O-Y in double digits. Now, with COVID, we will see rationalisation in terms of ‘expenses’, ‘experience,’ and ’employees’. So, rationalisation and growth will happen simultaneously in the post COVID era. Also, post the 2008 crisis, the banking and finance sector transformed, post-COVID, healthcare will get transformed. 

Once the lockdown is lifted, business establishments will operate with 50 – 33 per cent staff and some staff will work from home, and some will be ‘rested’ at home (fired). So, the focus will be on productivity and expenses. COVID has indeed unmasked and unearthed the redundancies. Organisations are expected to be lean, agile, and focussed on productivity for profits. 

The New normal

Healthcare was considered a recession-proof industry, but the truth is somewhat different post-COVID. The new normal for healthcare will lead to a paradigm shift in the following :

Industry dynamics

 The new normal will lead to every corporate trying to rationalise cost structures and consider collaborative efficiencies and profit maximisation. So, the outcome will be growth and rationalisation – more mergers and acquisitions in healthcare. 

Practical behaviour of healthcare

In healthcare, the customer is the doctor and the patient is a consumer. This makes the healthcare industry unique, and the customer (doctor) decides what is to be consumed. In the next few months, we are not going to see the old paradigm ‘clinician-patient behaviour’ (consultations). Already, the hospitals’ footfalls are down by 80 per cent, and both the patient and doctors will try to play safe. This means increasing the adoption of digital technology in practice, and which is a good sign. Digital adoption will be driven by patients’ needs and doctors’ interests to safeguard each other. In fact, earlier, healthcare was about the ‘doctor’s personal touch,’ which was a big hindrance to the adoption of digital health, and now, it is the fear of ‘doctor’s personal touch’ which will lead to using digital tools. It is the single biggest behavioural change in healthcare delivery, and for good.  

In the recent study, I lead in 102 countries on people’s comfort with using technology; more than 82 per cent expressed are ready to use technology for their healthcare needs. Whereas, before COVID, this was less than 10 per cent.

In another study with healthcare providers, using technology for clinical practice has been akin to Hobson’s choice, and most of the doctors interacted with patients through WhatsApp, SMS, telephone, and video calling during COVID. WhatsApp appeared to be a preferred medium for medical consultations and contributed to 78 per cent of medical consults. 

Customer engagement will be paramount

For the healthcare industry, the key decision-maker is the clinician. Meeting the clinician for a sales visit or as a medical representative will never be the same again; Which means that digital engagement with the doctors will shift to e-Detailing, which will be the new norm. eDetailing will lead to more focused and targeted engagement using digital tools and rationalisation of field force from the healthcare and pharmaceutical company’s perspectives. 

Supply chains disruption

Supply chains will be disrupted at two levels. At international levels, we will see countries becoming self-sufficient for critical supplies; like India moving API production base back some and the same will be the approach of major countries across the world. So, Indian companies will have an opportunity to set up manufacturing plants outside. 

At the domestic level, the supply chain disruptions would include digitisation of company – supplier – chemist interface. Already, four companies are doing it in India, and this will gain traction. This will lead to a rationalisation of supply chains with automated re-ordering, fulfilment, invoicing, and payments with ‘Just in time fulfilment.’ The retailer quantification and order placing and fulfilment will become live, and lead to lesser stockouts or oversupply, which will lead to rationalising the supply chain costs and improving efficiency. Intermediaries ( sub-stockists) will disappear over time, and so will be the substandard and fake medicines. 

Public sector interventions

Public Sector interventions in the new normal and policies have been faster than technology, and India’s government also moved swiftly and released the telemedicine practice guidelines for medical practitioners. The same has been done for AYUSH separately. Digital adoption has been fast-tracked. Also, recently, NABH started work on accreditation guidelines for digital health. With digital services providers being accredited, it will ensure patients’ safety and enhance the quality of care. 

At the current rate of COVID infections, our hospital infrastructure has been put under stress, imagine, if the infections were in the range of what happened in New York or Italy?

It is time to increase the investments in GDP; Ayushman Bharat will not be enough without adequate infrastructure. We need to double our investments in healthcare and that too, in public facilities. Depending on the private sector for healthcare will be the biggest folly of the government. It calls for evidence-based policymaking and learning from the neighbourhood – Sri Lanka’s healthcare model. We can hope for a shift in the government’s approach. 

The crisis of 2008 led to significant reforms in the banking and finance sector; the crisis of 2020 will lead to considerable improvement in the healthcare sector. 

In my recently released book ‘Tough Choices & Hard Decisions,’ I ended with a message “Those organisations which don’t relook, reposition and transform to the new normal will cease to remain in business”. For healthcare, digitisation is a Hobson’s choice and the new norm to stay in business. 

Twitter handle: @rajendragupta