City Economic Development Director Roland Miller said the investors from Beijing-based Guo Tou Sheng Tong Investment Co. LTD met with Maine-based financiers and planners Tuesday and Wednesday before flying out of Portland's Jetport.
"There are many things that need to be accomplished, especially in the next three months," Miller said. "Which means it will involve very intensive activity over the next three months — getting things in place and finding the proper consultants. Just the financing structure on this alone will be very complicated."
The investors group, led by chairwoman Shi Qi, announced its plans July 31 to renovate the building most recently known as The Barn into a five-star medical tourism destination for wealthy Chinese patients.
The Minot Avenue facility would be open in about two years, according to plans, bringing as many as 5,000 Chinese visitors its first year.
Shi Qi also signed a letter of understanding with Age Doctor Group, a Chinese medical referral company that will send patients to the Maine facility. The Age Doctor Group specializes in anti-aging treatments.
Last week, members of Shi Qi's group said they planned to return to the Twin Cities in October with more investors to look at the property, with plans to use the former S Goff Street police station as an office.
"Site control over the police station is one element that I feel is very important to the future of the project," Miller said. "I made that point early on, and when they came in this time they said it is one of the first things they wanted to talk about."
Miller said the group has submitted a proposal to buy the station for a negotiated price that will have to be reviewed by the City Council.
"The timing for that presentation depends on the investor group," Miller said. "That timing has not been set, although the purchase and sales proposal has been brought forward."
Miller said the designs for the facility will also determine what happens with S Goff Street.
Miller said last week that the plan could call for extending the road through the Edward Little Franklin Woods/Snake Trail area between Edward Little High School and Minot Avenue, connecting to Elm Street.
"That will be coordinated with designers for the project to make sure that any improvements are functional, accessible and will do what they need as far as accessing their site," Miller said.
Chinese medical tourism facility eyed for former Auburn shoe shop
AUBURN — Wealthy Chinese citizens will shuttle in and out of L-A to receive medical treatment unavailable in their homeland and recuperate in a former shoe shop converted to a $30 million to $40 million luxury residence, officials said.
The Chinese investors in the project intend to capitalize on China's growing wealth, aging populace and the superior American health care system by turning the dilapidated brick factory on Minot Avenue, now called The Barn, into a posh residence.
The Shengtong Group in Beijing will convert the former Lunn and Sweet shoe factory building at 67 Minot Ave., and surrounding property, into a state-of-the-art health and wellness hotel aligned with Central Maine Medical Center in Lewiston.
The group completed the purchase of the 67 and 81 Minot Ave. buildings earlier this month through Miracle Enterprises, their Maine company.
Michelle Xu, director of overseas investments for the group, and other members spoke to the Sun Journal on Thursday.
Xu, translating for Chairwoman Shi Qi, said the operation will be a medical tourism center, the first overseas project of its kind for the group. They are working on a similar project in Germany and mulling future projects in the U.S.
"When we first came to Auburn, we fell in love, head over tail, with the people here, the fresh air, clean water, clean food," she said. "It definitely works from a tourism angle and the site itself meets the needs we have. It is transformable into a medical center with a tourism angle."
The operation would cater to active, wealthy Chinese retirees, or soon-to-be retired seniors, and financially stable middle-aged people. It would combinemedical treatment — both American and traditional Chinese — with traditional tourism, according to Auburn Economic Development Director Roland Miller.
"What has happened, according to this investment group, is that a very large segment of the Chinese population, that is now very wealthy and can move anywhere in the world, wants to have their health care provided external to the Chinese system," Miller said. "They are traveling for health care services and they want to come to the U.S."
Miller said the group plans to invest up to $40 million in the building and surroundings. The site is now valued at about $1 million, he said.
"They want to develop that building into a five-star, full-service, everything-first-class hotel for these clients," he said. "These clients travel the world and they know first class and that's what they want."
