Private equity’s hospitals in low- and middle-income countries

Since 2017, there have been at least 115 new private equity investments in hospital services across Asia, Africa, and Latin America, including 45 buyouts and 70 growth investments. 2023 saw 29 deals alone spanning 12 countries.[1]

Major US and European private equity firms have been at the helm of some of these deals:

• TPG: Private equity firm TPG manages a $1 billion impact investment fund called the Evercare Health Fund, which owns 29 hospitals across Africa and South Asia.[2] Through a joint venture with Hong Leong Group, TPG also owns Columbia Asia Hospitals, which operates hospitals in Indonesia, Malaysia, and Vietnam.[3]
• CVC Capital Partners: In 2022, private equity firm CVC Capital partners purchased a majority stake in a group of maternal and infant care hospitals in southern Vietnam.[4] In 2023, it invested in The Medical City, a group of hospitals in clinics in the Philippines.[5]
• General Atlantic: In July 2023, private equity firm General Atlantic made a $160 million growth investment in MAC Hospitales, a private hospital chain in Mexico.[6]
• Blackstone: Private equity firm Blackstone acquired the majority stake in 16 of TPG’s multispecialty hospitals in India, under the brand CARE Hospitals in October 2023.[7] CARE Hospitals is also acquiring the majority stake in hospital chain Kerala Institute of Medical Sciences (KIMS) Health Management from a group of private investors, including private equity firm True North.[8] Following these two deals, Blackstone will own one of India’s largest hospital chains, consisting of 23 hospitals with 4,000 total beds, and TPG will retain a minority stake.[9]

The role of Development Finance Institutions

In many low- and middle-income countries, the World Bank works with other Development Finance Institutions (DFIs) to facilitate private equity hospital investments. As defined by Oxfam, “DFIs are wholly or majority government-owned, or multilateral agencies tasked with funding private sector development in the Global South. They are backed by taxpayers’ money and guarantees.”[10]

In 2015, governments around the world agreed to the Sustainable Development Goals (SDGs), including achieving universal health coverage (UHC). Yet, many DFIs, which have obligations under the SDGs, have supported investments in healthcare that undermine UHC. A June 2023 report by Oxfam demonstrates how DFI-facilitated investments have disproportionately gone to private, for-profit healthcare companies, often private equity-backed, and how these investments contribute to unaffordable care and catastrophic medical bills for patients in the Global South. As DFIs help funnel dollars into for-profit healthcare, the public healthcare systems in these countries are eroding while the private sector is failing to provide an accessible and affordable alternative.

Oxfam’s report, titled, “Sick Development: How rich-country government and World Bank funding to for-profit private hospitals causes harm and should be stopped” includes patient stories from a number of private equity-owned hospitals in Kenya, India, and Nigeria, that have been financed by DFIs. Hospitals currently owned through TPG’s Evercare Health Fund feature prominently in the report.

Table: The Evercare Health Fund’s limited partners, or investors, include an assortment of philanthropic organizations and individuals, Development Finance Institutions (DFIs), and multinational healthcare corporations. The following provides an overview of some of the investors in the fund.[11]

Issues at Evercare’s Nairobi Women’s Hospital

At one Evercare hospital in Kenya, Nairobi Women’s Hospital (NWH), reportedly imprisoned multiple patients until their bills were paid. In May 2019, Kenya’s Ministry of Health released a special report detailing “that 12 patients who should have been discharged [were] being detained at NWH over outstanding bills, with 15 bodies held for the same reason.”[12] Oxfam’s report notes that the CEO of the hospital shared in a 2016 media interview that it was the hospital’s policy to detain patients over unpaid bills.[13]

In 2020, leaked internal communications from NWH exposed “the hourly and daily pressure apparently exerted by senior hospital managers on staff to increase admissions and delay discharges to ensure that income targets were met.” In response to the leaks, members of the public came forward to detail unethical treatment they had experienced at NWH and other private hospitals in Kenya.[14]

