Most people think of dementia as something that affects a person’s brain. But a new study shows just how much damage it does to a person’s wallet and bank account too – as well as the higher demands it places on their family members.
In all, people diagnosed with dementia saw their out-of-pocket spending for healthcare more than double, and their net worth decline by more than 60%, within the first eight years of being diagnosed, the study finds.
Meanwhile, other people of similar ages and in similar health, but without dementia, didn’t see much change in either financial measure in that time, according to the findings published in JAMA Internal Medicine by a team from the University of Michigan.
The study also reveals major differences in demand on family members. By the end of their second year after the onset of symptoms, people with dementia needed three times more hours of care from family and friends than their peers without dementia did.
People with dementia also entered nursing homes at nearly five times the rate of their peers in those first two years. Those who had less family support available were much more likely to enter a nursing home.
People with dementia were also much more likely than their peers to use paid in-home care, which is often not fully covered by Medicare.
Another sign of financial distress: enrollment in Medicaid, the safety-net healthcare program for people living in poverty, nearly doubled for people with dementia in the first eight years after diagnosis. The rate of enrollment stayed flat for their peers.
The new analysis uses data from the Health and Retirement Study, a long-term in-depth study based on interviews and health exams – to reveal trends that previous studies using Medicare data alone could not.
The researchers analyzed data from nearly 2,400 adults who had the onset of dementia, and an equal number of older adults who were carefully matched based on extensive socioeconomic characteristics, health and healthcare status.
They looked at data for both groups from before the dementia onset, all the way to eight years after the diagnosis. HRS is based at U-M’s Institute for Social Research.
Researchers used an approach called propensity score matching to carefully match each person with dementia with a person whose health and other factors were very similar to theirs. Dementia onset was based on a validated measure using an array of data from the Health and Retirement Study.
This matching process allowed the researchers to see just how substantial the additional financial and healthcare burden of dementia really is for an individual.
At baseline, the time before their dementia diagnosis, study participants’ wealth averaged $79,000 when all assets and debts were counted. Overall, the wealth of the peer group without dementia was about the same.
Both groups had annual out-of-pocket spending for medical expenses such as co-pays, deductibles, over-the-counter purchases and home care of about $4,000 at baseline.
By the end of two years, people with dementia saw their average wealth drop to $58,000, and their out-of-pocket costs double to around $8,000. Their peers saw neither of these impacts.
By the end of eight years, people with dementia had spent twice as much as their peers out of their own pockets for health expenses and had seen their wealth drop to an average of $30,500 while their peers saw no significant drop.
The availability of family support was a critical factor in moving to nursing home residence, both at baseline and by the end of eight years after dementia onset.
Nearly one in three people with dementia who had no spouse or child at baseline were living in nursing homes by their eighth year after dementia onset.
The rate was nearly as high – about 1 in 4 -- among those who had a spouse with a disability and a child who lived nearby, and those who had no spouse but had a child who lived nearby.
By comparison, nursing home residence was half as common among those who either lived with a non-disabled spouse when they were first diagnosed, or who had both a spouse and a child living with them, whether or not their spouse had a disability.
