Hospitals or Profiteering Centres?

I stay in Baner, Pune. An upcoming locality that has transformed dramatically in the last eight years.

-- Concrete towers now overwhelm the skyline.

-- Streets are crowded.

-- Bars, cafés, and restaurants appear every hundred metres.

-- But one change disturbs me the most: the sheer number of hospitals.

They’ve multiplied like monsoon mushrooms: sudden, silent, and everywhere.

At first glance, this appears like a good development; more healthcare access, more convenience.

But the inner story is quite saddening and far from reassuring.

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The New Face of Healthcare: Luxury + Profit

Post-COVID, the healthcare landscape has shifted fundamentally. Seasoned VCs and deep-pocketed investors finally discovered the “profit potential” in healthcare.

Today, many hospitals are being built like five-star hotels. Marble lobbies, gourmet food, swanky rooms, mood lighting.

Healthcare has quietly morphed into a consumer business.

And what I see today is deeply troubling:

• Heavy, unjustified charges

• Add-on costs that appear out of nowhere

• Unnecessary tests “just to be safe”

• Delayed discharges to extend billing

• And in extreme cases, faking ongoing treatment to inflate the bill

One friend recently shared a heartbreaking story: His father passed away in the ICU, but the hospital pretended to continue treatment for another day before declaring him dead.

Nothing can justify this level of greed.

And with that, an uncomfortable question arises:-

Are we treating patients, or monetising them?

To make matters worse, hospitals and insurance companies often work hand-in-glove.

A patient is no longer a human being. He is an insurance claim.

And that is perhaps the saddest reality of today’s so-called “modern” healthcare.

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Profit Is Not a Problem; Profiteering Is

Every business must make a profit. But should profit have no moral boundary?

Is it acceptable to maximise profits from people who are suffering, vulnerable, and afraid?

When a family walks into a hospital, they are not customers. They are trusting you with their life.

Shouldn’t there be:

• regulation on pricing?

• transparency in billing?

• strong punishments for unethical practices?

These questions linger. But answers are missing.

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The Rise of Listed Healthcare Players

As an investor, I study every sector. I carry out detailed fundamental research on many. However, upon closer examination of the hospital sector, a few facts genuinely bother me.

There are around 34 listed hospital companies today, and many more are lining up. The intent is obvious: this is a high-margin business with strong returns and predictable demand.

When I listen to the quarterly conference calls of these companies, I have noticed one thing: CEOs proudly announce how many new beds they’ll add next quarter. 

Beds… as if they are expanding manufacturing units.

And the deeper you go, the more this mindset becomes obvious. These earnings calls celebrate metrics that have nothing to do with patient recovery or humane care. Instead, the narrative revolves around a set of hard, quantifiable parameters:-

• ARPOB (Average Revenue per Occupied Bed): How much money each filled bed generates; the core revenue driver.

  
  

• ALOS (Average Length of Stay): The longer a patient stays, the more the billing is; a key profitability lever.

  
  

• Bed Occupancy Ratio: The percentage of beds filled at any time; higher occupancy means higher earnings.

  
  

• Revenue per Available Bed: Productivity of every bed, even if unoccupied; treating beds like fixed assets.

  
  

• OT Utilisation: How much the operating theatres are in use because surgeries bring the highest margins.

  
  

• EBITDA per Bed: Profit calculated per bed, similar to profit per machine in manufacturing.

  
  

• Outpatient Revenue Metrics: How much each walk-in or OPD visit earns, focusing on volume over value.

  
  

• Diagnostics Contribution: Revenue from tests and investigations; often a major profit booster.

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This vocabulary sounds less like healthcare and more like a business chasing profit targets.

It makes me wonder: are we healing a patient, or simply measuring how efficiently he can be converted into revenue?

Instead, I feel a true healthcare leader should be asking:

• How do we reduce the cost of treatment without compromising quality?

• How do we make the patient experience more humane?

• How do we strengthen ethics and transparency?

• How do we train our staff to empathise, not upsell?

• How do we ensure that no patient pays even ₹1 extra unnecessarily?

• How do we build a hospital that families trust and not fear?

These are the KPIs that matter. Not bed expansion or revenue per occupied bed.

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Hope …

Hospitals were meant to be places of healing, not revenue generators.

Places where humanity comes first, not profitability.

Places where patients walk in with fear, and walk out with relief, not with financial trauma.

The healthcare system desperately needs a reset, not in technology, not in infrastructure, but in ethics.

I hope someday a CEO will stand up and say:

“We run the most ethical hospital in India.

No unnecessary tests.

No inflated bills.

No delayed discharges.

No tricks.

Just ethical, transparent, compassionate healthcare.”

How rare would that be?

How powerful would that be?

I hope we see that day….

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-- Pady