Published Sep 01, 2026 | 7:00 AM ⚊ Updated Sep 01, 2026 | 7:00 AM
Parliament has flagged concerns over the financialisation of healthcare.
Synopsis: India’s private hospitals account for most inpatient care, while private-equity firms are rapidly expanding their hospital portfolios. The shift is raising questions over healthcare costs, hospital consolidation and patient care. Parliament has flagged concerns over the financialisation of healthcare, while public-health experts warn that financial metrics must not overshadow staffing, quality and patient safety.
Telangana is emerging as a useful snapshot of a larger transformation in Indian healthcare: hospitalisation costs in the state are among the country’s highest, major hospital chains are reporting strong growth from the region, and global investors are expanding their footprint through acquisitions.
Apollo Hospitals reported 31 percent year-on-year revenue growth in its AP-Telangana cluster in the June 2026 quarter, while private equity firm KKR has agreed to acquire Medicover India’s 24-hospital network for €1.2 billion.
KKR-backed Baby Memorial Hospital has also agreed to acquire a controlling stake in Hyderabad-based Star Hospitals, while Aster DM Healthcare has merged with Quality Care India, bringing the CARE Hospitals into a much larger, Blackstone-backed hospital platform.
The expansion comes at a time when private hospitals already handle the majority of inpatient care in India. The 80th Round of the National Sample Survey’s Household Social Consumption: Health, conducted during January-December 2025, provides the underlying data, while the Parliamentary Standing Committee on Health and Family Welfare has used the findings in its assessment of affordability and accessibility.
The Committee has also raised a broader question: as hospital ownership becomes increasingly concentrated and institutional capital enters the sector, what happens to affordability, competition and patient care?
Also Read: Are you an Indian athlete using Western benchmarks? Here’s why they may not tell the full story
According to the NSS 80th Round data, private hospitals accounted for 60.3 percent of hospitalisation cases, compared with 36.7 percent in government or public hospitals and 3 percent in charitable, trust or NGO-run hospitals. The figures show that private providers are not a marginal part of India’s health system. They are already the main destination for inpatient care.
The dependence is even greater for some serious conditions. Nationally, private hospitals accounted for 71.9 percent of hospitalisations for genito-urinary diseases, 62 percent for kidney failure, 61.6 percent for cardiovascular diseases and 56.6 percent for cancer.
That dependence gives the expansion of large hospital chains a significance beyond corporate deal-making. When a growing share of patients relies on private providers for complex care, changes in hospital ownership, financing and operating models can affect a substantial part of the healthcare system.
The Parliamentary Committee itself points to this dependence, saying there is an “influx to private sector hospitals where exorbitant bill on the health expenditure is the real concern.” It adds that there is “lot of scope for improvement in public health sector”, particularly through preventive and community-based healthcare.
The financial attraction is visible in Telangana, although the available data does not establish that private equity has caused the state’s higher hospitalisation costs.
The NSS-based analysis puts Telangana’s average hospitalisation expenditure at ₹55,863, compared with ₹52,397 in Tamil Nadu, ₹45,245 in Kerala and ₹44,104 in Karnataka. The national average is ₹37,858.
At the same time, large hospital chains are reporting strong growth from the state. Apollo Hospitals reported 31 percent revenue growth in its AP-Telangana cluster in the June 2026 quarter, while KIMS Hospitals reported EBITDA margins of around 30-35 percent for its Telangana cluster, compared with a consolidated margin of 18.9 percent.
Apollo’s wider results also show the scale of the expansion underway across the sector. The company reported a 20.6 percent rise in consolidated revenue from operations for the June quarter and said it planned to add more than 5,800 beds over the next five years. Reuters reported that the growth was driven by higher demand for complex treatments and a richer case mix.
These numbers do not mean that private investment is responsible for the higher cost of care in Telangana. They do, however, show why markets with strong private-sector demand, high-value treatments and room for additional beds are attractive to large hospital platforms and their investors.
Also Read: H1N1 surge raises another concern: Are patients reaching for antibiotics on their own?
KKR’s latest transaction illustrates the scale of the capital now entering hospital care. The investment firm has agreed to acquire Medicover India, which operates 24 hospitals with approximately 4,800 beds across South and West India. KKR said its investment would support talent, infrastructure, technology and clinical capabilities.
