Economics of Dementia

Julie Bynum, MD MPH

December 7, 2010
 Disease Specific Costs
• Why Discuss them?
Stella Marr’s postcard

Alzheimer’s Research Trust, 2010

To Lobby for More Research Funding

Understand what needs to be done for
better outcomes in the future
(or at least as good)
Canary in a coal mine
 Medicare Part A (Health Insurance)
Trust Fund Balance, 2001-2018
Under High Cost, Low Cost, and Intermediate Assumptions
Fund balance as % of
annual expenditures:

Actual Projected

Low cost

Intermediate

High cost

NOTE: The Medicare Trustees recommend that the HI Trust Fund assets should be maintained at a level of at least 100% of annual
expenditures.
SOURCE: Kaiser Family Foundation based on 2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance
and Federal Supplementary Medical Insurance Trust Funds.
 Bottom Line
Direct Dementia Care Costs are three times
the Cost of Other Chronic Illnesses.

We currently deliver care in an expensive

way that might be less costly and better
quality in a different model.
 How are dementia
costs different from
other diseases?

Alzheimer’s Research Trust, 2010

 EXAMPLES

Medical
Health Psychiatric & Behavioral

Supervision
Social Safe housing
Functional Supports (eating, dressing etc)

Informal Spousal support

Care Unpaid caregiving

Productivity Reduced hours due to informal care giving

loss “Sandwich Generation”
Distribution of costs
is different in
dementia from
other diseases.
 Direct Costs
Who are the stakeholders?
Alt. (Who pays the bills?)
 Local Care System
Community

HOSPITAL Nursing home

Assisted Living
 Local Care System
Community

HHA
HOSPITAL SNF Nursing home

Clinic Assisted Living

 Transitions
Community

HOSPITAL Nursing home

Assisted Living

Funding Transitions

Assisted Living HOSPITAL Nursing home

Private Pay Medicare Medicare SNF Private Pay Medicaid
 Expenditures
Community vs. Institution in Dementia

Bynum, Unadjusted Data MCBS 2004

Expenditures Compared to Other Diseases

Bynum, Unadjusted Data MCBS 2004

Difficulty Comparing Costs to Other Diseases

Bynum, Unadjusted Data MCBS 2004

• Avg. 4 chronic conditions compared to 1 without dementia.

Bynum JAGS 2004
 Hospitalization
In Medicare approximately 50% of costs are for hospital care.

Bynum JAGS 2004

 Ask ourselves why?
• Behavioral issues/psychiatric admissions
• Inability to self manage chronic disease
• Caregiver stress and burnout
• Clinician uncertainties about diagnosis and
management
Biopsychosocial Model of Health

Psychological Social

Physical

Engel, 1977
Biopsychosocial Model of Costs for
the Dementia Patient

Psychological Social

Physical
Consider how costs might be different
in the future

Current
How Much Does Social Care Cost?
2010 Median Annual Rate for the US

Nursing home (private rm): $75,190

Nursing home (semi-private rm): $67,525
Assisted Living (1Br-single): $38,220
Home Health Aide: $43,472
Home Maker Services: $41,184
Adult Day Care: $15,600

Genworth Report 2010

What if we delayed progression of disease?

• Delay progression reduces number in late

stage of disease with high social and
informal care costs
• Cost argument current medications
Acetyl Cholinesterase Inhibitors and
Controversies
 What if we delayed onset of disease?

• By 2050, estimates number of cases 4x

higher based on current incidence rates
• If disease onset could be delayed, how
much would be saved after 10 yrs?
◦ 1-yr: save $10 Billion annually
◦ 6-mo: save $4.7 Billion annually

Brookmeyer, AJPH 1998

What if we did non-medical care
differently?
 A Family Intervention to Delay Nursing Home
Placement of Patients with Alzheimer’s Disease: A
Randomized Controlled Trial
Mittelman MS et al. JAMA 1996;276:1725.

Sample: Referred, volunteer 206 spouse-caregivers of AD pts living

at home with > 1 relative in area
Intervention enrolled over 3.5 yrs:
1. Indiv. & Family counseling: task oriented, teaching techniques
for problem solving, improve communication and support of
primary caregiver
2. Caregivers joined a support group (any)
3. 24 hr available counselor for crises or questions
F/u up to 8 years
Funding: NIMH
Results: Delay of Institutionalization
329 Days

Mittelman MS et al. JAMA 276:1725-1731, 1996

 Interventions Studied to Delay Nursing Home
Placement in People with Alzheimer’s Disease

Spouse-Caregiver Intervention Drug Study: Donepezil

Delay Placement by 329 Days No Effect on Nursing Home

Mittelman MS et al. JAMA 276:1725-1731, 1996 AD2000 Collaborative Group Lancet 2004;363:2105-15.
 Costs of Two Interventions
(Estimates since no published data)

Caregiver Intervention Drug Intervention

• 2.4 FTE counselor with • Donepezil $1560/pt/yr
85pt caseload
• Salary 35-45K/yr inflated
for benefits
• $1280-1600/patient/yr
Added cost
• 329 days in Nursing
Home = $43,428/pt
 Where Do People With
Alzheimer’s Disease Live?

Home/AL NH
70% 30%

Source: Alzheimer’s Association, 2004

“Not everything that counts can be counted, and
not everything that can be counted counts.”
Albert Einstein