NCPA - National Center for Policy Analysis

Dementia Tops Cancer, Heart Disease in Cost

April 9, 2013

The biggest cost of Alzheimer's and other types of dementia isn't drugs or other medical treatments, but the care that's needed just to get mentally impaired people through daily life, according to a new RAND Corp. study, says Fox News.

It also gives what experts say is the most reliable estimate for how many Americans have dementia -- around 4.1 million. That's less than the widely cited 5.2 million estimate from the Alzheimer's Association, which comes from a study that included people with less severe impairment.

  • Dementia's direct costs, from medicines to nursing homes, are $109 billion a year in 2010 dollars, the new RAND report found.
  • That compares to $102 billion for heart disease and $77 billion for cancer.
  • Informal care by family members and others pushes dementia's total even higher, depending on how that care and lost wages are valued.

Alzheimer's is the most common form of dementia and the sixth leading cause of death in the United States. Dementia also can result from a stroke or other diseases. It is rapidly growing in prevalence as the population ages. Current treatments only temporarily ease symptoms and don't slow the disease.

For the new study, researchers started with about 11,000 people in a long-running government health survey of a nationally representative sample of the population. They gave 856 of these people extensive tests to determine how many had dementia, and projected that to the larger group to determine a prevalence rate -- nearly 15 percent of people over age 70.

Using Medicare and other records, they tallied the cost of purchased care -- nursing homes, medicines, other treatments -- including out-of-pocket expenses for dementia in 2010. Next, they subtracted spending for other health conditions such as high blood pressure, diabetes or depression so they could isolate the true cost of dementia alone. Even with that adjustment, dementia topped heart disease and cancer in cost.

Finally, researchers factored in unpaid care using two different ways to estimate its value -- forgone wages for caregivers and what the care would have cost if bought from a provider such as a home health aide. That gave a total annual cost of $41,000 to $56,000 per year for each dementia case, depending on which valuation method was used.

Source: Marilynn Marchione, "Study: Dementia Tops Cancer, Heart Disease in Cost," Fox News, April 4, 2013. Michael D. Hurd et al., "Monetary Costs of Dementia in the United States," RAND Corp., April 2013.


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