Economics of Dementia

Julie Bynum, MD MPHDecember 7, 2010

Disease Specific Costs

• Why Discuss them?

Stella Marr’s postcard

To Lobby for More Research Funding

Alzheimer’s Research Trust, 2010

Understand what needs to be done for better outcomes in the future

(or at least as good)

Canary in a coal mine

Fund balance as % of annual expenditures:

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.

Actual Projected

Low cost

Intermediate

High cost

Medicare Part A (Health Insurance) Trust Fund Balance, 2001-2018

Under High Cost, Low Cost, and Intermediate Assumptions

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

Health

Social

Informal Care

Productivity loss

Medical

Psychiatric & Behavioral

Supervision

Safe housing

Functional Supports (eating, dressing etc)

EXAMPLES

Spousal support

Unpaid caregiving

Reduced hours due to informal care giving

“Sandwich Generation”

Distribution of costs is different in dementia from other diseases.

Direct Costs

Who are the stakeholders?Alt. (Who pays the bills?)

Community

Nursing home

Assisted Living

HOSPITAL

Local Care System

Local Care System

Community

Nursing home

Assisted Living

HOSPITALHHA SNF

Clinic

TransitionsCommunity

Nursing home

Assisted Living

Funding Transitions

Assisted Living HOSPITAL Nursing home

MedicarePrivate Pay MedicaidMedicare SNF Private Pay

HOSPITAL

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

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

Bynum, Unadjusted Data MCBS 2004

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

Engel, 1977

Physical

SocialPsychological

Biopsychosocial Model of Costs for the Dementia Patient

Physical

SocialPsychological

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 TrialMittelman 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

Spouse-Caregiver Intervention Drug Study: Donepezil

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

Delay Placement by 329 Days No Effect on Nursing HomeMittelman 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• 2.4 FTE counselor with

85pt caseload• Salary 35-45K/yr inflated

for benefits• $1280-1600/patient/yr

Drug Intervention• Donepezil $1560/pt/yr

Added cost• 329 days in Nursing

Home = $43,428/pt

Where Do People With Where Do People With AlzheimerAlzheimer’’s Disease Live?s Disease Live?

Home/ALHome/AL70%70%

NHNH30%30%

Source: AlzheimerSource: Alzheimer’’s Association, 2004s Association, 2004

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

Albert Einstein