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1. Write about the following in your journal:Some instances of abuse are clear in the sense that events or occurrences are easily identifiable. When considering the complexities of abuse, neglect and exploitation, we may draw from personal beliefs and experiences to make our decision whether an event is abuse, neglect or exploitation. In cases such as self-neglect, you might be a witness to a person’s poor home environment or their personal choices that may lead you to believe that the elder person’s living situation is “less than desirable.” In your professional role, should you encounter this situation, how do you propose to manage your beliefs and attitudes in situations like this, while also respecting the freedom of choice of older adults? 300 words.300 words.2. Write about the following in your journal:Do you believe that pay-for-play insurance models are equal for all citizens? Why or why not? Think about what it takes to be healthy, such as eating healthy foods and getting appropriate exercise. Discuss your perspective about someone who works two full-time jobs to make ends meet and who is unable to find time to exercise and is thus disadvantaged compared to someone who works one full-time job and can frequent the gym to exercise. How might educational differences play into inequality resulting from the pay-or-play insurance models? 300 words.3. Describe a policy solution that would support the role of family caregivers. An example might include a tax deduction for financial expense incurred by caregiving that allows the family member to recoup a small or significant amount of financial resources. 300 words.4. Describe a policy solution that should be implemented to reduce the cost of chronic illness. Include details of the policy itself and how it would be implemented. 300 words.5. Write about the following in your journal:Consider the multiple costs of dementia. The impact of dementia on individuals, as well as on their families, is significant; but what about the costs that ripple through the healthcare system, as well as through society? Describe the economic and emotional costs that dementia has on multiple levels. 300 words.References Broese van Groenou, M. I., & De Boer, A. (2016). Providing informal care in a changing society. European Journal of Ageing, 13(3), 271–279.Huckabee, M. (2006). A vision for a healthier America: What the states can do. Health Affairs (Project Hope), 25(4), 1005–1008.Hurd, M. D., Martorell, P., Delavande, A., Mullen, K. J., & Langa, K. M. (2013). Monetary costs of dementia in the United States. New England Journal of Medicine, 368(14), 1326–1334.Dieleman, J. L., Squires, E., Bui, A. L., Campbell, M., Chapin, A., Hamavid, H., & … Li, Z. (2017). Factors associated with increases in U.S. health care spending, 1996-2013. JAMA: Journal of The American Medical Association, 318(17), 1668–1678.Rother, J. (2016). Top of the administration’s agenda: Stem the rising cost of healthcare. Generations, 40(4), 30–37.
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The
n e w e ng l a n d j o u r na l
of
m e dic i n e
special article
Monetary Costs of Dementia
in the United States
Michael D. Hurd, Ph.D., Paco Martorell, Ph.D., Adeline Delavande, Ph.D.,
Kathleen J. Mullen, Ph.D., and Kenneth M. Langa, M.D., Ph.D.
A bs t r ac t
Background
From RAND, Santa Monica, CA (M.D.H.,
P.M., A.D., K.J.M.); the National Bureau
of Economic Research, Cambridge, MA
(M.D.H.); the Network for Studies on
Pensions, Aging, and Retirement, Tilburg, the Netherlands (M.D.H.); the University of Essex, Essex, United Kingdom
(A.D.); and the Division of General Medicine, Veterans Affairs Ann Arbor Center
for Clinical Management Research, and
the Institute for Social Research and the
Institute for Healthcare Policy and Innovation, University of Michigan (K.M.L.)
— both in Ann Arbor. Address reprint requests to Dr. Hurd at the Center for the
Study of Aging, RAND, 1776 Main St.,
Santa Monica, CA 90401, or at mhurd@
rand.org.
N Engl J Med 2013;368:1326-34.
DOI: 10.1056/NEJMsa1204629
Copyright © 2013 Massachusetts Medical Society.
Dementia affects a large and growing number of older adults in the United States.
The monetary costs attributable to dementia are likely to be similarly large and to
continue to increase.
