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Monetary Costs of Dementia in the United States

Posted Apr 04 2013 10:33am
The monetary cost of dementia in the United States ranges from $157 billion to $215 billion annually, making the disease more costly to the nation than either heart disease or cancer, according to a new RAND Corporation study.

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The greatest economic cost of dementia is associated with providing institutional and home-based long-term care rather than medical services, according to the findings published in the April 4 edition of the New England Journal of Medicine .

The study, funded by the National Institute on Aging, is the most-detailed examination done in recent decades on the costs of dementia.

The prevalence of dementia increases strongly with age and the analysis suggests that the costs of dementia could more than double by 2040 if the age-specific prevalence rate of the disease remains constant as the nation's population continues to grow older.
“The economic burden of caring for people in the United States with dementia is large and growing larger,” said Michael Hurd, the study's lead author and a senior economist at RAND, a nonprofit research organization. “Our findings underscore the urgency of recent federal efforts to develop a coordinated plan to address the growing impact of dementia on American society.”

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The GIST
Dementia affects a large and growing number of older adults in the United States. The monetary costs attributable to dementia are likely to be similarly large and to continue to increase.

The METHODS
In a subsample (856 persons) of the population in the Health and Retirement Study (HRS), a nationally representative longitudinal study of older adults, the diagnosis of dementia was determined with the use of a detailed in-home cognitive assessment that was 3 to 4 hours in duration and a review by an expert panel.

We then imputed cognitive status to the full HRS sample (10,903 persons, 31,936 person-years) on the basis of measures of cognitive and functional status available for all HRS respondents, thereby identifying persons in the larger sample with a high probability of dementia.

The market costs associated with care for persons with dementia were determined on the basis of self-reported out-of-pocket spending and the utilization of nursing home care; Medicare claims data were used to identify costs paid by Medicare.

Hours of informal (unpaid) care were valued either as the cost of equivalent formal (paid) care or as the estimated wages forgone by informal caregivers.

The RESULTS
The estimated prevalence of dementia among persons older than 70 years of age in the United States in 2010 was 14.7%. 

The yearly monetary cost per person that was attributable to dementia was either $56,290 (95% confidence interval [CI], $42,746 to $69,834) or $41,689 (95% CI, $31,017 to $52,362), depending on the method used to value informal care.

These individual costs suggest that the total monetary cost of dementia in 2010 was between $157 billion and $215 billion. Medicare paid approximately $11 billion of this cost.

CONCLUSIONS
Dementia represents a substantial financial burden on society, one that is similar to the financial burden of heart disease and cancer. (Funded by the National Institute on Aging.)
“There are no signs that the costs of dementia will decrease given that the nation will have a larger number of 85-year-olds in the future than we do today,” Hurd said. “Unless there is some sort of medical breakthrough, these costs will continue to rise.”
Other authors of the study are Francisco Martorell, Adeline Delavande and Kathleen J. Mullen of RAND and Kenneth M. Langa of the University of Michigan.

Source: The New England Journal of Medicine, http://www.nejm.org/doi/full/10.1056/NEJMsa1204629

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