Current and Future Costs of Alzheimer's and Dementia Care

Dementia care has substantial economic costs, with consequences for health care systems and for the health and welfare of the families who provide the majority of their care. There are many studies of the costs of dementia, but they lead to widely varying estimates of the costs due to differences in the time-frame studied, the comprehensiveness of the costs included, differences in the quality of the data used, and the differences in the definition of dementia onset. These factors make the understanding the literature and painting a consistent picture of the future costs of Alzheimer’s and dementia care more difficult.

The Cost of Alzheimer’s study takes key steps in improving the measurement of current dementia care and improving the projections of the future burden of the disease. The specific aims of this research are to: (1) Estimate how the direct health care costs of dementia care vary with the insurance and care providers; (2) Estimate the direct and indirect costs to caregivers of dementia care; (3) Produce and calibrate a forecasting model to estimate the future costs of dementia care in order to inform resource allocation decisions.

Findings/Policy Implications


Some of our key results show:

  1. The median cost to the daughter for provision of care to an elderly mother is dependent on the mother’s functional status.


  1. Nearly half of the five-year incremental cost to the traditional Medicare program is incurred within the first year post-diagnosis of dementia.


  1. Beneficiaries newly diagnosed with Alzheimer’s disease and related dementias, hypertension, and psychiatric disorders had high rates of switching into Medicare Advantage (MA) plans and low rates of switching out.


  1. Comparing patients with diabetes in Medicare Advantage vs patients with diabetes on Traditional Medicare, results show that compared to TM beneficiaries, those with MA had more primary care visits per person, but had lower primary care expenditures per person.


  1. Medicare Advantage beneficiaries with ADRD had lower health care utilization across the board compared to those with Traditional Medicare, and this trend was also seen for individuals without ADRD.


  1. For beneficiaries with diabetes, those with MA had less annual health care utilization alongside fewer medical provider visits and outpatient hospital visits compared to TM, but for TM and MA beneficiaries without diabetes, the only difference observed was in medical provider visits.


  1. Sex and education are important modifiers of the relationship between dementia diagnosis and length of survival.