Methods
In a subsample (856 persons) of the population in the Health and Retirement Study
(HRS), a nationally representative longitudinal study of older adults, the diagnosis
of dementia was determined with the use of a detailed in-home cognitive assessment that was 3 to 4 hours in duration and a review by an expert panel. We then
imputed cognitive status to the full HRS sample (10,903 persons, 31,936 personyears) on the basis of measures of cognitive and functional status available for all
HRS respondents, thereby identifying persons in the larger sample with a high
probability of dementia. The market costs associated with care for persons with
dementia were determined on the basis of self-reported out-of-pocket spending and the
utilization of nursing home care; Medicare claims data were used to identify costs
paid by Medicare. Hours of informal (unpaid) care were valued either as the cost of
equivalent formal (paid) care or as the estimated wages forgone by informal caregivers.
Results
The estimated prevalence of dementia among persons older than 70 years of age in
the United States in 2010 was 14.7%. The yearly monetary cost per person that was
attributable to dementia was either $56,290 (95% confidence interval [CI], $42,746
to $69,834) or $41,689 (95% CI, $31,017 to $52,362), depending on the method used
to value informal care. These individual costs suggest that the total monetary cost of
dementia in 2010 was between $157 billion and $215 billion. Medicare paid approximately $11 billion of this cost.
Conclusions
Dementia represents a substantial financial burden on society, one that is similar
to the financial burden of heart disease and cancer. (Funded by the National Institute on Aging.)
1326
n engl j med 368;14
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april 4, 2013
The New England Journal of Medicine
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Copyright © 2013 Massachusetts Medical Society. All rights reserved.
Costs of Dementia in the United States
D
ementia, a chronic disease of aging characterized by progressive cognitive decline that interferes with independent functioning,1 affects a large and growing
number of older adults in the United States.2,3
Citing the growing effect of dementia on patients, families, and the health care and longterm care systems, President Barack Obama
signed the National Alzheimer’s Project Act into
law in January 2011. One goal of the law is to improve the ability of the federal government to
track the monetary costs incurred by individuals
and public programs, such as Medicare and Medicaid, that result from dementia.4
Accurately identifying the monetary costs attributable to dementia is challenging. First, persons with dementia are likely to have more coexisting chronic health problems than those
without dementia, because they tend to be older
and because certain diseases (e.g., stroke and
depression) are more common in persons with
dementia.5 Thus, adjusting for the presence of
these coexisting conditions is important in estimating the costs due to dementia alone, as opposed to the total costs for the population with
dementia. Second, informal caregiving, the unpaid care provided by family and friends, in the
form of assistance with activities of daily living
(ADLs), is an important component of the support required by those with dementia,6 yet it is
unclear how to attribute a monetary cost to an
informal caregiver’s time.7
Given the aging of the population and the
concomitant rise in the prevalence of dementia,
the current uncertainty regarding the costs associated with dementia, and the recent focus of
the federal government on developing a coordinated plan to address the growing effects of
dementia, we sought to determine its monetary
costs in the Health and Retirement Study (HRS).
ME THODS
Study Design
The HRS is a nationally representative longitudinal survey of persons 51 years of age or older that
began in 1992.8 Because the HRS lacks a direct
measure of dementia status, a subset of 856 HRS
respondents underwent a detailed in-home clinical assessment for dementia, 3 to 4 hours in duration, as part of the Aging, Demographics, and
n engl j med 368;14
Memory Study (ADAMS), a nationally representative study of dementia in the United States.2,9
We used data on cognition and functional
limitations from the HRS survey itself to estimate a three-category, ordered probit model10 of
the probability that an ADAMS respondent had
dementia, had cognitive impairment but not
dementia, or was aging normally. These data on
cognition and functional limitations were available for all HRS respondents, not just the ADAMS
respondents. For self-respondents, the HRS assesses cognitive function using a modified version of the Telephone Interview for Cognitive
Status (TICS), a validated cognitive screening
instrument designed for population-based studies.11-14 For respondents represented by a proxy
in the HRS, cognitive function was assessed with
the use of the Informant Questionnaire on Cognitive Decline in the Elderly (IQCODE), a validated instrument consisting of 16 questions that
address the respondent’s memory and ability to
function independently.14,15 See the Supplementary Appendix, available with the full text of this
article at NEJM.org, for details on these variables
(Table S1 in the Supplementary Appendix) and
for additional details on other data, methods,
and results.
