The Costs of Alzheimer's Disease

Contributed by: Dennis Fortier, President, Medical Care Corporation

With the intensity of current discussions on Healthcare reform, I am re-posting this earlier comment (from March 23) on the costs of AD and Dementia. The figures may surprise you.

March 23, 2009 - This week has seen extensive media coverage of a report from the National Alzheimer's Association stating that the annual costs of care for an Alzheimer's patient are triple the cost of an elderly person without Alzheimer's Disease. These figures are very consistent with a bevy of other studies indicating a similar cost differential but can viewed with more clarity from another perspective.

First, it is useful to compare the demented elderly vs. the non-demented elderly as opposed to Alzheimer's patients vs. non-Alzheimer's patients. This adds clarity because the driver of the cost increase is the presence of dementia, regardless of its cause (Alzheimer's is the cause of about 65%, vascular disease 20%, Parkinsons/Lewy Body and all others 15%).

Second, since these diseases cross all socio-economic strata, some of the afflicted pay for their own institutional care while others rely on public support programs. As such, aggregating figures that include the costs of institutionalization muddies the view.

Here are the figures comparing the costs of medical services (physician appointments, hospital stays, procedures, and medications) for demented vs. non-demented people aged 65-74:

Average Annual Cost of Non-Demented: $3,851
Average Annual Cost of Demented: $15,998

The demented are more costly by a factor of 4.2. However, it is very rare for an elder, demented person to be completely free of other chronic conditions. Chronic conditions require management via thorough and consistent self-care which is often difficult when coupled with dementia. As such, it is the combination of dementia and other chronic diseases that drives costs most impressively.

Consider these figures showing prevalence of four common chronic medical problems in the aged 65-74 population:

29% Coronary Heart Disease (CHD)
28% Congestive Heart Failure (CHF)
23% Diabetes
17% Chronic Obstructive Pulmonary Disease (COPD)

Now look at the costs associated with these medical problems when combined with dementia compared to the costs associated with those problems in cognitively vital elders:

Dementia +CHD - $27,237 ($10,894 no dementia)
Dementia + CHF - $34,304 ($17,993 no dementia)
Dementia + Diabetes - $24,392 ($7,469 no dementia)
Dementia + COPD - $28,463 ($12,059 no dementia)

It is clear that dementia drives higher utilization of medical services, especially when combined with other common medical problems. Of course, figures associated with the cost of institutionalized care (and informal care giving) make the picture all the more bleak but this view is perhaps the most clear.

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