Medicare expenditures attributable to dementia

Abstract

Objective To estimate dementia's incremental cost to the traditional Medicare program. Data Sources Health and Retirement Study (HRS) survey‐linked Medicare part A and B claims from 1991 to 2012. Study Design We compared Medicare expenditures for 60 months following a claims‐based dementia diagnosis to those for a randomly selected, matched comparison group. Data Collection/Extraction Methods We used a cost estimator that accounts for differential survival between individuals with and without dementia and decomposes incremental costs into survival and cost intensity components. Principal Findings Dementia's five‐year incremental cost to the traditional Medicare program is approximately $15 700 per patient, nearly half of which is incurred in the first year after diagnosis. Shorter survival with dementia mitigates the incremental cost by about $2650. Increased costs for individuals with dementia were driven by more intensive use of Medicare part A covered services. The incremental cost of dementia was about $7850 higher for females than for males because of sex‐specific differential mortality associated with dementia. Conclusions Dementia's cost to the traditional Medicare program is significant. Interventions that target early identification of dementia and preventable inpatient and post‐acute care services could produce substantial savings.

2020 Alzheimer's disease facts and figures

“…Another group of researchers found that community‐dwelling individuals age 65 and older with Alzheimer's dementia had $1,101 (in 2012 dollars; $1,316 in 2019 dollars) higher annual out‐of‐pocket health care spending than individuals without Alzheimer's dementia, after controlling for differences in patient characteristics, with the largest portion of the difference being due to higher spending on home health care and prescription drugs 526 . Furthermore, individuals with Alzheimer's dementia spend 12% of their income on out‐of‐pocket health care services compared with 7% for individuals without Alzheimer's dementia 527 . Another research team found that the five‐year incremental cost of dementia was $15,704 (in 2017 dollars; $16,389 in 2019 dollars), with the additional costs of care in the first year after diagnosis representing 46% of the five‐year incremental costs 527 …”

“…Furthermore, individuals with Alzheimer's dementia spend 12% of their income on out‐of‐pocket health care services compared with 7% for individuals without Alzheimer's dementia 527 . Another research team found that the five‐year incremental cost of dementia was $15,704 (in 2017 dollars; $16,389 in 2019 dollars), with the additional costs of care in the first year after diagnosis representing 46% of the five‐year incremental costs 527 …”

“…Additionally, individuals diagnosed with cognitive impairment by a specialist had lower Medicare costs in the year after receiving a diagnosis of Alzheimer's dementia than those diagnosed by a non‐specialist. One research team found that health care costs were higher in each of the first four years after a dementia diagnosis, but were not significantly different in the fifth year after diagnosis 527 …”

“…530 In a study of inpatient hospitalizations of adults age 60 and older, those with Alzheimer's dementia were at 7% greater risk of dying during the hospital stay and stayed nearly a day longer than individuals without Alzheimer's dementia. 531 Several groups of researchers have found that both health care and prescription drug spending are significantly higher in the year prior to diagnosis, 537-539 2 years prior to diagnosis, 540 and one year after diagnosis, 527,537,538 compared with otherwise similar individuals not diagnosed with Alzheimer's or another dementia, although there are differences in the sources of increased spending. In one study, the largest differences were in inpatient and post-acute care, 538 while in another study the differences in spending were primarily due to outpatient care, home care and medical day services.…”

“…539 In a third study, the differences were due to home health care, skilled nursing care and durable medical equipment. 540 Additionally, three groups of researchers have found that spending in the year after diagnosis was higher than for individuals not diagnosed with the disease, by amounts ranging from $7,264 in 2017 dollars, based on individuals with fee-forservice Medicare coverage ($7,581 in 2019 dollars) 527 to $17,852 in additional costs in 2014 dollars, based on another group of individuals with Medicare fee-for-service coverage ($20,344 in 2019 dollars). 538 One group of researchers, however, found no difference in health care spending in the 2 years after diagnosis.…”