The HRS assesses whether respondents have
limitations in the ability to perform six ADLs
(eating, transferring [e.g., from a bed to a chair],
toileting, dressing, bathing, and walking across
a room) and five instrumental activities of daily
living (IADLs; preparing meals, grocery shopping, making telephone calls, taking medications,
and managing money).16 We estimated the probability model over the ADAMS subsample using
data from prior HRS interviews. To explain cognitive status, we used the variables of age, educational level, sex, ADL limitations, IADL limitations, and scores on TICS items (identification
of the current date, backward counting from 20,
subtracting by serial 7s, word naming, identification of the current U.S. president, immediate
word recall, and delayed word recall) from the HRS
interview immediately preceding the ADAMS
assessment, and changes in ADL limitations, in
IADL limitations, and in scores on TICS items
from the two preceding HRS surveys. For HRS
respondents represented by a proxy, a similar
model was estimated with the use of the
­IQCODE.
nejm.org
april 4, 2013
The New England Journal of Medicine
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Copyright © 2013 Massachusetts Medical Society. All rights reserved.
1327
The
n e w e ng l a n d j o u r na l
To assess the within-sample fit of the model,
we assigned a cognitive status of dementia if the
fitted probability of dementia was greater than
the fitted probability of normal aging or of cognitive impairment but not dementia. On the basis
of this assignment, the within-sample fit was
good: the specificity for dementia was 89.8%
and the sensitivity was 77.9%. Overall, 85.7% of
cases were correctly classified. We conducted a
further validation by making out-of-sample predictions of dementia status for a subset of ADAMS
respondents who were reassessed several years
after the initial assessment. On follow-up, progression to dementia was found in 14.9% of respondents; our model predicted 13.9%. We then
used this statistical model to estimate the probability of dementia for all HRS respondents older
than 70 years of age in five HRS surveys (spanning the period from 2000 through 2008). See
the Supplementary Appendix for further analyses of model performance.
Measures of Cost of Care
Out-of-Pocket Spending
The HRS asks respondents about health care utilization and coverage, and whether they have incurred any out-of-pocket health care expenses for
the following services or items: nursing home
stays, hospital stays, medical visits, outpatient surgery, home health care, special services (e.g., outpatient rehabilitation), prescription drugs, and dental services. Total annual out-of-pocket spending
and spending according to type of care were
computed for each year in the study period. All
spending measures were converted to 2010 dollars with the use of the medical care Consumer
Price Index.
Spending by Medicare
Information on Medicare spending is available
for HRS respondents who have agreed to linkage
of their Medicare claims records and who were
enrolled in fee-for-service plans (approximately
70% percent of persons in our study population).
These records have enrollment information and
data on total annual payments by Medicare for
durable-medical-equipment purchases, skilled
nursing-facility care, hospice care, inpatient care,
outpatient care, care provided by home health
agencies, and care provided by noninstitutional
providers of medical care.
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n engl j med 368;14
of
m e dic i n e
Net Nursing Home Spending
We used the self-reported number of nights spent
in a nursing home and nightly nursing home fees
to estimate total nursing home spending, distinguishing fees according to state of residence and
distinguishing between rates paid by Medicaid17-23
and those paid by other third parties.24 We reduced total nursing home spending by 8% because a portion of nursing home fees cover food
and housing; such costs have to be paid whether
or not someone has dementia and are therefore
not attributable to dementia.