The deal also expands KKR’s existing healthcare presence in India. In Hyderabad, KKR-backed Baby Memorial Hospital has agreed to acquire around 60 percent of the parent company of Star Hospitals for ₹1,800 crore. Star operates two multispecialty hospitals in Hyderabad.
Aster’s expansion has followed a different route but points towards the same consolidation trend. Aster DM Healthcare completed its merger with Quality Care India in July 2026, bringing together Aster, CARE Hospitals, Evercare and KIMSHEALTH under Aster DM Quality Care. The combined entity began operations with 39 hospitals across 28 cities and more than 10,600 beds.
The Quality Care platform itself was backed by Blackstone and TPG. When the Aster-QCIL merger was announced, the companies said Blackstone would hold 30.7 percent of the merged entity and described the transaction as creating one of India’s top three hospital chains by revenue and bed capacity.
The result is a healthcare market increasingly organised around large platforms rather than standalone hospitals.
The Parliamentary Standing Committee on Health and Family Welfare explicitly addresses the role of foreign capital in hospital ownership.
“The Committee observes with serious concern the accelerating trend of substantial Foreign Direct Investment (FDI), often exceeding 51%, in the operational management of private hospital chains,” the report says. It argues that this is facilitating the acquisition of “cost-effective, mid-sized hospitals by large corporate entities.”
The Committee’s language becomes sharper when it describes the potential consequence.
It says the trend is “fundamentally transforming healthcare from a public service sector into a purely capitalistic enterprise” and warns that it could contribute to “artificially inflating the cost of medical procedures.”
The Committee therefore recommends that the government “strictly review and rationalize Foreign Direct Investment limits concerning the operational management and acquisition of existing healthcare facilities.” It also calls for measures to protect mid-sized hospitals from what it describes as “predatory corporate buyouts.”
Importantly, the Committee is not rejecting foreign capital altogether. It recommends redirecting foreign investment towards medical-device and pharmaceutical manufacturing, where it believes capital can strengthen domestic capacity without contributing to greater concentration in hospital ownership.
Also Read: Oxygen bars promise clean air and wellness, but doctors say there is little evidence of benefit
The financialisation of healthcare can be seen in the metrics used to assess hospital companies. Average Revenue Per Occupied Bed, or ARPOB, has become a key measure of hospital performance because it indicates the revenue generated from each occupied bed.
Manipal Health Enterprises reported an ARPOB of ₹68,957.84 in fiscal 2026, compared with ₹58,864.75 three years earlier. Its occupancy, however, changed by only about one percentage point over the period.
The company also reported nurse attrition of 19.56 percent in fiscal 2026, compared with 8.8 percent among doctors. Its prospectus says failure to attract and retain healthcare professionals can affect “quality of care, patient satisfaction, and operational efficiency.”
The numbers do not establish that nurse attrition is a consequence of private-equity ownership or cost-cutting. But they illustrate the different kinds of information that exist alongside hospital financial metrics.
For investors, ARPOB, occupancy, revenue growth and EBITDA are readily visible. For patients, comparable information on staffing, infection rates and other clinical-quality indicators is much harder to find.
That is where public-health experts see a potential blind spot.
Dr Ranga Reddy Burri, a public health activist, argues that the financial metrics driving hospital investment need to be examined alongside patient outcomes.
“Recently there is an article about rising HAIs because of private equity players into Indian hospital chains,” Dr Burri said to South First. “In order to decrease the operating expenditure, they have decreased the nurse:patient and housekeeping:patient [ratios].”
He said this creates a conflict between financial performance and the resources needed to deliver care.
“They will acquire beds and focus on ARPOBs, EBITAs and valuations and IPOs, which is not a problem when we look from a business perspective,” he said. “But the major stakeholders or the epicentre of healthcare business, the patients, are at huge loss in terms of decreased quality care and rising costs.”
Dr Burri’s argument is broader than a criticism of any one hospital chain. He said IPO filings are highly detailed when it comes to financial performance.
“These IPO filings are incredibly detailed about financial performance, from ARPOB and EBITDA to occupancy, but relatively silent on clinical quality indicators,” he said.
He pointed specifically to nurse attrition. “Manipal’s filing itself shows nurse attrition at 19.56%, more than double the 8.8% attrition among doctors,” he said.
