Societal and Family Lifetime Cost of Dementia: Implications for Policy

Abstract

Objectives: To estimate the cost of dementia and the extra cost of caring for someone with dementia over the cost of caring for someone without dementia.

Design: We developed an evidence-based mathematical model to simulate disease progression for newly diagnosed individuals with dementia. Data-driven trajectories of cognition, function, and behavioral and psychological symptoms were used to model disease progression and predict costs. Using modeling, we evaluated lifetime and annual costs of individuals with dementia, compared costs of those with and without clinical features of dementia, and evaluated the effect of reducing functional decline or behavioral and psychological symptoms by 10% for 12 months (implemented when Mini-Mental State Examination score ≤21).

Setting: Mathematical model.

Participants: Representative simulated U.S. incident dementia cases.

Measurements: Value of informal care, out-of-pocket expenditures, Medicaid expenditures, and Medicare expenditures.

Results: From time of diagnosis (mean age 83), discounted total lifetime cost of care for a person with dementia was $321,780 (2015 dollars). Families incurred 70% of the total cost burden ($225,140), Medicaid accounted for 14% ($44,090), and Medicare accounted for 16% ($52,540). Costs for a person with dementia over a lifetime were $184,500 greater (86% incurred by families) than for someone without dementia. Total annual cost peaked at $89,000, and net cost peaked at $72,400. Reducing functional decline or behavioral and psychological symptoms by 10% resulted in $3,880 and $680 lower lifetime costs than natural disease progression.

Conclusion: Dementia substantially increases lifetime costs of care. Long-lasting, effective interventions are needed to support families because they incur the most dementia cost.

Keywords: dementia; dementia cost; family caregiving; institutionalization.

Figure 1. Distribution of Expected Total and Annual Cost

Panel A: Discounted average total and net lifetime cost of dementia by cost type. The value of informal caregiving is $19.71/hour. Out-of-pocket expenditures include those for medical care, long-term care facility, and formal caregiving. The length of the bar is equal to average lifetime expenditures. Net cost represents the difference in expenditures between dementia cases and counterfactual dementia free cases. Panel B: Discounted average annual net cost of dementia by cost type for an 83-year-old incident case (base-case). Annual costs are calculated for those conditional on surviving the entire year.