by Amy Martinez
Updated 9 months ago
Health Care Entrepreneur
Tampa entrepreneur Kiran Patel has made hundreds of millions of dollars growing and selling health care companies. Together with his wife, Pallavi, he has given more than $240 million over the years to support the arts, education and health care in Florida. His business and philanthropic activities in 2017 alone would be lifetime accomplishments for many.
In the mid-2000s, Kiran Patel paid about $40 million for three parcels of beachfront land in Clearwater Beach on which a Days Inn and two other hotels sat. He demolished the hotels and lined up financing for a resort. But his plans fell through with the 2008 recession, and the property stood vacant.
As the economy recovered, city officials grew impatient, with some questioning whether Patel could pull off the project. “This is a prime location. But if Dr. Patel can’t put this together, then maybe he ought to figure out some other plan,” Clearwater Mayor George Cretekos told the Tampa Bay Times in 2013.
Three years ago, construction got underway after Patel reconfigured the deal and secured new financing. In January 2017, he spoke to a crowd that had gathered to celebrate the opening of the $175-million, 750,000-sq.-ft. Wyndham Grand resort, the largest development on Clearwater Beach.
Patel invoked the American dream, saying it was proof that “vision and innovation, faith and perseverance, can create something where there was once nothing.”
“Well, nothing but the world’s most expensive parking lot,” he added, prompting laughter from the crowd.
Patel, 68, a cardiologist, comes by faith and perseverance naturally. Born in Zambia to parents of Indian descent, he grew up in a British colonial environment where he was seen as neither white nor black.
Initially, the town in Zambia where he lived with his parents and three siblings did not have a school for Indian children. His father, a businessman, persuaded government officials to build a small schoolhouse. Patel says his father expected him to excel, telling him that if he wasn’t at the top of his class he shouldn’t bother coming home.
“He might have jokingly said it,” Patel says. “But I remember complaining to my mother that no matter what I did, I could not please him.”
Patel’s father helped build a Hindu temple and community center where Patel learned to speak Gujarati, the dialect of his father’s native state. As a boy, Patel also took note of his father’s negotiating skills. Once, a neighbor, a widowed mother, was facing bankruptcy and having to send her children to live with relatives overseas. Patel’s father renegotiated her debt, in part by explaining to creditors that they could either work with her and get partial repayment or drive her out of Zambia and get nothing. She and her children ended up staying.
At 12, Patel left home to attend the only high school for Indian children in Zambia, about 100 miles away from the family’s hometown. Educated under the British system, he earned degrees from Cambridge and the University of London before heading to India for medical school.
When Patel arrived in Tampa in 1982, the local Indian population was tiny, and his ethnicity was an issue for some patients. “Some people did not want to come and see me,” he says. “Some would make a racist remark but still stick with me.” Over time, he built up a patient base and developed the understanding of the health insurance business that enabled him to buy and grow WellCare, the source of his initial fortune.
To pull off the Clearwater project — his first major real estate development — Patel got Wyndham to take over one of the towers for a timeshare operation, leaving less risk for Patel and his lenders.
“I think he’s about the only person who could have gotten that deal done,” says Steve Cohn, a Tampabased banker who has worked with Patel for more than a decade. Most notably, he says, Patel was able to bring “different parties together to reach consensus” on a host of financial and regulatory matters.
“He’s a tough negotiator, but not a difficult negotiator,” says Cohn, a senior relationship manager at Bank of America. “He’s not going to let a large project fall by the wayside over a small negotiation point.”
Patel says challenge motivates him. “When somebody says it cannot be done, that’s the thing I want to do. I have to be different.”
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.”
Investments — and Policy
Kiran Patel also funds a slew of biotechnology and software startups and is investing heavily in U.S. hotels. He says he likes the steady income that hotels provide.
