121-001 Aster DM Healthcare: Budgeting for a Crisis Frontline workers and the lowest-paid employees comprised about half of Aster's labor force, but Alisha was open to exploring austerity measures among the remaining 50% of workers. Telehealth While she focused on cutting costs, Alisha also turned her attention to establishing Aster's telehealth segment. In late March 2020, the company received swift regulatory approval to offer telehealth services. The healthcare industry had been slow to embrace virtual consultations, as both doctors and patients tended to prefer in-person interactions. However, following the lockdown orders, Alisha wondered whether telehealth sessions could offset some of the financial consequences from the pandemic. Telehealth consultations were typically priced between 6,500 INR and 8,200 INR. The only costs associated with telehealth were doctors' fees for service, which were the same as fees for in- person visits. While the pandemic had the potential to catalyze the growth of the telehealth segment, Alisha was uncertain whether doctors and patients would adopt the service. Given the medical community's previous resistance to telehealth, she considered excluding it from the revised budget projections altogether. If telehealth did gain traction, she doubted that the company would serve more than 500 to 1,500 patients per month. Communicating with Shareholders As she managed the immediate financial fallout of Covid-19, Alisha also focused on communicating the impact to Aster's shareholders. The company's results for FY 2020 were scheduled to release in June, and in the meantime they planned to give shareholders frequent disclosures about the financial impact of the pandemic. Aster also remained in close dialogue with its board. The board's primary concern was for Aster to continue its clinical care. They also encouraged the company to preserve as much liquidity as possible, as raising additional capital during the pandemic would likely prove challenging. Given the unknowns surrounding both the virus and its financial impact, the board stressed that Alisha and her team should take the necessary steps to ensure Aster's survival in a worst-case scenario. Other external conditions complicated Aster's relationship with potential lenders. Global oil prices declined following the onset of the pandemic, adding to the economic pressure facing the GCC (which relied heavily on oil exports) and increasing uncertainty among investors. Aster faced added scrutiny from the financial community following a recent incident with New Medical Center (NMC), a peer institution that operated a network of hospitals in the Middle East. In March 2020, NMC revealed that it had roughly $6.6 billion in debt; it previously had disclosed only $2.1 billion.2 Following the revelations, NMC was delisted from the London Stock Exchange and ultimately filed for bankruptcy. While Aster had good relationships with its lenders, many were wary of issuing additional loans given the uncertain economic atmosphere. 2 Anna Isaac, "NMC Health Discloses $2.7 Billion More in Debt," The Wall Street Journal, March 10, 2020, https://on.wsj.com/39BIsE5, accessed July 2020; Frank Kane, "NMC debts rise to $6.6bn as fraud probe widens," Arab News, March 25, 2020, https://bit.ly/3iiK4a4, accessed January 2021. 3 Becky Yerak, "Mideast-Based NMC Health Files for Bankruptcy in the U.S.," The Wall Street Journal, May 28, 2020, https://on.wsj.com/2XLhHHP, accessed July 2020