Miller said partnership members hope to leverage the federal EB-5 visa program to generate investment. That program grants green cards to foreign investors who commit up to $1 million to domestic U.S. projects.
Miller said the investors began looking at metropolitan areas around the United States earlier this year, settling on Maine and Lewiston-Auburn in the spring.
"They came here, they love it here and they think it's a beautiful, gorgeous area," Miller said. "They think they can market it and their investment team already has people on a waiting list."
Partner Fei Miao of Sabattus said he was treated for lymphatic cancer at CMMC and was impressed. Through translator Xu, he said he recommended the hospital and the community to Shi Qi and the other investors.
"And then she did a lot of homework on the hospital, and that they have many specialists for everything and that it's a very well-rounded facility," Xu said. "That is how we started the discussion with the city."
The group visited Auburn in April to look at the site and meet with city and hospital officials. They included Shi Qi and her assistant and translator, Eddie Yu.
In May, Miller introduced group members to leaders at Central Maine Healthcare, the parent organization of CMMC. Soon after, the hospital system agreed in writing to work with the Chinese investors and incoming Chinese patients seeking medical care.
In an interview with the Sun Journal on Thursday, Central Maine Healthcare CEO Peter Chalke called the project "pretty unique" and said, "It took a while for this to sink in."
It's unclear how many Chinese patients will use CMMC or how much care they will need. However, medical tourism is popular with major hospitals across the United States because even a few foreign patients can bring in a lot of money. They typically pay cash and don't haggle on price.
Chalke said The Barn project could offer a lot of positives: jobs in the community, a cultural exchange for Lewiston-Auburn and medical care for people who need it, as well as money and new relationships for the hospital.
"I don't see any downsides," he said.
Yu returned to Lewiston-Auburn on July 17 to meet with Auburn city councilors in a closed-door executive session July 20.
Shi Qi and a larger group of investors, including Chinese doctors, returned to Maine last weekend. They met with state officials Tuesday morning and reviewed the site from the air Tuesday afternoon.
A news conference on the project is scheduled for 9:30 a.m. Friday in the City Council chambers on the second floor of Auburn Hall and should include city and state officials, as well as members of the investment group, designers and aligned groups.
Xu said the investment group is scheduled to sign an agreement with a Chinese medical referral group, Age Doctor Group, during the news conference.
"They are the largest promoter and marketer of medical services in China," Xu said. "They have the largest clientele network in the country and we will be able to leverage their client network."
There are no design plans yet, Miller said. According to an early design draft of the project, the building would house up to 200 independent dwelling units of about 663 square feet and another 50 with dedicated nursing.
"Keep in mind that this is a sort of prototype structure they created to give us a feeling for how it could work," Miller said.
The group has contracted with Los Angeles-based Architect Taschen Lee ofTaylor Design for the renovation.
Patients would be treated at CMMC, 1.3 miles away, and would use the Minot Avenue building to recuperate.
Plans call for developing the 3.4 acres along the west side of Minot Avenue just south of Court Street and the Union Street Bypass, as well as surrounding properties.
The city owns the 1.2-acre parcel just north of the development, which is the former Auburn police station. That building would become the office for the project during the two-year development.
Miller said two city-owned parcels to the south could become part of the project as well. That would include the 0.4-acre 87 Minot Ave. lot and the 0.1-acre lot at the foot of the Edward Little-Franklin Woods/Snake Trail that connects Minot Avenue with Edward Little High School.
Medical tourism in Auburn, Maine: What exactly is it?
Expert says wealthy patients come for better care, support services, amenities.In Maine, most people probably think of medical tourism as a thing Americans do to save money.
Costa Rica for discount dental work. A flight to Barbados for low-cost fertility treatments.
But while the U.S. Centers for Disease Control estimates that 750,000 Americans travel abroad for medical care every year, experts believe about 1 million people come to the United States.
They're not looking for cheap. They're looking for the best.
