There are 723 government laboratories that are approved for Covid-19 testing and those who are unable to afford testing are well-supported by the government facilities. By capping the prices at a very low level, private labs who have been at the forefront in this pandemic are forced to incur losses, making it unviable for all labs across the country. This not only affects the capacity of Covid testing but also has a negative influence on non-Coivd tests because of the losses incurred.
What is the current margin in these tests?
Only large private lab chains have high throughput in terms of conducting the RT PCR tests. However, we also need to factor in investments in infrastructure right from test kits to bio-safety cabinets and RT PCR machines needed for testing. Skilled manpower for testing considering the manual nature of the test, skilled and trained phlebotomists for sample collection, a few hundred logistics associates for sample transfer, and resource cost for increased compliance and documentation are additional costs.
Despite the tests being unviable, a few large private chains like Metropolis are continuing to test for Covid-19 to support the government in its fight. We are stretching our resources to ensure that good quality testing is undertaken in addition to ensuring that patients and doctors get reports at the shortest possible turnaround time.
India is now testing 3 lakh people per day. How much of this is from the private sector and why hasn't private testing picked up?
Unlike other developing countries and other emerging markets, we have always seen that in India, the government is keen to provide healthcare services rather than facilitating private players or approach it in a collaborative manner. Over the years, this has led to an environment of trust deficit between public and private players and is now inhibiting the efforts towards combating the pandemic.
In the current pandemic too, we have seen that the government is intent on providing services independently rather than collaborate with the private players. We have also witnessed that the rules are different for public labs as compared to the private labs. Because of the highly manual nature of the tests and increased ancillary costs for labs in terms of compliance and documentation, a bulk of the approved private players are conducting fewer than 100 tests per day simply because they do not have the resources or capacity to scale-up.
What is the loss of business due to Covid-19?
The healthcare industry has suffered globally, and business was down 90% in the last two weeks of March and all of April. In May, business recovered up to 50% and June has been slightly better. We expect quarter 2 to be better than Quarter 1. The public is now more aware than ever about the quality of reports, safety, and hygiene, etc. When normalcy returns over the next 2-3 quarters, the industry will also see greater consolidation.
Apart from RT PCR, any other tests on Covid19 being planned as India open up? What is the government's suggestion?
The ICMR is yet to approve antigen and antibody tests. As of now, there is no clarity on how these tests will be implemented. We urge the government to allow antibody testing as this will enable companies
to re-open at a larger scale which will help boost the economy. Even with lockdown easing in different parts of the country, many offices and businesses are still operating at a smaller capacity due to fear and uncertainty as there is no knowledge of infection levels. Large scale antibody testing may help in this scenario.
Would you need working capital loans or you can manage from internal accruals?
Metropolis is a strong institution with a healthy balance sheet and good cash reserves. Even amidst challenging circumstances, there have been no lay-offs or salary cuts and we will continue to support our people and provide services to patients. We do not foresee the need for working capital loans at the moment.
What is your expectation from government and agencies like ICMR etc ?
Our only humble request from the government is to enable labs to provide their best capacity by giving us forecast numbers and look at private healthcare providers as equal partners in this fight. Clamping down labs and hospitals with notices is a ''lose-lose'' situation for the government, healthcare institutions as well as the public.
While labs are being approved by ICMR, governing the function of the labs has been left to the states and this has been a big hurdle as guidelines keep changing. We have witnessed infections going from 3 Lakh to 4 Lakh in seven days’ time and the need for extensive testing is greater than ever. With ICMR governing all private and public labs with the same guidelines, it is possible to scale-up testing over the next few weeks which could greatly help to flatten the curve.
What is your plan for overall business revival?
At Metropolis, we have placed quality and customer service at the core of our functioning over the past 40 years. Going forward, our focus will continue to be on providing the highest quality services keeping safety and hygiene as our top priority. The trust that our patients and doctors have placed in us will help us grow as we move forward.