Private equity sees promise in healthcare

The healthcare sector is not only attractive to those looking for a stable job market; it also looks good to private equity firms in the United States and beyond in the coming years, the Business Standard reported.

"In the last two years, healthcare has probably attracted the highest demand from private equity in healthcare delivery and across segments from diagnostics [to] primary care to speciality surgical centres," Vishal Bali, chief executive officer of Fortis Healthcare, told the Business Standard.

In the United States, the private, for-profit hospital operator HCA has created a windfall for private equity firms such as Bain Capital, the New York Times reported. As a result, it has triggered at least 35 other recent hospital buyouts by firms looking to reap the kind of financial success that HCA's backers have enjoyed.

However, the introduction of private equity firms into healthcare delivery creates frictions. According to the New York Times, one of the keys to HCA's success is charging non-emergent patients upfront when they seek care in a hospital emergency room. And doctors say they are under pressure to practice medicine in a different way.

"Their profits are going through the roof, but, unfortunately, it's occurring at the expense of patients," nephrologist Abraham Awwad, M.D., told the Times. His complaints over the safety of the dialysis programs at two HCA-owned hospitals have led to multiple state inquiries.

To learn more:
- read the Business Standard article
- here's the Times article