"Most of the patients coming into the United States, No. 1, are affluent and can afford to pay the price of our very, very high-priced health care because most of those patients are self-pay," said Josef Woodman, founder of Patients Beyond Borders, a website and book series that advises patients about medical tourism.
"They're (paying) out of pocket," he said. "And they're traveling for complex procedures, either for them or for their loved one, including their kids."
Although patients come to the U.S. from all over the world, they most often come from regions where medical care isn't great or the wait for care is long — China, India, Russia, the Middle East and Africa, in particular.
Travelers often seek cancer treatment, cardiology care, neurosurgery, orthopedic surgery or help for their children.
"Pediatrics is huge," Woodman said. "Almost any academic pediatric hospital in the country does a good bit of international business. If you go to, for example, Texas Children's (Hospital's website), they have an international page."
Patients like traveling to the U.S. because they can get immediate, high-quality, cutting-edge care that isn't available at home.
Hospitals like caring for medical tourists because they're lucrative. Very lucrative.
"Nobody's looking to the United States to save a buck," Woodman said.
Partners HealthCare is a nonprofit health care group that includes Massachusetts General Hospital, Brigham and Women's Hospital and other medical centers in and around Boston. It sees an estimated 6,000 international patients per year — less than half a percent of all of its patients — but the hospital group maintains international patient centers within its two largest hospitals and has created a special division to serve foreign patients and attract more.
"That's a small population, but it tends to have disproportionate financial potential for hospitals," said Ed McCarthy, Partners' vice president for international business. "These patients, for the most part, tend to pay a higher percentage of the charges than local patients. Local patients are usually insured and their insurance companies negotiate discounts and special rates with hospitals."
Although some foreign patients have health insurance, most don't. They — or, sometimes, their governments — pay cash with little-to-no haggling on price. Even when hospitals offer 25 or 35 percent discounts, serving foreign patients is still extremely profitable. A single patient can pay tens of thousands of dollars, depending on the treatment.
With that in mind, large hospitals are increasingly creating international patient departments, forming relationships with "concierge medical tourism" groups to get referrals, and branding themselves — and advertising — as the best places for foreigners to get health care.
In Rochester, Minn., the Mayo Clinic has become one of the best at wooing medical tourists, both from within the U.S. and from other countries. It's gotten so good that The Boston Globe recently ran a feature about it.
About 40 percent of the 400,000 patients seen at Mayo's main Minnesota campus each year live at least 500 miles away, and 8,500 live in other countries, according to the story. That means about 2 percent of their patient population comes from outside the U.S., compared to less than half a percent at Partners.
Woodman said successful hospitals have the basics down when it comes to foreign patients: interpreters, familiar foods, cultural sensitivity. They also have a stellar medical reputation, are easy to get to and, often, have cultural or medical relationships with the sending country. (South Florida, with its Hispanic culture, draws a lot of patients from Spanish-speaking countries, for example.)
But there's "tourism" in medical tourism, too. Location matters to patients. Hotels matter. Restaurants, shopping and activities all matter.
"If you're a patient from somewhere else and you have a choice between going there or New York or London or Los Angeles or Boston or Dubai, you're competing not just on medical care, you're competing on the entire pluses and minuses of that city," Woodman said. "Let's put it this way: If you can convince a lot of people to come to Rochester, Minn., especially in the wintertime, you're doing something right."
The Mayo Clinic and the state of Minnesota seem to agree. In 2013, Minnesota passed a "destination medical center" law that gave a half-billion dollars in state tax breaks to a $6 billion expansion project designed to make the Mayo Clinic and Rochester a complete global medical destination.
Woodman sees medical tourism growing 15 to 20 percent per year worldwide in the coming years as people in developing countries get richer and more cutting-edge treatments become available.
Long term — in 30 or so years, as more countries develop good medical care — he predicts medical tourism will decline. Mostly.
"There's always going to be travel for star doctors, for access to certain types of treatments, for experimental treatments. And for value," he said.