Improving Healthcare Finance

This Pune hospital crashed through 3 different owners in just 6 years & made each one richer than the last. The hospital is Sahyadri Hospitals, one of Maharashtra’s largest healthcare chains. Here’s how the ownership changed over the years: → 2019: Private equity firm Everstone Capital acquires Sahyadri for ~₹1,000 crore. → 2022: Ontario Teachers’ Pension Plan (OTPP) buys it for ~₹2,500 crore. → 2025: Temasek-backed Manipal Hospitals acquires it for ~₹6,400 crore. Same hospitals, same cities & mostly the same doctors treating patients every day. So what exactly were investors paying for? They were buying things that take years to build in healthcare: → doctors whose names bring patients to the OPD → referral networks across cities → patient trust  → a hospital brand families rely on during critical moments These are invisible assets. They rarely show up on balance sheets, but once they exist, they become extremely valuable. Investors see them as a scalable healthcare platform. Expand locations, add specialties, improve utilisation and the same hospital suddenly generates far higher profits. That’s how valuations jump. And Sahyadri isn’t an isolated story. Between 2022 and 2024, India’s healthcare sector saw 594 M&A and PE deals worth over $30B. Yet PE-backed chains still control only 15–20% of India’s private hospital beds. Which means the real consolidation wave in Indian healthcare is still ahead. Because in the end, the true value of a hospital isn’t just the building. It’s the trust built by doctors and patients over years & that trust is one of the most valuable assets in healthcare 🩺

GST Reform & Healthcare: A Step Toward Affordability? The revised GST framework effective September 22 simplifies rates to Nil, 5%, 18% and 40%. For healthcare, three changes stand out: 1️⃣ Medical essentials at lower rates – Thermometers, medical oxygen, test kits, devices, and spectacles now fall from 12–18% to 5%. This directly reduces the cost burden for patients. 2️⃣ Insurance at nil – Health and life insurance now attract no GST. This could accelerate penetration, especially in Tier II and Tier III cities where affordability has long been a barrier. 3️⃣ Compliance simplified – Streamlining into four slabs reduces administrative complexity for pharma and medtech companies. For an industry already navigating stringent GMP, GCP, and GDP regulations, this matters. But the bigger picture? Lower GST doesn’t just make products cheaper. It can improve adherence, drive wider insurance coverage, and ease compliance costs for the ecosystem. The real test will be in execution. Will lower device costs translate into deeper rural access? Will nil GST insurance drive mass adoption or remain urban centric? Will simplified slabs reduce disputes and bottlenecks for pharma manufacturers? For me, this reform is less about tax slabs and more about strengthening the affordability and access loop in healthcare. 📌 As we move forward, one thing is clear. Policy design and industry action must converge to make these benefits visible at the patient level. For pharma leaders and policymakers, how do you see GST shaping affordability and compliance over the next 2–3 years? (Reference: Ministry of Finance release, Angel One report, 2025)

The Hidden Cost of Private Equity in Healthcare: Lessons from Steward's Collapse Don Berwick and I recently had a sobering conversation with Dr. Gregg Meyer for our podcast #TurnOnTheLights about what happened at Steward Health Care in Massachusetts, and it's a story every healthcare leader needs to understand. As Dr. Meyer explains on the program, here's one way that private equity has been operating in healthcare: borrow massive amounts of money at low interest rates, acquire healthcare assets, then chase returns high enough to service that debt. It's a model built on leverage and investment philosophy, not on care delivery. But Steward's story reveals something even more troubling. This wasn't really about healthcare at all—it was about real estate arbitrage disguised as hospital management. As costs got squeezed to service the debt, something insidious happened on the ground. Surgeons would start procedures only to discover the supplies needed to complete them weren't available. In one case, a patient needed a prosthesis during surgery—there was only one left, no back up plan if something went wrong! Dr. Meyer described how providers simply got used to it. They called it "normalization of deviance"—when the unacceptable gradually becomes accepted because you're forced to adapt just to keep caring for patients. The circular logic of private equity then accelerated the collapse: Steward was forced to sell their real estate to a real estate insurance trust, which leased back the land to the hospitals at rates that ultimately drove them into bankruptcy. By May 2024, Massachusetts was facing a true public health emergency. Thanks to important work establishing an incident command structure, six of eight hospitals were transferred to nonprofit systems. But two closed permanently. Communities lost access to care. Patients were displaced. Clinicians were traumatized. We need to ask ourselves: What kind of healthcare system do we want? One optimized for financial returns, or one designed for human flourishing? The Steward collapse isn't just a cautionary tale. It's a call to action. #HealthcareLeadership #PatientSafety #HealthEquity #SystemsThinking

