Private equity ownership tilted healthcare towards shareholder returns

The rapid influx of foreign private equity into India’s healthcare sector has transformed ownership patterns across hospitals, cancer care networks, fertility clinics and medical device companies, prompting concerns among public health experts that financial returns are increasingly taking precedence over patient care.

A businessline analysis showed that global investors now hold significant stakes across some of India’s largest healthcare providers. Several have moved beyond minority financial investments to controlling ownership.

The trend extends far beyond hospitals. Private equity capital has also flowed into fertility chains such as Indira IVF, Nova IVF and Oasis Fertility, cancer care providers, medical device manufacturers and healthcare technology companies.

The growing presence of financial investors across the healthcare ecosystem reflects what Dr Indranil, Professor at the School of Government and Public Policy at OP Jindal Global University, describes as the increasing “corporatisation and financialisation” of healthcare.

According to Indranil, the key distinction between community-based healthcare providers and corporate hospital chains lies in the role of finance. While independent practitioners and smaller nursing homes are largely driven by medical considerations and local community relationships, large corporate hospitals increasingly operate under pressure to generate returns for investors.

“The defining feature of these corporate hospitals is that they depend on investments from the financial sector. Investors expect relatively quick financial returns, and that changes institutional priorities.”

He argued that once revenue growth becomes a central objective, hospitals face incentives to maximise billable procedures and high-value interventions. This can potentially influence treatment choices, reduce doctors’ professional autonomy and increase healthcare costs for patients.

His recent study highlighted another emerging concern: the growing share of corporate hospitals owned by investors based outside India. According to the study, the increasing influence of global financial capital makes regulatory oversight more difficult and places shareholder interests at the centre of decision-making.

“Governance of finance imposes the dominance of shareholders’ concerns, and hence interests with excessive focus on maximising shareholders’ returns, and priorities of patients are likely to be compromised,” it said.

Dr Prachinkumar Ghodajkar, an Assistant Professor at the Centre of Social Medicine and Community Health at JNU, said global experience suggests that healthcare should remain the state’s responsibility because it is a public good. “If you make it something that is sold, purchased and bought by people, then it would have implications not just for the poor but for everyone, and this is what is happening in the US,” he said.

Referring to the US healthcare system, Ghodajkar said much of it is run by the corporate sector through insurance. He said one of the leading causes of death in the country is iatrogenesis — deaths resulting from medical interventions. “If you push for this kind of health system, where corporatisation and private equity funds dominate the private sector, it will push providers towards greater profit generation. That would lead to more unnecessary medical care and more deaths,” he added.

Professor Mathew George of the Central University of Kerala said patients were already experiencing the catastrophic financial consequences of these structural changes. As hospitals expanded and became more investment-driven, treatment costs had risen sharply, often outpacing insurance coverage.

“A ₹5-lakh insurance cover, which was considered adequate a few years ago, is now often exhausted in a single hospitalisation,” he said.