Mexico looks to expand retirement options to include assisted living and nursing home facilities

Submitted by mexbiznews on Tue, 09/15/2009 - 9:24pm

One uncertainty is whether children want their parents in Mexican facilities. (Jennifer S. Altman/The New York Times)

By Diane Lindquist / mexbiznews.com

Having already lured hundreds of thousands of American and Canadian retirees to Mexico, entrepreneurs now are focusing on a new segment of the aging market – those needing assisted living and nursing home facilities.

Only a handful of such projects exist in the country, but the increasing number of aging Baby Boomers has many convinced there surely will be a need.

By 2040, 100 million U.S., Canadian and Mexican residents – 12 million in Canada, 75 million in the United States and 6 million in Mexico – will have reached age 50, said Javier Godinez, director of a group formed last year to promote such businesses.

“It will take us some time, but this has the potential to be an important source of income in our country,” he said at a Mexico City gathering of the organization, the Mexican Association for Assisted Living, or AMAR.

Godinez cited a need for developers, architects, operators, nurses, medical providers and many others.

By 2040, he said, the country could attract 5 million retirees to 14,286 assisted living and nursing homes that would employ 1.2 million workers and attract $285.7 million in direct investment.

The cost of living in Mexican facilities, said Godinez, would be about $1,500 a month, less than half the U.S. average.

“We can contribute something that is very important for our country and for the 50-plus community in North America,” he said. “We have an historic opportunity to position Mexico for all aspects of retirement living.”

Assisted living and nursing home facilities, however, are a very different product than the clusters along the Pacific Ocean, the Gulf of Mexico, Lake Chapala, San Miguel Allende and elsewhere that have attracted more than a million foreign retirees to Mexico.

It is a specialized business, a health care, not a leisure, business, noted David Collins, chief executive of Active Living International.

In contrast to individuals who make their own decisions to retire in Mexico, he said, decisions involving the residents of assisted living and nursing home facilities are made by family members, for whom security and proximity are important considerations.

“It isn’t just persuading people to come live in the sun,” Collins said.

For this reason, some argued that facilities close to the U.S.-Mexican border, where they would mainly attract U.S. Latinos, have the greatest chance for success.

A few projects already have been developed in the interior, however. The Rancho Los Labradores complex in San Miguel Allende combines assisted living with retirement and second homes.

“With retirement facilities, it’s location, location, location,” said developer and operator Sergio Cazares. “It is different with this business. Entertainment, safety and price are the concerns, in that order.”

Federal, state and municipal are unfamiliar with such facilities, which made it difficult to gain the permits needed to develop his project, Cazares said.

Furthermore, while assisted living and nursing homes are highly regulated in the United States and Canada, they are not regulated at all in Mexico.

This is just one of the issues that AMAR is working on, Godinez said.

“We are lobbying with the federal, state and municipal governments to get the best regulations for this sector,” he said.

Organization leaders also are working with U.S. officials to make it possible for U.S. residents to be covered by Medicare and Medicaid and Medical. In addition, they are exploring establishing special training for assisted living and nursing home personnel.

“Everybody’s thinking this has a huge potential, but if they don’t understand it, it won’t provide a good life quality to users and won’t succeed,” Godinez said.