We know that private equity (PE) in healthcare is increasingly coming under fire, and with good reason. But vilifying PE in healthcare for the sake of villifying PE, without actually backing up criticisms with real data and concrete examples of the harm caused, is not necessarily valuable. So, here is some data as well as concrete examples. In 2023 alone, a shocking 21% of healthcare company bankruptcies were tied to these financial predators. PE bankruptcies in healthcare have exploded 112% in five years. PE firms buy healthcare companies, saddle them with unsustainable debt, strip their assets, and when these companies inevitably collapse under financial strain, they leave chaos in their wake—job losses, diminished care, and shuttered facilities. These are not victimless crimes. Envision Healthcare, owned by KKR, crumbled into bankruptcy, displacing thousands of employees and compromising crucial medical services. The Center for Autism and Related Disorders, swallowed up by Blackstone, went bankrupt, abruptly cutting off services for countless vulnerable patients. PE ownership was linked to 20,000 premature deaths in nursing homes over 12 years, according to the National Bureau of Economic Research. These are not isolated incidents but patterns of a systematic onslaught on healthcare by PEs relentless rapacity. The infuriating reality is that while healthcare companies buckle under excessive debt, PE moguls make billions by exploiting various financial strategies to maximize their profits. Dividend recapitalizations (loading companies with debt to fund dividends back to the PE firm), increases returns but also company debt. They also exploit interest deductibility to lower taxable income by deducting interest on borrowed funds. Management and monitoring fees are extracted as additional revenue streams, often prioritizing them over other company needs. PE firms asset strip, often leasing back valuable assets in order to extract cash while saddling the company with ongoing lease payments. Lastly, they use the step-up in basis tax provision to reduce capital gains taxes on assets sold, by resetting their tax value at the time of purchase. These maneuvers illustrate how PE firms legally manipulate financial and tax rules, often to the detriment of the companies they acquire. Abuse of the bankruptcy system isa the final exploit, a calculated escape hatch that allows them to walk away unscathed while the companies, employees, and patients they've burdened suffer the consequences. In many cases, and in increasing frequency, PE firms profit from their financial engineering while leaving behind a trail of human and economic devastation.

I’ve found that most HealthTech founders assume innovation is their differentiator. In practice, it rarely is. The UK doesn’t lack technical brilliance or world-class research. What it lacks is translation – the ability to move from promising R&D to meaningful, sustained adoption inside the NHS. The hardest problems aren’t technical. They’re organisational. Structural, financial, and cultural frictions shape the pace of progress far more than the quality of the technology itself. Procurement is the clearest example. Despite endless reform attempts, it still prizes unit cost over value. I’ve watched technologies capable of saving millions across a pathway fail an affordability test because their upfront cost exceeded a local trust’s limit. It’s no surprise that nearly a third of suppliers now avoid NHS tenders altogether – the commercial terms just don’t work. Funding models make it worse. More than 70% of NHS trust leaders cite financial constraints as the main barrier to digital transformation. Even when solutions clearly deliver long-term savings, capital accounting rules often prevent reinvestment of those gains into operational budgets. The result is predictable: effective innovations that never reach scale because the fiscal space to adopt them simply doesn’t exist. Then there’s the human system. Clinical adoption depends less on technical brilliance and more on how technology fits the rhythm of care. Too often it adds friction – extra logins, duplicate steps, more admin. Around one in three trust leaders still call poor IT infrastructure a critical barrier. And culture matters just as much. Clinicians’ scepticism toward opaque AI tools isn’t resistance. It’s accountability. Trust has to be earned through transparency, evidence, and co-development. The technologies that scale are the ones that integrate clinicians early, turning potential critics into advocates. Yes, there are positive shifts. NICE’s move to consider cost-effectiveness, not just cost-saving, is significant. Regulatory agility has improved. But the underlying system frictions remain. The UK is still a world-class testbed, not yet a world-class market. After two decades, my conclusion is simple: HealthTech success in the UK isn’t about innovation quality anymore. It’s about system mastery. The winners will be those who can navigate NHS economics, align incentives, build trust, and embed change deep within clinical practice. The frontier, as I see it now, isn’t technical. It’s organisational. P.S. If you’re a HealthTech founder, DM to explore how to navigate the system, not just build for it.

