Reducing the Impact of Dementia in America A Decadal Survey of the Behavioral and Social Sciences (2021) / Chapter Skim
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7 Economic Costs of Dementia
7 Economic Costs of Dementia
Pages 209-222
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From page 209... ...
There are two broad ways to decrease the negative economic impacts of dementia: reducing unnecessary costs and increasing value, that is, achieving significant improvements in health, quality of life, and other outcomes that justify their costs. This chapter reviews what is known about the economic costs of dementia and explores both the drivers of these costs and the potential economic impacts of innovations in treatment and care, policies, and programs.
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From page 210... ...
. Medicaid, which covers long-term care for low-income individuals and those who become poor as a result of paying for health care and long-term care, is the largest public payer for long-term care, covering 62 percent of nursing home residents (Kaiser Family Foundation, 2017)
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From page 211... ...
Other costs unaccounted for include financial harm to persons living with dementia and their families. Cognitive impairment may lead to financial decision-making errors, including payment delinquency and susceptibility to financial exploitation, starting years before diagnosis (Nicholas et al., 2020)
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From page 212... ...
Additional research on the long-term sustainability of various financing options, as well as on the trade-offs among different spending priorities and implications for those who will bear the costs, is needed to support state and federal policy makers as they consider and implement long-term care programs. Among the many questions whose answers may point to opportunities for reducing economic burden are how the costs of dementia affect generations of family members and contribute to the intergenerational transmission of inequality; how the costs are distributed among public sources, individuals, and families; how policy changes related to dementia care benefits affect costs; how reimbursement for dementia care and long-term care insurance affect the costs of dementia; and how to finance long-term care for persons living with dementia.
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From page 213... ...
The cost and reimbursement structures of traditional Medicare and Medicare Advantage plans also play a key role in the overall cost picture. Newer Medicare benefits, such as the annual wellness visit with its required cognitive screening, may increase early detection, but the effects on costs are as yet unknown (Jacobson et al., 2020)
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From page 214... ...
. Beginning in 2020, Medicare Advantage risk adjustment includes dementia, which will increase payments to Medicare Advantage plans for medical care for persons living with dementia.
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APPLYING BEHAVIORAL ECONOMICS Behavioral economics, an interdisciplinary field that draws on research in both psychology and economics, offers a valuable approach to identifying opportunities to reduce costs or add value to costly services. This approach breaks with the usual assumption of economists that individuals act purely according to rational self-interest.
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From page 216... ...
. However, this approach has not been widely applied to challenges associated with dementia, and it could be of significant value in the design of interventions to, for example, support conversations about advance care planning among patients, caregivers, and clinicians; align nonfinancial incentives, such as by discouraging the inappropriate use of antipsychotics; or encourage health care providers to offer screening for cognitive impairment.
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From page 217... ...
There will be variation in the coverage provided by the private plans that younger persons not eligible for Medicare rely on. For those covered by traditional Medicare, out-ofpocket costs will depend on supplemental coverage, while for beneficiaries in Medicare Advantage costs will depend on plan type.
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From page 218... ...
• Estimation of the value to individuals, families, and society of innovations in prevention; diagnostics; and treatment, including pharmacologic treatments. TABLE 7-1 Detailed Research Needs 1: Total Economic • Quantifying of dementia-related costs not currently measured, Impact including but not limited to caregivers' physical and mental health care use, current and future wages, employability, financial exploitation, harms related to dementia, and impacts across generations of family members • Quantifying and analysis of long-term financial impacts of dementia on a spouse and family members and the intergenerational transfer of inequality related to dementia care costs • Assessment of distribution of costs: how costs and types of costs vary across racial/ethnic populations and other vulnerable groups, etiological type of dementia, age at dementia onset, life course of disease, and type of health care system serving persons living with dementia • Assessment of how costs are distributed across payers • Analysis of innovations in long-term care financing • Assessment of factors, including methods utilized, that drive differences in cost estimates
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From page 219... ...
. An alternative payment model to support widespread use of collaborative dementia care models.
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From page 220... ...
. Medicare Advantage Chronic Special Needs Plan boosted primary care, reduced hospital use among diabetes patients.
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. Informal costs of dementia care: Estimates from the National Longitudinal Caregiver Study.
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From page 222... ...
. Multimorbidity and healthcare utilisation among high-cost patients in the US Veterans Affairs health care system.
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