TPG acquired NWH and other Evercare hospitals in 2019 from the Abraaj Group, a Dubai-based private equity firm, that was mired in scandal around allegations it defrauded its investors, including various development finance institutions.[15] In 2023, TPG sold its majority stake to the hospital’s CEO.[16]

Inaccessible maternal care in Nigeria

At Evercare’s Lekki hospital in Lagos, Nigeria, receiving labor and delivery care is out of reach for most Nigerian women. According to Oxfam, the lowest-cost delivery at this hospital would cost 12 years of total income for the poorest 10 percent of Nigerians, going up to 24 years if it was a caesarean birth.[17]

At Hygeia, another private hospital chain in Nigeria, childbirth is similarly expensive. These hospitals are located in wealthy and exclusive neighborhoods. Oxfam calculates the cheapest childbirth package, assuming no complications, would cost nine months’ worth of income for the bottom 50 percent people in Nigeria.[18]

The case studies of Evercare and Hygeia demonstrate that, despite having the fourth worst maternal mortality rate in the world, some of the healthcare investments that Nigeria is receiving through DFIs are going to private, for-profit hospitals that are out of reach for most Nigerian women.[19]

Catastrophic bills in India

The Oxfam report also documented issues that occurred at Evercare Health Fund’s CARE Hospitals in India. At one CARE Hospital, a woman received a bill equivalent to $36,000 USD for her mother’s care after the hospital refused to accept her government insurance card. The Oxfam report details,

“Eva used her life savings; borrowed from friends; took out a loan, as did her father; and sold the small family plot of land. Most devastating for her were the personal consequences of her huge financial losses and ongoing debt: ‘The most damaging thing that has happened to me is that my long-time love had to marry some other person because I couldn’t escape from this huge financial tangle and get married to him… I developed some mental health problems because of all the stress… I only sleep with the help of medicines. I’m unable to make decisions easily because of all the distress. I still feel trauma from the bad experience.’”[20]

Oxfam identified other individuals whose government insurance was rejected at CARE Hospitals and another private hospital chain financed by DFIs, which left these individuals on the hook to pay for bills that Oxfam alleges they should not have had to pay. In multiple cases, the bills were catastrophic, resulting in crushing debt.[21]

A promotional video on TPG’s Evercare Group’s webpage cites how catastrophic healthcare expenses push people into poverty around the world, and how there is a demand for high-quality affordable healthcare. “That’s where Evercare is stepping in – to serve millions across India, Pakistan, Kenya, and Nigeria,” the narrator in the video proclaims.[22]

CARE Hospitals in India were previously owned by TPG’s Evercare Fund; since October 2023, Blackstone owns the majority stake while TPG retains a minor stake.[23]

Conclusion

In the US, private equity firms have aggressively looted safety net hospitals, stripped out valuable real estate,cut critical but less profitable services, and exploited government funding programs designed to support and stabilize healthcare access. These practices have often had far-reaching consequences for many patients and workers across the United States in the form of eroding patient quality of care and access to care, layoffs of healthcare workers, and even hospital closures.[24]

Regulators and policymakers have taken notice, and scrutiny of private equity’s investments in the US healthcare sector is heating up. Multiple states have introduced or passed legislation intended to curtail private equity’s harmful practices in healthcare,[25] and the federal government has signaled increased antitrust focus on private equity in healthcare,[26] its role in Medicare and Medicaid fraud,[27] and more.[28]

But as private equity investments in healthcare receive increasing negative attention in the US, the industry has been exporting its harmful business model abroad with the help of Development Finance Institutions (DFIs). Stories of unaffordable care, catastrophic medical bills, denial of government insurance, and even jailing patients for unpaid debt have already transpired at private equity-owned hospitals in Nigeria, Kenya, and India. DFIs, using taxpayers’ dollars, are helping facilitate and fund these private equity healthcare acquisitions, even as troubling stories pointing to their harms are mounting.

