Sri Lanka’s private healthcare sector faces acute shortage of trained medical professionals

30 June 2020 08:46 am - 0     - {{hitsCtrl.values.hits}}

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  • Situation has pushed costs and prices higher, making patients to mostly bear them  
  • Issue demands govt. and private sector to establish colleges to produce specialised practitioners

The acute shortage of doctors, consultants, trained nurses and other medical staff, has pushed Sri Lanka’s private healthcare sector towards intense competition among the handful of players operating in the sector, leading to poaching and thereby negatively affecting their margins.


The situation has become so pronounced to the point of affecting the demand for private hospitals and thereby not being able to fully utilise their capacity levels, said ICRA Lanka, part of Moody’s Investors Service. 


While the situation has been mitigated to a certain degree by the permanent or resident medical practitioners in the private healthcare system, some players run in-house training centres. The situation has pushed costs higher and thereby the prices, which are mostly passed on to the patient.    


“The competition among the private players to attract skilled staff has resulted in significant cost escalations in the private healthcare sector in the last few years,” the rating agency noted in a recent rating report on Nawaloka Hospitals PLC. Nawaloka, among others, has its own nursing school to train nurses, which has helped them to infuse new talent while rationalising staff cost.  

Five key players dominate the Sri Lankan private healthcare space—Asiri Hospital PLC, Lanka Hospitals PLC, Hemas Hospital PLC, Durdans Hospital and Nawaloka Hospitals PLC.
In fact, the aggressive competition has slowed Nawaloka Hospitals’ outpatient healthcare services during the financial year ended March 2020, ICRA observed.


This has led to the rating agency downgrading the company to BBB-, from BBB, with a ‘Negative’ outlook on the deterioration in the liquidity amid weak financial performance during the nine months to December 2019 and the deterioration in the company’s capital structure. 


Lack of talent has been a perennial issue facing many industries in Sri Lanka forcing sub-optimal performance and it was only last week Mirror Business showed how the country’s vocational and technical training sector has continuously failed short of its expectations to provide the skills required to power industries.    


Some hospitals have even resorted to foreign hires, another costly alternative and a practice, which gave unease among local doctors.


In fact, another reason for the acute shortage of specialised consultants is that they opt for the public sector because of better exposure, opportunity for further training and other benefits such as tax-free income, ICRA identified. 


The private healthcare players’ reliance on the government sector consultants to drive their operations has long remained a bottleneck, as these consultants could only practice during their off-duty periods.  


Sri Lanka’s private healthcare sector has been on a rapid uptrend due to the burgeoning middle and upper-middle-income classes, who seek healthcare at relative convenience.


Meanwhile, the long-term demand outlook of private healthcare remains favourable due to the increasing medical insurance penetration, lifestyle-related disorders and physical limitations of the public healthcare system, ICRA Lanka noted. 


As a result, the sector saw some significant investments in building capacity by several players in recent times.


The situation demands the government and private sector to step up establishing colleges and institutes to produce the specialised practitioners, sufficient enough to run hospitals before the talent dearth becomes the leading bottleneck to the industry’s advancement.  

 

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