“One should always plan to preserve and expand,” Patel says. “If you can make money and use it for good causes, why not?” Last summer, Patel joined seven other local investors, including Tampa Bay Lightning owner Jeff Vinik and Washington Redskins part-owner Robert Rothman, to lend the Tampa Bay Times (which owns FLORIDA TREND) $1.5 million each, enabling the newspaper to refi nance higher-interest loans. The group’s $12-million loan, secured by Times property, pays 9% annual interest.
Patel works mostly from home, typically in a golf shirt, slacks and, in keeping with Indian custom, no shoes. He says he’s not slowing down after the Anthem deal. “I’ve not taken a day off. I’m continuing in the same rhythm and pace as before,” he says.
While Patel says he has no plans to build another health insurance company, he has strong opinions about U. S. health policy. In November, he was working to arrange a trip to Washington, D. C., to share his views with a bipartisan group in Congress on protecting uninsured patients from pricegouging and reducing uncompensated care.
“When you go to a hospital, there’s one price for Humana, another price for Aetna,” and the highest prices are charged to the uninsured, he says. “When the demand is outrageous, there’s no choice but bankruptcy.”
Patel says his solution is to require that uninsured patients be charged no more than the lowest insured prices for the same procedures. “It’s so simple that people will not accept it,” he says.
The Elementary School
In November, Patel pledged $2.5 million for a new early-learning center, gym and computers at Hillsborough County’s Shaw Elementary School. The school, which is in a low-income neighborhood, has a large percentage of students in the free or reduced price lunch program.
Patel says poor children should have the same chance for success as children who attend top-notch private schools. (Patel sent his children to Tampa’s Berkeley Preparatory School, a private pre-K-12 school where annual tuition costs more than $20,000.)
“Politicians, every political cycle, talk about doing something for the underprivileged,” he says. “But in the last 25-30 years, I have not seen a change. The situation more or less remains the same.”
The pledge was just the latest in a philanthropic record that has seen the Patels give more than $240 million over the years to support various causes in Florida.
Patel’s earliest philanthropic efforts focused on cultivating Indian culture in Tampa. In the late 1980s, he helped pay for a new Hindu temple and cultural center.
These days, Kiran and Pallavi Patel primarily give to education and health care initiatives in Florida, India and Zambia. In 2005, the couple raised more than $2 million to help rebuild an Indian village that had been destroyed by a tsunami. That same year, they gave $18.5 million to USF to establish the Patel Center for Global Solutions, a research center focused on solving developing-world problems in sustainable ways.
“They were less interested in building a think tank and much more interested in building a ‘do’ tank,” says Ralph Wilcox, provost and executive vice president at USF. “I probably have not met another couple who cares as much about improving the human condition around the world” as they do. In 2012, the Patels gave USF an additional $12 million to elevate the center to the Patel College of Global Sustainability.
Other recipients of the Patels’ generosity have included the Straz Center for the Performing Arts in Tampa, Florida Hospital Pepin Heart Institute and Florida Hospital Carrollwood, which recently got $5 million to expand its emergency department.
Patel also supports other entrepreneurs. He’s founding chairman of the Tampa chapter of TiE (The Indus Entrepreneurs), a non-profit that promotes entrepreneurship. In 2016, he gave TiE Tampa $1 million toward a new $2-million angel investment fund.
He declines to divulge his net worth or what percentage he gives to charity. “There are no set rules, except to earn and spend ethically,” he says.
A History of Giving
Dr. Kiran Patel and his wife, Dr. Pallavi Patel, have donated more than $240 million to support the arts, education and health care in Florida.
- 2000: $450,000 for a K-5 charter school at the University of South Florida
- 2002: $5 million for a conservatory at the Straz Center for the Performing Arts in Tampa
- 2005: $3 million for a heart research institute at Florida Hospital Tampa; $18.5 million for the Kiran C. Patel Center for Global Solutions at USF
- 2012: $12 million for an endowment to establish the Patel College of Global Sustainability at USF
- March 2017: $5 million for an emergency department expansion at Florida Hospital Carrollwood in Hillsborough County
- September 2017: $50 million to support Nova Southeastern University’s schools of osteopathic medicine and health care sciences and $150 million for a new regional Nova campus in Clearwater
- November 2017: $2.5 million for a new early-learning center, gym and computers at a public elementary school in an impoverished area of Tampa
- The couple’s philanthropy also extends to India and Zambia, where they have built charity hospitals and schools. In 2005, the Patels raised more than $2 million from people in the Tampa Bay area to rebuild an Indian village that had been destroyed by a tsunami.
