The Societal and Family Lifetime Cost of Dementia

Abstract

Dementia is a complex terminal disease that involves cognitive and functional declines and behavioral/psychological symptoms. Currently >5 million Americans suffer from dementia. The societal economic burden of dementia consists of different types of costs (value of informal care, out-of-pocket expenditures, Medicaid long-term care expenditures, and Medicare expenditures), and several payers (family, Medicaid, and Medicare) shoulder different amounts of the economic responsibility. To facilitate comprehensive planning at the family, state, and federal levels, policymakers must understand who incurs dementia costs over the course of the disease. The objective of this study was to estimate the lifetime and annual cost of dementia care (value of informal care, out-of-pocket expenditures, Medicaid long-term care expenditures, and Medicare expenditures), and the extra cost of caring for someone with dementia compared to someone who did not exhibit dementia clinical features (net cost). To estimate total and net lifetime and annual costs we developed an evidence-based mathematical model to simulate disease progression for newly diagnosed individuals with dementia. Data driven trajectories of three clinical features -cognition, function, and behavioral/psychological symptoms- were used to model disease severity. Personal characteristics, clinical features, place of residence, and dual enrollment status were used to estimate cost. Counterfactual analysis was conducted to compare costs between those who did and did not exhibit clinical features (net cost). From time of diagnosis (mean age of 83 years), discounted total cost of care for a person with dementia was $322,900. Families incurred 72% of the total cost burden ($144,160 for informal caregiving and $88,780 out-of-pocket payments). Medicaid accounted for 12% ($37,390) and Medicare accounted for 16% ($52,540) of total cost, respectively. In counterfactual analysis, net cumulative costs for a person with dementia were $194,890 greater over a lifetime than someone without dementia (85% of net cost incurred by families). Our model extends previous studies by considering costs over the life course of the disease. We found that dementia results in $194,890 additional total care costs over an individual’s lifetime. The extra cost associated with dementia is primarily borne by families (versus Medicare or Medicaid) due to time spent providing informal care and out-of-pocket expenditures.