KOCHI: Is healthcare in Kerala set to become more expensive? Public-health experts say the signs are already visible as global private-equity (PE) giants expand their footprint in the sector.
Kerala has long been a paradox: A public-health success story with high life expectancy, but also with one of the highest levels of morbidity in the country. And, it is this state of affairs that makes it uniquely attractive for investors.
“Our status as the country’s ‘number one’ state in terms of morbidity and medical expenditure attracts these global corporates. Patients who need treatment and have funds to cover their expenses are key factors that draw investors,” said Dr Althaf Ali, epidemiologist and professor at Thiruvananthapuram Government Medical College Hospital.
The recent flow of investment has been significant. On Monday, reports said global private equity firm KKR-owned Baby Memorial Hospital (BMH) acquired a significant majority stake in Kozhikode-based Meitra Hospital, becoming the latest in the slew of investments made by PE majors in the state’s healthcare sector.
In July 2024, KKR invested nearly $300 million (Rs 2,500 crore) to secure a 70% controlling stake in Baby Memorial Hospital. In 2023, Blackstone-backed Quality Care India put in $400 million to take 80% of KIMS Health. Late last year, Aster DM Healthcare’s India operations merged with Blackstone-backed Quality Care, creating one of the country’s largest hospital chains.
Experts warn that the long-term effect will be felt in patients’ pockets. “When global firms invest in the healthcare sector, it will lead to increased treatment costs and high out-of-pocket expenditure,” said Dr B Ekbal, neurosurgeon, public health activist and former Kerala University vice-chancellor.
“One reason is that we are giving priority to treatment over prevention.” The latest government survey supports that concern: The average out-of-pocket expenditure for hospitalised treatment per household in Kerala is Rs 8,655 in rural areas and Rs 10,341 in urban areas — more than double the national average.
CM’s warning
Chief Minister Pinarayi Vijayan, too, has sounded the alarm. Inaugurating the superspeciality block of Kannur District Hospital last month, he alleged that multinational companies were targeting Kerala’s private hospitals with one goal in mind: Maximising profits.
“In such hospitals, unnecessary medical tests are conducted, not for the benefit of the patient, but to generate more revenue. Targets and quotas are set for these, making healthcare a profit-driven business rather than a public service,” he said.
He further warned that “vested interests” were working to weaken the public health sector, which is seen as a barrier to corporate expansion. “Some people, knowingly, are spreading misinformation influenced by corporate strategies. Their motives must be exposed,” Pinarayi said.
Gaps in public facilities
The concern is compounded by the state of government hospitals. “Our government hospitals don’t offer specialty care and advanced treatment facilities. We cannot blame or stop corporate hospitals. What we can do is launch insurance schemes so that people can access these facilities. The common man should get the benefits,” said Prof K V Thomas, the state’s special officer in Delhi. “An AIIMS would introduce competition and lower treatment costs,” he added.
The way forward
The Kerala Clinical Establishments Act requires hospitals to display fee charts and package rates, but implementation is patchy. “There should be standardisation of costs, and a treatment protocol should be established. Also, more focus should be accorded to preventing non-communicable diseases,” said Dr Ekbal. For now, however, Kerala’s celebrated healthcare model finds itself at a crossroads — pulled between global capital seeking returns and a public system struggling to keep pace.