U.S. job growth is concentrated in one sector: healthcare. A report sharing the latest data on job growth suggests healthcare is in serious distress. --- Recently Eric Pachman published a report with data suggesting the U.S. labor market is riding a narrow line. Over 60% of all new private-sector jobs in the last year came from just two sectors: healthcare and social assistance. However, the report suggests policymakers may be oblivious to the vulnerability of the healthcare sector. --- Here are the three structural issues related to healthcare mentioned in Eric's report: 1. Healthcare jobs are now a primary driver of job growth across the entire economy. BLS data shows healthcare has delivered far more than its “fair share” of job growth across both short-term (1 year) and long-term (30 year) time horizons. The rest of the private sector is barely treading water. 2. Structural pressures in healthcare are increasing. -ADP’s employment data shows a possible contraction in healthcare jobs, even as BLS shows increases. -Medicaid cuts, now law, are projected to remove 10.5 million people from coverage by 2034. -Vertical integration and opaque discount-based contracts (especially in pharmacy) are eroding public trust and are facing regulatory backlash. If these discount-based prices come to an end, it is reasonable to expect profits to decline in the healthcare sector. US healthcare is facing both financial pressure and public resentment at the same time. 3. #Policy tools aren’t aligned with the problem. Monetary policy (the Fed lowering interest rates) can’t fix structural labor issues like those above. If healthcare hiring slows (due to reimbursement cuts, labor shortages, or transparency mandates), the ripple effects could reach every part of the economy. --- Eric recommends a few things for policymakers related to healthcare: -Acknowledge #healthcare as a structural pillar of the labor market. -Consider the labor market impacts of any cost-cutting or transparency reforms (e.g., #Medicaid policy, reimbursement models, and immigration frameworks) to ensure the workforce that delivers care is sustainable. -Since many current threats to the economy broadly and to healthcare employment specifically are structural and therefore cannot be addressed with monetary policy changes, such as interest rate cuts, more focus should move to fiscal/non-monetary policy. With an economy this reliant on healthcare jobs (and immigration) for growth/stability, we may be approaching a point where policy missteps in either arena could strain the entire labor market, not just the healthcare sector. --- Do you agree with the potential effects in this report? Are you worried about the structural impacts to healthcare from coming policy changes?

New modelling shows that government will need to deliver on NHS productivity and prevention promises to prevent health costs spiralling. Joint analysis by LCP and IPPR projects the cost of government-funded healthcare to 2034/35 under various scenarios. If recent trends continue, healthcare spending will grow to over 9.5% of GDP in 2034/35. However, improvements in productivity and prevention could almost completely flatten this growth, with spending remaining at around 8% of GDP in a decade’s time. If delivered, these improvements would provide annual savings of over £50bn in 2034/35, comparable to the current UK defence budget. Excellent work from Andrew Pijper and Dr Godspower Oboli updating previous LCP Health Analytics modelling to reflect the latest data and developments, and new scenarios developed with IPPR for their new report. It was a pleasure to collaborate with Annie Williamson, lead author of the insightful new report "Realising the reform dividend: a toolkit to transform the NHS", which is out today. Links in comments to LCP blog and analysis and the IPPR report.

Rising insurance premiums should not be explained by medical loss ratio alone. MLR is useful, but it is only one indicator. A more credible assessment should also consider claims cost per insured life, case mix, provider price growth, utilisation growth, administrative expense ratio, underwriting margin, capital adequacy, and the out-of-pocket burden shifted to patients. To tackle rising insurance premiums, I find it helpful to use a simple 5-part framework: 1. Measure properly Look beyond a single ratio. Separate price growth from utilisation growth, and distinguish real medical inflation from administrative inefficiency or margin expansion. 2. Moderate demand intelligently Use co-payments, deductibles, and benefit design carefully to reduce low-value care, without deterring necessary care. 3. Manage provider incentives Strengthen fee benchmarks, episode-based payment where appropriate, panel governance, and pre-authorisation for selected high-cost services. 4. Monitor insurer behaviour Require greater transparency on expenses, margins, claims denial patterns, and service performance, not just claims payouts. 5. Minimise patient harm Any premium control strategy should protect affordability, access, and continuity of care, especially for patients with genuine healthcare needs. This matters because the same premium increase can mean very different things. It may reflect genuine medical inflation and more appropriate care. But it may also reflect higher operating costs, preserved margins, weak cost control, or greater transfer of financial risk to patients. In healthcare finance, the real issue is not whether spending rises. It is whether the increase is proportionate, transparent, and tied to real value. As Program Coordinator for the Master of Health Management and Policy at Newcastle Australia Institute of Higher Education, I am interested in these questions because they sit at the intersection of policy, economics, regulation, and clinical reality. If you are interested in health insurance, healthcare finance, and the design of sustainable health systems, connect with me. Newcastle Australia Institute of Higher Education https://lnkd.in/gtHAXi8m

