Who Owns Our Hospitals?

By – Prakash Satyavageeswaran
(Indian Institute of Management Udaipur)

Dr. Neeraj Nagpal, Convenor,Medicos  Legal  Action  Group, talks about the slow death of the neighborhood hospitals due to increasing corporatization in the sector. Standards set by the government, he points out, make it difficult for individual doctors or even small hospitals to comply and operate. This favors the large corporate hospitals.

However, the new trend in the recent months seem to indicate that the Indian corporate hospitals are also being taken over by foreign entities. Dr. Nagpal points to the merger of Radiant Life and Max Healthcare, Fortis  shares  sale  to  IHH  Healthcare  Behrard, and Manipal – Temasek-TPG  Capital  combine  takeover  of  Medanta. In addition, Prof. DVR Seshadri at ISB points to the majority holding of Dubai based Abraaj group in Care Hospitals and the investments of Parkway Pantai in Continental Hospitals.

The high standards set for hospitals is making it increasingly difficult for small standalone hospitals to operate. This can create a vacuum in the much needed affordable care segment in rural areas where such hospitals are shutting down. Mr. Nagarajan D, consultant with expertise in the medical industry, suggests that a rapid rethink is necessary to ensure that there is support and encouragement for small hospitals and large single doctor clinics, especially given the lack of facilities in most parts of rural India.

The new trend of foreign investors picking up controlling stakes in large corporate hospitals is a worrying trend. There is a need to discuss what this means for affordable healthcare in India. Whose interests would be uppermost in the minds of the investors; that of the patients or the shareholders who are looking to maximize returns?