The Dollars for Dementia Add Up Fast

Dementia healthcare costs may outstrip heart disease and cancer costs

/ Author:  / Reviewed by: Robert Carlson, M.D

(RxWiki News) No one on Earth is getting any younger. And with age comes the higher health costs associated with a range of health conditions. Top among them may be dementia.

A recent study found that the healthcare costs associated with dementia are keeping pace, and may even have exceeded, the costs related to heart disease and cancer.

The researchers estimated that these costs will continue to climb as the substantial Baby Boomer generation lives longer than any previous generation.

"Discuss long-term care options with your doctor."

The study, led by Michael D. Hurd, PhD, of the RAND Corporation in Santa Monica, California, looked at the costs of dementia in terms of health care and caregiving.

The researchers used information from a long-term study group called the Health and Retirement Study, which includes data on 10,903 individuals over about three years.

The researchers focused specifically on a subgroup of 856 study participants by conducting in-home assessments, which lasted about three to four hours, to determine the participants' cognitive functioning.

They used their findings from this smaller group to estimate that approximately 14.7 percent of US adults aged 70 and older have dementia.

Then the researchers estimated the total costs for each person with dementia, taking into account both out-of-pocket spending reported by the participants and the costs associated with nursing home care. The researchers also used Medicare data to confirm costs paid by Medicare.

The researchers estimated that it costs approximately $41,689 to $56,290 per year to care for a person with dementia. Multiplying this by the number of individuals with dementia in the US, the researchers estimated that approximately $157 billion to $215 billion was spent in 2010 on caring for patients with dementia.

These cost estimates include both care purchased formally in the healthcare market and informal care. Of this total cost, approximately $11 billion was paid by Medicare.

The researchers concluded that "dementia represents a substantial financial burden on society, one that is similar to the financial burden of heart disease and cancer."

About $109 billion was spent directly in the healthcare market for dementia-related costs in 2010 (excluding costs for informal care), the researchers reported. Meanwhile, the costs for heart disease were $102 billion and for cancer were $77 billion in 2010, the National Institutes of Health estimated.

Meanwhile, the researchers noted, these costs are likely to increase as today's Baby Boomer generation continues to age. The number of Americans aged 65 and older is expected to double to 72 million over the next two decades, according to the US Census Bureau.

"Dementia costs currently rival those of cancer and heart disease. But, within 30 years, dementia may be in a league of its own," said Richard M. Suzman, PhD, director of the National Institute of Aging's Division of Social and Behavioral Research, in a prepared statement released by the National Institutes of Health.

"Unless effective interventions are found to treat Alzheimer's, formal long-term dementia care costs will escalate for the baby boom generation, as they have fewer children available to provide unpaid, informal care," Dr. Suzman said.

One strength of the study is that it was not limited only to spending in the healthcare market since it also took into consideration informal out-of-pocket costs.

"This study provides a nice example of the importance of considering the indirect and non-medical costs of medical conditions," said Adam C. Powell, PhD, a health economist and dailyRx expert.

"The amount of money that Medicare paid for the management of dementia was just a small fraction of the overall cost paid by society."

Dr. Powell noted that the study did not look at the efficiency of managing the condition, so it's difficult to judge whether this amount of spending is appropriate, too much or too little.

"In some cases, it may be cost saving to increase medical expenditures if doing so decreases societal expenditures," Dr. Powell said.

The study was published April 4 in the New England Journal of Medicine. The research was funded by the National Institute on Aging.

Reviewed by: 
Review Date: 
April 2, 2013
Last Updated:
April 4, 2013