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June 21, 2018

Floridian of the Year: Kiran Patel: ‘First, I give to charity'

Amy Martinez | 12/28/2017

The Medical School

In December 2016, Patel paid $10 million for 27 acres of bayfront property in Clearwater that had been home to a failed private Christian college. He planned to use the site to build an independent osteopathic medical school catering to both U.S. and international students.

Patel had created other health care institutions. In the mid-1990s, he’d built a 50-bed hospital in India and named it for his late father.

Several weeks after the purchase, George Hanbury, president of Nova Southeastern University, invited Kiran and his wife, Dr. Pallavi Patel, a pediatrician, to dinner at Roy’s Restaurant in Tampa. The Patels had met Hanbury five years earlier while visiting a niece and nephew at Nova, where they were dental students. Hanbury and Patel had become friends, bonding over their upbringings.

“We both grew up with an appreciation for hard work,” says Hanbury, the son of a longshoreman from Norfolk, Va. “Both of our parents pushed education.”

Over dinner, Hanbury presented the Patels with a proposal. Nova already had an osteopathic medical school in Broward County, Hanbury explained, and could establish a second, accredited location in Clearwater. “Why reinvent the wheel?” he told the Patels. “We’ll bring you instant credibility.”

In October, at an event heavily covered by the Indian press, the Patels joined Hanbury in Davie to announce a $200-million deal that ranks as the largest contribution to Nova. The school gets $50 million in cash, some of which will go toward scholarships for students, and Patel will invest another $150 million to develop a Nova osteopathic med school campus on the Clearwater site. Patel will retain ownership of the property and lease it to Nova.

The campus also will include a school offering degrees for physician assistants, occupational therapists, paramedics and other health care professionals. That health sciences school, with five locations statewide, will bear Pallavi Patel’s name. Meanwhile, Patel also plans to build medical schools in India and Zambia.

“It’s tough to say which is No. 1 — education or health care,” says Patel, but “if you don’t have health, everything is useless.”

The Anthem Deal

Kiran and Pallavi Patel came to the U.S. on green cards in 1976 and did their specialty training at Columbia University in New York — he in cardiology, she in pediatrics. They became American citizens a decade later.

In 1982, they followed Kiran Patel’s brother Pradip, who owned a hotel, to Tampa.

“I had decided I was never going to work for anybody,” Patel says. “I don’t want to be No. 2 or No. 3. I always want to be that No. 1 guy.”

He borrowed money to take over a retiring physician’s local practice. At the time, fewer and fewer doctors were accepting HMO patients. “HMOs were like the plague,” he told a group of local entrepreneurs in 2012. “Nobody wanted to touch a patient who had an HMO as his insurance.” Patel says he treated the patients who were being turned away and learned to make money in managed care. He began buying other doctors’ practices and eventually built a multi-specialty network with more than 8,000 patients.

In 1987, with Pradip as a key employee, Patel entered the health insurance business and took over WellCare, a small HMO on the verge of bankruptcy. He renegotiated the company’s debt and cut costs. Then, Florida began requiring Medicaid patients to enroll in HMOs, a major boon to the company.

By 2002, WellCare had 1,200 employees and annual revenue of more than $1 billion. A group of investors including George Soros bought the company for a reported $200 million. (Years later, WellCare, which became a publicly traded company, got into trouble with the government over accusations of health care fraud, paying more than $400 million to resolve criminal charges and lawsuits.)

In 2007, at the end of a five-year non-compete agreement with WellCare, Patel took a shot at turning around another managed care company. During the next decade, America’s 1st Choice, which operates Medicare Advantage plans under the Freedom Health and Optimum brands, grew to $1.4 billion in revenue and $10.1 million in annual profit.

Last May, Freedom Health agreed to pay $31 million to settle a federal whistleblower lawsuit alleging overbilling and risk-adjustment fraud; the company admitted no liability and said it settled rather than face a prolonged legal battle. “I decided to take it as a cost of doing business and move on with life,” Patel says.

In October, he sold America’s 1st Choice to Indianapolis-based Anthem for an undisclosed amount. Experts estimate that Anthem paid about $1 billion.

“There comes a point where one has to understand one’s own limitation,” Patel says. “To go to the next level, either I had to raise capital or do something different. I’m an entrepreneur, a free spirit. I don’t like to report to anybody.”

Tags: Floridian of the Year

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