Recently, I read an interesting article on LinkedIn, “Every patient you treat is making foreign shareholders richer while you struggle to pay your home loan,” by Dr. Dr Somesh Vanchilingam. 

India made the quiet but seismic policy move of allowing 100% Foreign Direct Investment (FDI) in the healthcare industry via the automatic route, easing limits on overseas ownership in 2015-16. This move, aimed at luring worldwide capital as well as upgrading healthcare infrastructure, has since revolutionized the Indian hospital scenario. Previously homegrown businesses are owned or controlled by overseas private equity titans as well as sovereign wealth funds.

Key examples include:

Manipal Hospitals – Backed by Temasek & TPG Capital.

Max Healthcare – Majority ownership by KKR, currently Radiant Life.

Fortis Healthcare – owned by Malaysian IHH Healthcare.

Aster DM, CARE, Medica, etc. as part of global investment portfolios.

Sahyadri Hospitals – it has been recently purchased by Manipal from OTPP of Canada in ₹6,400 crore deal.

These hospitals are no longer merely “Indian hospitals” — they’re financial assets in global spreadsheets.

Although the foreign investment has definitely infused new technology, capital, and managerial skill, it has in return produced red flags of increased expenditure for healthcare, erosion of ethics, inequitable access, data suzerainty, as well as the psyche of Indian medicine itself.

The Pros: What has 100% FDI brought about?

1. Capital Influx & Infrastructure Development

Foreign investment has facilitated the growth of hospital chains, the improvement of infrastructure, and the purchase of sophisticated medical equipment. From ICU beds to robot-assisted surgery, most centers now match global quality — at least in Indian cities.

Temasek-backed Manipal Health has become one of the biggest healthcare chains in India, expanding geographic penetration as well as capabilities in super-specialty care.

2. Global Best Practices and Accreditation

Private hospital chains led by investors often prioritize foreign accreditation (e.g., NABH, JCI), evidence-based care, electronic health records (EHR), and operational efficiency. They all encourage patient safety, clinical excellence, and assurance of care delivery.

3. Employment and Skill

The establishment of investor-based healthcare centers has given jobs to thousands of physicians, nurses, technocrats, and administrators. Fellowship, training programs, and global linkages — continual medical education is promoted by all hospitals.

4. Impetus to Health-Tech and Supporting Industries

FDI has helped speed investment in diagnostics, telemedicine, insurance integration, as well as health technologies using AI. Such technologies support speedier diagnosis, delivery of care at distance, as well as digitized patient records.

The Cons: At What Cost?

1. Rising Expenses and Revenue-Driven Care

The shift of healthcare from mission-based to margin-based has led to unprecedented growth in treatment costs. Patients refer to aggressive billing, overtreatment, and redundant levels of unnecessary investigations — often in order to meet internal revenue targets set by the corporate boards.

Reality Check: Physician in investor-owned hospitals often receive monthly revenue targets, making physicians salespeople in disguise.

2. Disparities in Access and Urban Bias: 

Investor-back chains care mainly about metro cities and Tier 1 centers, neglecting the rural and semi-urban populations. With hospitals going for-profit, unprofitable patients — patients with chronic diseases, co-morbidities, or low-paying insurance — are shunned by hospitals.

This is contrary to the basic Indian healthcare ethos — affordability and access.

3. Monopolistic Consolidation: 

This pattern of aggressive acquisition, for instance, Manipal’s purchase of Sahyadri or IHH’s ownership of Fortis, leads to the consolidation of markets. This diminishes patient options, escalates the prices of services, and can ultimately land several players in oligopolistic control of the delivery of critical care.

4. Foreign Ownership of Strategic National Assets

Hospitals aren’t buildings — they’re public trust institutions. When these come under the control of boardrooms in New York, Toronto, or Singapore, long-term goals can diverge from national health interests. Pricing, growth, or closure decisions can prioritize shareholder interests at the expense of the broader public interest.

5. Health Data Sovereignty in Danger

Most forgotten of all is the loss of ownership of Indian healthcare data — becoming more valuable as national digital medicine assumes greater prominence.

The Paradox of Healthcare Data

1. Who Owns Patient Data in Foreign-Controlled Hospitals?

Foreign ownership means outside parties make decisions about storage, processing, and disclosure of information. Foreign cloud providers or digital platforms-based hospitals can send information outside Indian territorial jurisdictions, breaching proposed Digital Personal Data Protection (DPDP) Act, 2023 guidelines.

Loss of Data Sovereignty: India stands to lose the right to determine the way citizens’ sensitive health information is accessed or sold.

