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Startups uncertain on future vaccination drives after change in pricing policy

Several delivery and e-commerce startups that undertook mass vaccination drives for their employees or delivery executives in partnership with private hospitals are unclear on how the latest cap on service charge for vaccination will impact their future camps.

Earlier this week, the government announced that private hospitals can levy a maximum of 150 as a service charge over the fixed price of the jabs. According to industry executives, this could impact the ability of private hospitals to allocate their resources liberally for these camps. Over the last one month, several startups, besides the ecommerce ones, have organised vaccination camps at their offices for their staff.

Sources told ET that these firms are now expecting some degree of slowdown in arranging vaccination camps following the recent changes in the policy. They are already in touch with private hospitals over the issue of the new price cap for jabs. “Supply is ultimately with them (hospitals). If they are restrained, it is bound to have an impact. We are still assessing how to get the second doses on time with frequent changes in vaccine policy,” a senior industry executive said.

“There was a financial incentive to earmark a significant portion of the vaccine supply for such vaccination drives with corporates and housing societies. Now that the financial incentives are gone, there is no reason for hospitals to step out of their premises,” said a senior executive at a unicorn, where most employees have got their first jab.

This was echoed by another large startup in Bengaluru. “There were 5-6 camps over the last one month but we haven’t heard of new ones since the change in policy. It will slow down from what it looks like,” this person said.

Most industry executives that ET spoke with said they are in consultation with their hospital partners. Typically, one company will partner with multiple hospitals for both Covishield and Covaxin. “We asked our partners and they themselves are not sure what it means yet,” one of the people cited above said.

Hospitals typically allocate 4-6 people even for a small-scale vaccination camp in private offices in Bengaluru. This would be higher for ecommerce companies like Amazon India and Flipkart. Then, there are costs like ambulance, transport as well as expenses relating to doctors being on duty at these camps.

Companies were organizing these camps on their premises as they didn’t mind paying a mutually-agreed premium to hospitals. Typically, a Memorandum of Understanding (MoU) is signed between the company and hospitals for these camps. Existing MoUs for vaccination camps for June with the private hospitals will continue as planned. However, several startups told ET that the new policy disincentives private hospitals to engage with companies once the cap kicks in.

ET
reported on June 9, quoting Fortis Hospital and others, that hospitals were of the view that the cap would disincentivise them from setting up camps to vaccinate a large number of people. “Unfortunately, the cap of service charge at Rs 150 will not cover the additional costs incurred for such offsite vaccination camps which involve substantial costs like ambulance, transport, extra staff and doctor, plus TDS involved in many cases,” Fortis Hospital had said.

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