To remedy these issues, Oxfam recommends that DFIs should cease funding for-profit healthcare providers, take action to remedy any harms resulting from their investments, and introduce greater transparency into their investments. Oxfam also recommends that governments cease promoting and financing the privatization of healthcare, and instead safeguard and invest in public health systems. This will necessitate robust oversight of the DFIs in which they fund.[29]

For further reading and to see the full list of Oxfam’s recommendations, see “Sick Development: How rich-country government and World Bank funding to for-profit private hospitals causes harm and should be stopped” (June 2023).

[1] PitchBook deals search, as of May 2024.

[2] “Evercare | The Rise Fund.” Accessed May 10, 2024. https://therisefund.com/portfolio/evercare.

[3] Tennant, Fraser. “TPG and Hong Leong to Acquire Columbia Asia Hospitals for $1.2bn.” Financier Worldwide, December 2019. https://www.financierworldwide.com/tpg-and-hong-leong-to-acquire-columbia-asia-hospitals-for-12bn;

[4] Nguyen Thi Bich Ngoc. “CVC Capital Partners Picks 60% Stake in Vietnam-Based Phuong Chau Hospital.” DealStreetAsia, September 15, 2022. https://www.dealstreetasia.com/stories/cvc-capital-phuong-chau-hospital-307941. “Hong Leong Group and TPG Announce Agreement to Acquire Columbia Asia Hospitals in South East Asia.” September 18, 2019. https://www.businesswire.com/news/home/20190918005246/en/Hong-Leong-Group-and-TPG-Announce-Agreement-to-Acquire-Columbia-Asia-Hospitals-in-South-East-Asia.

[5] The Medical City. “The Medical City Poised For Renewed Growth, Welcomes CVC Capital Partners Asia V as New Investor.” The Medical City. Accessed May 10, 2024. https://www.themedicalcity.com/news/medical-city-poised-renewed-growth-welcomes-cvc-capital-partners-asia-v-new-investor.

[6] General Atlantic. “MAC Hospitals Announces up to $160M Growth Investment From General Atlantic to Expand Quality Affordable Healthcare Access Across Mexico,” July 25, 2023. https://www.generalatlantic.com/media-article/mac-hospitals-announces-up-to-160m-growth-investment-from-general-atlantic-to-expand-quality-affordable-healthcare-access-across-mexico/.

[7] Condon, Alan. “Blackstone to Acquire 16-Hospital System in India.” Becker’s Hospital Review, October 31, 2023. https://www.beckershospitalreview.com/hospital-transactions-and-valuation/blackstone-to-acquire-16-hospital-system-in-india.html.

[8] Balakrishnan, Reghu. “Blackstone-Owned Health Platform Quality Care to Buy KIMS Kerala.” The Economic Times, October 26, 2023. https://economictimes.indiatimes.com/industry/healthcare/biotech/healthcare/blackstone-owned-health-platform-quality-care-to-buy-kims-kerala/articleshow/104707660.cms.

[9] Condon, Alan. “Blackstone to Acquire 16-Hospital System in India.” Becker’s Hospital Review, October 31, 2023. https://www.beckershospitalreview.com/hospital-transactions-and-valuation/blackstone-to-acquire-16-hospital-system-in-india.html.

[10] Pg. 4, “Sick Development: How Rich Country Government and World Bank Funding to For-Profit Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023. https://www.oxfam.de/system/files/documents/bp-sick-development-funding-for-profit-private-hospitals-260623-en.pdf.

[11] “Evercare | The Rise Fund.” Accessed December 6, 2023. https://therisefund.com/portfolio/evercare.

[12] Pg. 16; “Sick Development: How Rich Country Government and World Bank Funding to For-Profit Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023.

[13] Pg. 15; “Sick Development: How Rich Country Government and World Bank Funding to For-Profit Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023.

[14] Pg. 17; “Sick Development: How Rich Country Government and World Bank Funding to For-Profit Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023.

