KOCHI: Kerala’s healthcare sector is witnessing a sharp and unsettling shift, with as many as 1,306 OP clinics and 444 small hospitals shutting down over the past five years, even as large corporate hospitals expand aggressively across the state.
The closures have come despite the total number of private hospitals rising from 3,677 in 2021 to 5,402 in 2026, according to data from the Indian Medical Association (IMA). The trend, unfolding alongside the entry of private equity firms and consolidation by corporate hospital chains, is raising concerns about rising treatment costs and shrinking access to affordable neighbourhood care.
Experts warn that the disappearance of small hospitals is forcing patients to rely on expensive tertiary care hospitals. “These small hospitals are spread across Kerala, especially in rural areas, and provide treatment to the common people at a low cost. It is essential to retain them. Run by doctors, these clinics have better treatment facilities,” said IMA state president Dr M N Menon. He added that seeking treatment at tertiary-level corporate hospitals would lead to unnecessary hospitalisations, causing financial struggles for middle-class families.
The pace of closures has accelerated dramatically. Between 2016 and 2021, only 148 clinics and 262 small hospitals shut down, far fewer than in the past five years.
Health economist Dr D Narayana said the trend reflects bigger structural changes in healthcare delivery and society. “We cannot claim the rules and guidelines alone have caused the closure of clinics and small hospitals. People now prefer to consult specialist doctors. Also, with migration, the population in rural areas and small towns has decreased. Small hospitals used to benefit largely from delivery cases and the culture of family doctors. Now, even young doctors are not interested in running a small hospital for several reasons,” he said.
Rising cases of violence against healthcare workers are also discouraging young doctors from opening independent clinics.
‘Need to balance between safety and survival of small hospitals’
“Considering the healthcare crisis the state is facing, the IMA has been demanding that these institutions be exempted from the registration of clinical establishments as mentioned in the Act,” said Dr Menon.
Public health expert Dr V Ramankutty stressed the need to strike a balance between safety and survival of small hospitals. “We need small hospitals to exist. It is not financially viable for the middle class to seek treatment at corporate hospitals. Through discussions and negotiations, the issue can be resolved. Most of these clinics may not be able to afford the new technology and facilities outlined in the guideline. There should be revisions in the Clinical Establishment Act in such a way that it ensures patient safety and allows the small hospitals to operate,” he said.
Dr Narayana said the state government should strengthen the public health system and improve the facilities at primary and secondary health centres to tackle the issue.
Kerala has also been witnessing major mergers and acquisitions in the healthcare sector. In 2023, Quality Care, backed by private equity fund Blackstone, acquired KIMSHealth Management.
Last year, Caritas Hospital, Kottayam, acquired Matha Hospital, while Kozhikode’s Baby Memorial Hospital explored acquiring Chazhikattu Multi Super-Speciality Hospital in Thodupuzha — signalling rapid consolidation in the state’s healthcare landscape.
Experts say the trend reflects a clear shift from doctor-run neighbourhood hospitals to corporate-driven healthcare, one that could reshape both access and affordability in the years ahead.