The available filings do not establish that staffing changes caused hospital-acquired infections, and that distinction is important. But Dr Burri argues that staffing levels should be treated as part of the patient-safety discussion rather than simply as an operating expense.
“Patient care cum housekeeping [staff] play a major role in infection control,” he said. “When their numbers are decreased, which are actually increasing the risk of hospital-acquired infections.”
Also Read: How fake doctors ran Hyderabad clinics for years, some for 26, treating up to 100 patients a day
Dr Burri also questioned how much information about hospital-acquired infections reaches the public.
“Independent audits are never out in public,” he said. “Why would any hospital put it out anywhere in the document? Even our regulators are not so proactive in this case.”
That raises a larger question for a hospital sector increasingly exposed to public markets and institutional investors: should clinical-quality indicators receive the same scrutiny as financial performance?
A hospital prospectus can disclose revenue, EBITDA, occupancy, bed capacity, doctor numbers and attrition. Yet comparable, easily accessible information on hospital-acquired infections, nurse-to-patient ratios, readmissions and patient-safety incidents is not always available in the same format.
The issue is particularly relevant because hospital companies themselves acknowledge the relationship between workforce and care quality. Manipal’s prospectus, for example, says higher attrition can increase recruitment and training costs, reduce productivity and lead to loss of institutional knowledge. It also explicitly links retention of healthcare professionals with quality of care and patient satisfaction.
Dr Burri sees another contradiction in the current healthcare model.
“On one hand, the Government is allowing and, in many ways, facilitating the entry of equity funds with large capital and high return expectations into healthcare,” he said. “On the other, it is attempting to control healthcare prices through reimbursement rates and regulation.”
The problem, he argues, is that the government is not building enough public-sector capacity to provide genuine competition.
“Why is the Government not building sufficient public-sector capacity and strengthening the referral system to create meaningful competition for the private sector?” he asked.
His argument is that stronger public hospitals could influence private-sector pricing without relying only on regulation.
“A strong public healthcare system, with adequate capacity and an effective referral network, would provide genuine competitive pressure and allow market dynamics to moderate prices naturally,” he said.
The Parliamentary Committee makes a similar argument from another direction. It says “efficiently managed, high-quality public healthcare institutions” can act as “definitive market regulators” by providing accessible care and putting competitive pressure on private hospitals.
The Committee therefore recommends autonomous public-sector multispeciality hospitals in every revenue division and says these institutions should “actively regulat[e] regional healthcare pricing through superior public service delivery.”
The consolidation also raises a question about smaller hospitals run by doctors rather than institutional investors.
Dr Burri said these hospitals operate on a different economic model from large corporate chains and could be caught between government reimbursement rates and increasingly capitalised competitors.
“The unintended consequence could be the gradual decimation of doctor-led hospitals,” he said, describing them as “the very segment that has traditionally provided accessible, locally rooted and relatively affordable healthcare.”
The Parliamentary Committee itself recognises that private healthcare is not a single category. It describes the sector as ranging from individual clinics and nursing homes to diagnostic centres and large corporate hospital chains, and recommends financial assistance, technology upgrades and subsidised equipment for smaller providers in rural and semi-urban areas.
Private equity brings capital that can be used to add beds, acquire hospitals, expand technology and build networks. KKR says its Medicover investment will support “talent, technology, infrastructure and clinical capabilities”, while Aster says its merger with Quality Care will create a larger platform to expand specialist care and advanced technology beyond metros.
The question raised by the Parliamentary Committee and public-health experts is what happens when that capital becomes increasingly important in a sector on which most Indians already depend for hospital care.
The NSS data shows that private hospitals handled 60.3 percent of hospitalisation cases in 2025. The same data shows wide differences in hospitalisation costs between public and private facilities, while states such as Telangana record average hospitalisation expenditure well above the national average.
Against that backdrop, private-equity-backed consolidation is not simply a story about who is buying which hospital. It is a story about who will control the capacity through which Indians increasingly receive inpatient care, what financial incentives shape those hospitals, and whether the public system is strong enough to provide an alternative.
As Dr Burri puts it: “How do we create a healthcare market in which public capacity, private competition and appropriate regulation work together to keep healthcare affordable without destroying the diversity of providers?”
