Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies Hearing
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Testimony by
Chairman Harkin, Ranking Member Moran, and Members of the Subcommittee, thank you for the opportunity to testify before you today about the monetary costs of dementia in
Introduction: Dementia and Its Costs
Dementia, a chronic disease of aging characterized by progressive cognitive decline that interferes with independent functioning, affects a large and growing number of older adults. The National Alzheimer's Project Act seeks to improve the ability of the federal government to track monetary costs incurred by individuals and public programs, such as
Our goal in this research was to estimate the monetary costs due to dementia, not the monetary costs of people with dementia. Accurately identifying the costs attributable to dementia is challenging for many reasons but two stand out: First, persons with dementia are likely to have co-existing health problems: insulating the costs attributable to dementia requires that they be separated from other concurrent health care costs. Second, informal caregiving, the unpaid care provided by family and friends for assistance with activities of daily living, is an important component of the support required by persons with dementia, yet it is unclear how to attribute a monetary cost to an informal caregiver's time.
Data Available for Estimation
The complexities of the research made it difficult to find valid and reliable data that were adequate for our needs. Fortunately the
We assessed several categories of health-care spending: out-of-pocket spending, spending by
Individual Prevalence and Costs of Dementia
Overall, we found 14.7 percent of the population 71 years of age or older had dementia in 2010. Nonwhite, female, single, less-educated, and lower-income persons have an elevated probability of dementia, as do persons with a history of stroke, heart disease, or psychiatric conditions. Those who did not graduate from high school were more than twice as likely as those who graduated from college to have dementia, and those with household income of less than
We distinguish between costs that flow through the marketplace such as spending for hospital stays, doctor visits, nursing homes, hired caregiving at home and so forth, and implicit additional costs that are due to informal care and result from caregivers withdrawing from the labor market. We found that persons with dementia had
We were not able to distinguish costs due to Alzheimer's disease from costs due to other types of dementia, but we know from other research that Alzheimer's disease is responsible for a large majority of dementia cases.
Adding the cost of informal care to the cost of market-based care increases the total annual costs due to dementia to
Population-wide Costs and Projections
To estimate the total cost of dementia to the U.S. economy now and in the future, we combined the adjusted cost per person with dementia with prevalence rates from the
Because of the aging of the population, the fraction of the population at advanced old age where the risk of dementia is greatest will increase. By 2040, assuming that prevalence rates of dementia at each age remain the same, our estimates suggest that the costs for care purchased in the market place will more than double from
Differences from Other Estimates and possible bias
A critical assumption in our estimates was that real costs per case will remain constant. This may be likely for care-giving, because wages of workers likely to provide care have remained stable or even decreased in real terms. It is less likely, however, for health-care spending such as that for hospital costs or medication costs. To the extent such costs continue to rise we may be underestimating future costs of dementia. However, the amount of bias may be relatively small because between 75 percent and 84 percent of attributable costs are for care-giving, which has not been subject to the large increases in prices of health care services.
Our cost estimates are considerably lower than those reported by the
Considerable future research remains to be done on this topic. We did not address the distribution of costs, that is, who is likely to pay the costs of dementia, particularly at the household level. Most households will not incur large costs for dementia care: many patients will have their care covered by
Such research will also clarify the role of long-term-care insurance. This situation in which many families incur minor costs but a few incur very large costs ought to call for an insurance solution, one in which the costs of long-term care could be spread across the entire population rather than being concentrated on the unlucky few. At the moment the long-term-care insurance products that are available apparently do not meet the needs of the older population as evidenced by the very low take-up rates, about 13 percent in the population age 55 or older. Better designed products to reduce the risk of very large out-of-pocket spending for long-term-care would help reduce a significant cause for concern of the older population.
Because a large majority of costs due to dementia are for long-term care, supported by a grant from a private donor, RAND is developing a report to be released this year that aims to help providers, payers and policy makers efficiently improve dementia long-term care.
Research Funding
This research on the costs of dementia was funded by a peer-reviewed grant from the
n1 The opinions and conclusions expressed in this testimony are the author's alone and should not be interpreted as representing those of RAND or any of the sponsors of its research. This product is part of the
n2 This testimony is available for free download at http://www.rand.org/pubs/testimonies/CT406.html.
Read this original document at: http://www.appropriations.senate.gov/ht-labor.cfm?method=hearings.download&id=9e0836e4-3b86-43fe-baf3-ce364d3bd943
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