UPMC in a partnership with Beijing-based Wanda Group on Monday broke ground on one of five private hospitals that the health system will open in China, marking the beginning of what UPMC CEO Jeffrey Romoff said will be "the largest presence of American-style medicine outside the United States."

The strategic thinker's guide to partnerships and affiliations

Project details

UPMC in 2018 partnered with the Wanda Group for a $2 billion, 20-year project to open at least five hospitals in five major cities in China. The first hospital, called the Chengdu Wanda-UPMC International Hospital, is expected to open in Chengdu in 2022. Wanda Group is contributing $870 million toward the project, funding construction, operating cost, and management fees for all the hospitals. The other four UPMC hospitals do not have a construction date yet. Locations for those hospitals include Beijing and Shanghai.

UPMC will manage the facilities, but Wanda Group will also play a role in management, according to Chuck Bogosta, president of UPMC International.

UPMC said the move will establish new revenue streams that the health system can use to fund other operations, including domestic investments in Pennsylvania, according to Bogosta.

More health systems are gaining footing in China

China's health care system has changed substantially in recent decades, according to Trib Live.

The country in recent years has shifted from having a mostly government-run, public hospital system to being decentralized, making the system more open to foreign and private investment. Now, private companies are seeing an opening to invest in China's "overburdened" and "understaffed" public hospital system, Trib Live reports.

Other systems that have recently expanded in China include Cleveland Clinic and ProMedica.

But U.S. health systems that have tried to develop private hospitals in the country have faced barriers, in part due to China's highly regulated environment, according to Modern Healthcare. In addition, health systems have faced resistance from physicians who do not want to leave public hospitals to work at a private facility.

UPMC, which has had other projects in China over the last eight years, is confident this venture will be successful. "No one has actually been successful in importing a truly American or Western style of medicine into China at the scale in which we are proposing here or planning to go forward with," Bogosta said (Lindstrom, Trib Live, 10/28; Bannow, Modern Healthcare, 10/28).