2. Monetization without Consent

Indian patient records can be of usefulness in training AI systems, drug research, and actuarial analysis. If there aren’t stringent protocols for consent, there is the possibility of “data colonialism” — Indian data being used to benefit global companies without Indian citizens or researchers reaping the benefit.

3. Cybersecurity and Accountability Risks

With the case of cyber attack (as has been observed in the 2022 AIIMS ransomware attack), it becomes difficult to determine accountability when digital infrastructure is owned by overseas firms. Patients and regulators end up pursuing offshore vendors for data retrieval or legal recourse.

Navigating the Middle Path: Policy Implications

FDI is not harmful in itself. However, 100% FDI without strategic restraints is a policy failure in the making. The following regulatory checks can provide the necessary balance:

1. Ceiling for FDI in Critical Care: Like the telecom or defense sectors, cap foreign investment in major care and tertiary hospitals at 74% — ensuring Indian-majority ownership in the case of hospitals that offer life-and-death services.

2. Cross-Subsidization or Mandatory: Investor-owned hospitals must maintain a specific proportion of beds or revenues for indigent and rural patients at reduced rates as one of the community benefit conditions of licensure.

3. Ethical Supervision & Clinical Audits: Establish independent clinical ethics committees and implement treatment protocol audits as measures to prevent revenue-based overtreatments. Establish transparency in grievance redressal for patients as the norm.

4. Health Care Data Protection Mandates: Adopt storage of all sensitive health information locally.  Ban data monetization without explicit informed consent.   Provide for co-ownership of intellectual property for all AI tools that learn on Indian data.  Make cross-border data transfers subject to disclosure. 

5. Promote FDI in Under-Served Areas

Rather than allowing the capital to coalesce in megacities, offer land subsidies and tax breaks for the investors that set up the infrastructure in Tier 2, 3 cities or dream districts.

6. Time-Limited Foreign Ownership

Add exit clauses in which the whole foreign ownership is allowed for a term, after which Indian stakeholders must resume controlling interest. This ensures technology transfer without foreign control in the long term.

Beyond the Balance Sheet: Reimagining Indian Healthcare

Indian hospitals became high-return investments in this new wave of FDI, but the real return on healthcare is in public health outcomes — not returns to private investors. India must ask difficult questions:

Who determines the price of care — the doctor or the private equity analyst?

Should your child’s surgery or your mother’s chemotherapy depend on global ROI spreadsheets? Can we build ethical, inclusive, high-quality healthcare without losing the soul of the system? 

Final thoughts:

Compassion vs Capital The sentence — “Each patient you treat is lining the coffers of overseas shareholders while you can hardly pay your mortgage on the family home – (A LinkedIn Article)” — is more than a metaphor. It defines the essence of the widening split between healthcare delivery and financial reward. FDI has undoubtedly brought infrastructural advantages and managerial toughness. However, it has also introduced dangerous distortions in equity, ethics, and ownership. When India is also reeling from the problem of the rural-urban health inequities, out-of-pocket payments, and the chronic disease prevalence, unregulated 100% FDI is not the solution — it’s a distraction. India now has to re-balance its strategy — one that embraces capital, but not at the expense of compassion, of national sovereignty, of public trust. 

“The patient comes before the spreadsheet.”

Dr. Prahlada N.B
MBBS (JJMMC), MS (PGIMER, Chandigarh). 
MBA in Healthcare & Hospital Management (BITS, Pilani), 
Postgraduate Certificate in Technology Leadership and Innovation (MIT, USA)
Executive Programme in Strategic Management (IIM, Lucknow)
Senior Management Programme in Healthcare Management (IIM, Kozhikode)
Advanced Certificate in AI for Digital Health and Imaging Program (IISc, Bengaluru). 

Senior Professor and former Head, 
Department of ENT-Head & Neck Surgery, Skull Base Surgery, Cochlear Implant Surgery. 
Basaveshwara Medical College & Hospital, Chitradurga, Karnataka, India. 

My Vision: I don’t want to be a genius.  I want to be a person with a bundle of experience. 

My Mission: Help others achieve their life’s objectives in my presence or absence!

My Values:  Creating value for others. 

References

  1. Digital Personal Data Protection Act, 2023. Government of India. https://www.meity.gov.in/
  2. WHO India Health System Profile, 2021
  3. KPMG-FICCI Report: Re-engineering Indian Healthcare 2.0, 2020
  4. Taylor L. What is data justice? Big Data & Society. 2017;4(2):1–14.
  5. Mittelstadt B et al. The ethics of algorithms. Big Data & Society. 2016;3(2):1–21.
  6. CERT-IN Annual Cybersecurity Report, 2023.
  7. The Ken. India’s Healthcare Investment Boom: At What Cost? 2023.

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