Private Equity’s Rush Into Kerala: What It Says About The State’s Health Model 

At the beginning of this decade, during a medical conference, a doctor from Kerala was approached with an unusual request. An agent representing a global investment firm wanted to know if any hospital in Thiruvananthapuram was for sale or seeking fresh capital. The doctor thought little of it at first—until the agent kept calling in the months that followed, pressing the point that his firm was ready to invest in or take over hospitals anywhere in the state. It was a persistence that hinted at something bigger. To the doctor, it marked the beginning of a quiet churn in Kerala’s healthcare sector—one that would raise unsettling questions about who owns hospitals, who sets the costs, and ultimately, who controls access to care. 

Years after the doctor was confronted with the question—‘Is there any hospital in Kerala for sale’—the state is witnessing a huge influx of private equity investments by global giants. In the last year, major private equity giants, like KKR (Kohlberg Kravis Roberts) and Blackstone, have been investing or buying major hospitals in the state with utmost urgency. 

In a recent development, KKR-owned multi-speciality hospital chain Baby Memorial Hospital (BMH) acquired a majority stake in Meitra Hospital, both based in the Northern Kerala city of Kozhikode. This is KKR’s third major deal in Kerala. Meitra Hospital, according to reports, was valued at Rs 1,000-1200 crore. KKR acquired a controlling stake in the Baby Memorial Hospital chain in 2024, and reports suggest that it is in discussions to acquire Star Care Hospital in Kozhikode. 

US-based PE firm Blackstone has controlling stakes in CARE hospitals and KIMS Hospitals, a leading chain in Kerala. 

Public health specialist V. Raman Kutty points out that investment naturally flows where there are profits to be made, and healthcare is no exception. He argues that when the government is actively promoting foreign investment in every other sector, keeping healthcare out of the loop is unrealistic. Part of the reason people gravitate toward private hospitals, he says, lies in the aspirational mindset of Kerala’s general public. 

Kerala’s health sector also presents conditions that appeal to private investors. The state is ageing rapidly, and with that comes a higher morbidity rate. Patterns of health-seeking behaviour here are also markedly different from the rest of the country. These factors, Raman Kutty stresses, make preventive healthcare more urgent than ever. 

The challenge for the government, he suggests, is to build people’s confidence in the public health system. That would require not just more investment, but significant changes in the way the health administration is structured. 

Kerala’s healthcare system has consistently excelled, garnering national and international attention. As stated by various health surveys, including the 2018 report, Kerala leads many other states in having high healthcare standards and life expectancy rates, a low maternal mortality rate, and the lowest infant mortality rate in the country. 

According to various studies, a significant proportion of adults in Kerala are living with chronic morbidities, especially illnesses such as hypertension, diabetes and atherosclerosis, which are known to develop chronic complications such as heart failure and kidney diseases. Experiences and studies indicate that Kerala is in the era of an emerging puzzle because of its high morbidity rate with low mortality rate, besides having a significant increase in non-communicable and communicable diseases. 

A senior doctor working with the Kerala Health Services, on condition of anonymity, revealed the basic lacuna prevailing in the health system. He pointed out the severe dearth of super-specialist doctors in the system. According to him, 6,000 doctors are in service, but only a handful of them are specialists. He says Kerala has historically been number one in terms of infant mortality rate and life expectancy. However, Kerala is now one of the states with the highest morbidity rates; it has become a diabetic hub and also tops other Indian states in Out-of-Pocket Expenditure (OPE). All this has made the Kerala global health market a place of attraction for international companies over the last two decades. And according to him, some surveys conducted with the help of the health department over the last decade may also have revealed to international agencies the health behaviours of the people. 

According to experts, the secondary and tertiary care in the public health system in the state require immediate improvement to reduce the morbidity rate. However, they claim that insufficient attention has been paid to it. 

Recently, a whistleblower doctor’s revelation regarding the inadequacies at Thiruvananthapuram Medical College has exposed the systemic issues that plague the state’s healthcare system. Haris Chirammel claimed that many surgeries had to be delayed due to the shortage of equipment. 

In some cases, patients were required to purchase the necessary items themselves. He added that he was tired of repeatedly asking voluntary organisations and companies for help. 

According to health experts, the actual allotment to the medical colleges for the states has not been increased in the last decade. The allotment to five medical colleges a decade ago was around Rs 200 crore, and this amount has not increased, despite the number of medical colleges having increased to 14. A doctor working in a medical college stated that there are instances where a patient is referred to a taluk hospital from a recently upgraded medical college. 

Althaf Ali, professor at the Medical College, Thiruvananthapuram, Kerala, suggests that the morbidity burden could be eased through lifestyle changes—promoting physical activity and encouraging healthier diets with more green, leafy vegetables. But, he notes, the state’s urban design itself works against good health. With little space left to walk or play, nearly 70 per cent of the population is physically inactive. The impact is stark: among those above 20, every second person is now either diabetic or hypertensive or both, a trend that is only expected to escalate in the coming decades. 

Unless preventive care is made a priority, he warns, morbidity will keep rising. This, in turn, will draw more private capital into the health sector, pushing up out-of-pocket spending for ordinary people.” 

Despite the rhetoric around the celebrated Kerala health model, the reality is stark: an ageing population, rising morbidity, and persistent gaps in the public health system. Big capital is already poised to seize the opportunity, and as costs climb, the burden on ordinary people will only grow heavier, pushing their lives into greater precarity.