India spends more on healthcare each year but, the key question persists: are health outcomes improving at the same pace?   After six months of cross-sector collaboration, the report “𝗪𝗵𝗮𝘁 𝗪𝗲 𝗩𝗮𝗹𝘂𝗲 𝗶𝗻 𝗛𝗲𝗮𝗹𝘁𝗵: 𝗔 𝗖𝗼𝗮𝗹𝗶𝘁𝗶𝗼𝗻 𝗩𝗶𝘀𝗶𝗼𝗻 𝗳𝗼𝗿 𝗕𝗲𝘁𝘁𝗲𝗿 𝗖𝗮𝗿𝗲 𝗶𝗻 𝗜𝗻𝗱𝗶𝗮” has been released. It sets out a clear and strategic roadmap to help shift India’s health system from a volume-led approach to one centred on value and outcomes.   I am proud to have contributed to this unique coalition and to have shared perspectives from an insurer’s point of view. Months of structured, constructive dialogue and collaboration have helped reimagine the future roadmap of healthcare in India. With a ringside, three-tiered view of the ecosystem – across my organisation, the insurance sector, and the broader system – I was particularly invested in exploring avenues to strengthen health financing and drive sustainable outcomes.   Congratulations to Leapfrog to Value and its CEO Dr. Balkrishna Korgaonkar for spearheading this important effort and bringing together diverse voices across the healthcare ecosystem.   The coalition’s work identifies core systemic gaps such as fragmented care, limited transparency of outcomes, and financing structures that reward service volume over improved health. It also highlights promising bright spots across the system.   The initiative has resulted in four catalytic proposals: ✅ People’s Commission for Health Improvement – transparent benchmarking to strengthen accountability ✅ Primary Health Care Design Laboratory – prototyping integrated, outcome-focused care models ✅ Business Case for Quality, Safety & Patient Experience – aligning incentives with what truly matters to patients ✅ Coordinated Care Bundles – piloting bundled payments for NCDs and surgeries   The roadmap presents a practical agenda aimed at improving alignment, equity and measurable outcomes. It is an important step toward a more resilient and health-focused future for India.   You can download the strategy here: https://lnkd.in/gErbNiFV Bindu Ananth, Dr. N. Krishna Reddy, Ravi Vishwanath, Sarang Deo, Tejasvi Ravi, Vishnu Vasudev, Rubayat Khan, Dr. Balkrishna Korgaonkar and Chintan Maru.

A healthcare CFO I deeply respect shared a set of lessons every revenue cycle leader should take to heart: 1️⃣ Documentation is strategy. In healthcare, payment, quality, and compliance all flow from clinical documentation. Treat it like a core operating system, not back-office paperwork. 2️⃣ Incentives and workflow must align. When clinicians have clear, in-workflow prompts and aligned incentives, documentation improves, so do quality measures and appropriate reimbursement. 3️⃣ Real-time beats retro. Support inside the encounter (not after-the-fact queries) reduces friction and improves accuracy, critical in a labor-constrained environment. 4️⃣ Minimize customization; maximize integration. Heavy EHR customization slows you down. Staying close to vendor “foundation” unlocks more functionality, faster. 5️⃣ Technology > temporary labor. Sustainable results come from end-to-end tech that surfaces the right decision at the right moment, not armies of manual reviewers. 6️⃣ This isn’t “coding for dollars” vs. “coding for quality.” Good documentation is a win-win: clearer clinical stories, stronger quality indicators, cleaner compliance, and appropriate revenue. 7️⃣ Measure what matters and publish the score. Track RAF, CMI, query rates, denials, and net revenue impact to drive behavior change. 8️⃣ Tooling gaps show up in outcomes. Teams on integrated platforms consistently achieve stronger CDI and risk capture than those without comparable tools. For CFOs, the playbook is straightforward: make CDI a strategic pillar, align incentives, keep the tech stack integrated, and push decision support into the workflow. That’s how mission and margin reinforce each other. Curious what’s actually moving the needle in your organization and what’s working (and what isn’t) to strengthen CDI? Let's chat!