[15] Thomas, Jr., Landon. “Leading Private Equity Firm Accused of Misusing Funds.” The New York Times, February 2, 2018, sec. Business. https://www.nytimes.com/2018/02/02/business/abraaj-naqvi-world-bank.html; Azhar, Saeed. “TPG-Backed Evercare Eyes Expansion of Ex-Abraaj Healthcare Business.” Reuters, September 13, 2021, sec. Markets. https://www.reuters.com/article/idUSL4N2QE06V/.

[16] Yaura, Bill. “Doctor Takes Over Nairobi Women’s Hospital After Acquiring Majority Stake.” Business Today, July 27, 2023, sec. SMART BUSINESS. https://businesstoday.co.ke/doctor-takes-over-nairobi-womens-hospital-after-acquiring-majority-stake/.

[17] Pg. 29; “Sick Development: How Rich Country Government and World Bank Funding to For-Profit Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023.

[18] Pg. 29; “Sick Development: How Rich Country Government and World Bank Funding to For-Profit Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023.

[19] Pg. 29; “Sick Development: How Rich Country Government and World Bank Funding to For-Profit Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023.

[20] Pg. 10; “Sick Development: How Rich Country Government and World Bank Funding to For-Profit Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023.

[21] Pgs. 19-23; “Sick Development: How Rich Country Government and World Bank Funding to For-Profit Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023.

[22] “Evercare | The Rise Fund.” Accessed May 10, 2024. https://therisefund.com/portfolio/evercare.

[23] Condon, Alan. “Blackstone to Acquire 16-Hospital System in India.” Becker’s Hospital Review, October 31, 2023. https://www.beckershospitalreview.com/hospital-transactions-and-valuation/blackstone-to-acquire-16-hospital-system-in-india.html

[24] Private Equity Stakeholder Project PESP. “PESP Private Equity Hospital Tracker.” Accessed December 20, 2023. https://pestakeholder.org/private-equity-hospital-tracker/.

[25] Cumming, Chris. “States Aim to Combat Private-Equity Healthcare Takeovers.” Wall Street Journal, April 18, 2024, sec. WSJ Pro. https://www.wsj.com/articles/state-private-equity-healthcare-takeovers-cb43f70b; sidley.com. “State Healthcare Transaction Review Laws: The U.S. Landscape Going Into 2024,” January 4, 2024. https://www.sidley.com/en/insights/newsupdates/2024/01/state-healthcare-transaction-review-laws.

[26] Levine, Gail F., Thomas V. Panoff, Daniel K. Storino, Scott P. Perlman, Rachel J. Lamorte, and Jeremy B. Silas. “Private Equity in Healthcare: Increased Scrutiny from FTC, DOJ, and HHS | Insights | Mayer Brown.” Mayer Brown (blog), March 11, 2024. https://www.mayerbrown.com/en/insights/publications/2024/03/private-equity-in-healthcare-increased-scrutiny-from-ftc-doj-and-hhs.

[27] Penn, Ben. “US to Prioritize Private Equity’s Role in Healthcare Fraud.” Bloomberg Law, February 22, 2024. https://news.bloomberglaw.com/us-law-week/us-to-prioritize-private-equitys-role-in-healthcare-fraud; Department of Justice “Principal Deputy Assistant Attorney General Ethan P. Davis delivers remarks on the False Claims Act at the U.S. Chamber of Commerce’s Institute for Legal Reform,” June 26, 2020 in Washington D.C. https://www.justice.gov/civil/ speech/principal-deputy-assistant-attorney-general-ethan-p-davis-delivers-remarks-false-claims.

[28] Vogel, Susanna. “Senate Ramps up Scrutiny of Private Equity ‘Greed’ in Healthcare.” Healthcare Dive, April 5, 2024. https://www.healthcaredive.com/news/senate-private-equity-probe-steward-emergency-room-staffing/712205/.

[29] Pgs. 52-53; “Sick Development: How Rich Country Government and World Bank Funding to for-Proft Private Hospitals Causes Harm, and Why It Should Be Stopped.” Oxfam, June 2023. https://www.oxfam.de/system/files/documents/bp-sick-development-funding-for-profit-private-hospitals-260623-en.pdf.