Among the major causes of death in the United States, the top two account together for about 46% of the total. They are heart disease (number one) and cancer (a close second). One might reasonably assume that, due to their prevalence and high treatment costs, one or the other of these conditions would account for higher health care costs than other less common causes of death. But one would be wrong, according to an October, 2015 study published in the Annals of internal Medicine. That distinction goes to number six on the list—Alzheimer’s disease, or more accurately dementia in general.
The study, entitled The Burden of Health Care Costs for Patients with Dementia in the Last Five Years of Life, looked at a retrospective cohort of Medicare fee-for-service beneficiaries, aged 70 or older, who died between 2005 and 2010. The study population of 1702 seniors was divided into four groups: those with a high probability of dementia or those who died due to cancer, heart disease or other causes. The researchers measured, for the last five years of life, the total care costs including Medicare, Medicaid, private insurance, out-of-pocket spending and informal care. They also looked at out-of-pocket spending as a proportion of household wealth.
The study found that the average cost per person with dementia, at $287,038, was higher than that of any other group. The average cost in the heart disease group was $175,136, in the cancer group $173,383 and in the group dying of other causes $197,286. The differences were statistically significant to a high degree of reliability.
Taking out-of-pocket spending alone, the average amount per decedent in the dementia group was $61,522, fully 81% higher than for the groups without dementia. Informal care (i.e. unpaid care by family members and others) followed a similar pattern. However, Medicare expenditures were similar across all the groups. In other words, the difference in costs between the dementia group and the others was largely due to uncovered out-of-pocket expenditures by families.
These expenditures in the dementia group represented 32% of wealth measured five years before death, compared with 11% for the non-dementia groups. For black persons, those with less than a high school education and unmarried or widowed women, the percentages were even higher.
The researchers’ conclusion: “Health care expenditures among persons with dementia were substantially larger than those for other diseases, and many of the expenses were uncovered (uninsured). This places a large financial burden on families, and theses burdens are particularly pronounced among the demographic groups that are least prepared for financial risk.”
To anyone caring for a loved one with dementia, the findings will not be surprising. Medicare and commercial health insurers mainly pay for discrete medical costs like office visits, hospitalizations, surgeries and medications. These are the kinds of expenses typically incurred by patients with cancer or heart disease. But people with dementia require a much higher amount of basic care like help with safety monitoring, bathing, dressing, meal preparation and the like—sometimes for years on end. These are services for which health insurance does not pay. Many families are left with the discouraging prospect of spending down all the patient’s financial resources until he or she is impoverished enough to qualify for Medicaid.
Even when sick enough to require a nursing home, health insurance does not kick in until a patient’s savings are exhausted. It’s no wonder that for over 63% of nursing home residents, Medicaid is footing the bill.
According to the Alzheimer’s Association, an estimated 5.3 million people have Alzheimer’s disease presently. That number is projected to grow to about 13.8 million by 2050, an increase of 260%. If one adds in other causes of dementia, the numbers are even higher. In the absence of a cure or of public policies aimed at alleviating the economic impact on patients’ families, the future for such families looks dire.