Foreign Investors Putting Money Into Drug Rehabilitation and Psychiatric Clinics

A growing number of foreign investors are putting their money into drug rehabilitation and psychiatric clinics, according to The Boston Globe. The investments are being made under the EB-5 program, which lets foreigners who invest at least $500,000 in a development that creates jobs qualify for an America visa.

A 104-bed behavioral health and substance abuse center in Devens, Massachusetts, is being partly financed with $10 million from foreign investors through the EB-5 program, the article notes. Recovery Centers of America, which plans to open eight inpatient facilities on the East Coast, is soliciting foreign investors. An addiction clinic in Baltimore opened earlier this year with funding from the EB-5 program.

The business of addiction treatment is attracting a growing number of private equity investors. The treatment business is estimated to be worth $35 billion.

“Everybody is chasing the pot of gold at the end of the rainbow of the opioid issue,” said Philip Levendusky, the Director of Psychology at McLean Hospital, an affiliate of Harvard Medical School. “There’s an epidemic of opioid abuse, so there’s a tremendous demand.”

The most common investments under the EB-5 program are condominiums and hotels. Critics of the program say it is a way for wealthy foreigners to get through the U.S. immigration process more quickly. They also say the lack of oversight makes the program vulnerable to fraud.