- The Patels recently teamed with a foundation run by a Jamaica-born, Florida-based couple, Horace and Hillary Morgan, to provide eye surgeries for free in Jamaica. The Patels also are spending about $300,000 to upgrade a dental clinic and pharmacy in Jamaica.
Patel says his wife, Dr. Pallavi Patel, has been his “biggest supporter” in both business and philanthropy. Pallavi says she and Kiran are guided by the notion that they got where they are because of education.
The two met when both were starting medical school in Gujarat, India, Pallavi’s home and the birthplace of Kiran’s father. Out of a class of 100 students, all but five were from India; Kiran was the only one from Zambia.
“He didn’t know anybody, but he exuded confidence,” Pallavi says. “I was attracted to that, and we became almost instant friends.”
The two of them were born into different Hindu castes. Pallavi belonged to a merchant caste, Kiran to a farmer caste. It took a series of discussions before both families gave the couple permission to continue seeing each other.
“They were bold enough to transcend societal barriers,” Kiran says. “My father told me, ‘I can tolerate society’s comments of you two marrying, but don’t ever think of or bring me news of divorce.’ That would really tarnish the family name.”
Kiran ran for class representative during the first month of school, and to Pallavi’s surprise, he got elected. “He captured a lot of people’s attention,” she says.
In 1973, Kiran and Pallavi graduated, married and moved to Zambia, where they practiced medicine for several years before coming to the U.S.
Pallavi, who developed a successful pediatric practice in Tampa, has been actively involved in her husband’s philanthropic activities. “We feel that if we can help more people get an education, they can help us make the world a better place,” she says.
Kiran and Pallavi — their friends and family call them Dr. K and Dr. P — have lived in the same home in Tampa for more than 30 years but are now building a home that reflects both their heritage and wealth — a 68,000-sq.-ft. Indian-style estate on 17 acres, with separate homes for the Patels’ three children and their families, including six grandchildren. The complex includes a movie theater, Hindu temple, golf simulator room and 12-car garage. The Patels say their aim is to keep the family together for the next generation.
“All three children are settled in the Tampa Bay area,” says Pallavi, who retired from her pediatric practice in 2016. “We thought it would be wonderful to have everybody on one estate in their own spaces.”
The Patels’ son, Shilen, is CEO of HealthAxis Group, a health care technology-services firm in Tampa. Their older daughter, Sonali, is a family physician in Tampa. Younger daughter Sheetal is a radiologist with an MBA from USF. In recent years, she has gotten involved in the family’s hospitality and real estate holdings.
Like most families, the Patels aren’t always harmonious. Four years ago, Patel feuded with his brother-in-law Chetan Shah over efforts to bring the “Bollywood Oscars” to Tampa. Shah had been instrumental in persuading event organizers to choose Tampa as the host city, but when financial difficulties emerged, Patel took over and saw the event through to its end, triggering a series of lawsuits and counter-claims. Ultimately, the legal battle was settled out of court. Shah has since died of a heart attack.
Patel says his late brother-in-law believed, wrongly, “that if I can give charity to the world, why not him. I got dragged into the project, which was his dream, and the financial burden was put on me.”
Patel says he impressed upon his children that they were responsible for their own futures. Years ago, after he bought a Lamborghini sports car, his son, Shilen, then 8, asked if the family was rich. “I may be rich, but you are not,” Patel told him.
Patel says he began building the new home for his family only after “doing a lot of charity. First, I give to charity, then to myself. I don’t forget to use my net worth to impact the world positively.”
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