Formal and Informal Home Care
Information on the receipt of in-home assistance
by persons with limitations in ADLs or IADLs was
used to generate the average number of hours of
care provided to persons at home. Caregiving is
classified as “informal” when the caregiver is a
relative or an unpaid nonrelative with no agency
affiliation. All other care, whether obtained
through an agency or provided by someone hired
directly, is classified as “formal.”25 The methods
used to calculate total hours of care have been
described in earlier work6 and are briefly summarized in the Supplementary Appendix.
To estimate the monetary value of formal care,
we used 2010 average hourly rates charged by
home health agencies in the respondent’s state
of residence.24 We used two approaches to estimate the monetary cost of informal care. The
“replacement cost” approach values care by using the cost of an equivalent service purchased
in the market through a home health agency.7
The “forgone wage” approach bases the valuation
on the labor-market income forgone because of
time spent on caregiving. For employed caregivers,
we used the market wages reported by respondents in each HRS survey. Because most caregivers are not employed, we used average wages for
persons with similar demographic characteristics (sex and, when reported, age and educational level). To account for the fact that many
caregivers are elderly and out of the work force,
we scaled down the imputed wages by multiplying by the rate of labor-force participation in the
same demographic group, an approach that recognizes that many caregivers would not work
even if they were not providing caregiving services. Our method estimates the loss of income
and productive services to the market economy.
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april 4, 2013
The New England Journal of Medicine
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Copyright © 2013 Massachusetts Medical Society. All rights reserved.
Costs of Dementia in the United States
It does not measure the loss of well-being asso- sons who had a history of cancer were less likely
to have dementia (P<0.001). The cost implications ciated with alternative uses of caregiver time. of these differences in demographic characterisEstimation of the Cost Attributable tics and coexisting conditions suggest the necesto Dementia sity of accounting for them in attributing costs to Persons with dementia have more coexisting con- dementia. ditions than those without dementia, conditions that by themselves lead to greater costs. To isolate Estimated Cost per Person with dementia the costs attributable to dementia, we estimated Estimates of the yearly per-person costs attributmultivariate regression models that related a able to dementia, both with and without adjustgiven cost component to the imputed probability ment for coexisting conditions and demographic of dementia, to coexisting conditions (stroke, characteristics, are shown in Table 2. Dementia diabetes, heart disease, hypertension, lung dis- was associated with a cost of $33,329 for care ease, cancer, psychiatric problems, and arthritis), purchased in the market (95% confidence interand to demographic characteristics (age, house- val [CI], $24,223 to $42,434). That is, someone with hold income, educational level, sex, and marital a probability of dementia of 1.0 would be expected status). For details of these analyses, see Tables to incur $33,329 more in health care costs than S6 through S10 in the Supplementary Appendix. someone whose probability of dementia was zero, We interpreted the estimated coefficient for the when costs were aggregated over all payers. Adprobability of dementia as the increase in costs justment for coexisting conditions and demoassociated with a change in the probability of de- graphic characteristics reduced the cost estimate mentia from 0 to 1.0, holding coexisting condi- to $28,501 (95% CI, $20,881 to $36,122), a reductions and demographic characteristics constant. tion of approximately 14%. The adjustments reWe estimated two measures of the cost at- duced attributable out-of-pocket spending and tributable to dementia. The first includes costs costs for formal home care and nursing home for care purchased in the market and is equal to care by 3 to 18%, but the adjustments reduced the sum of the estimated increases in cost as- attributable Medicare costs by 47%. On the basis sociated with dementia for out-of-pocket spend- of adjusted values, the most important attributing, Medicare spending, nursing home spending, able cost was for nursing home care (approxiand spending on in-home care. These estimates mately $13,900), followed by out-of-pocket spendcome from the multivariate models discussed ing (approximately $6,200), formal home care above. The second measure adds in the monetary (approximately $5,700), and Medicare (approxivalue of time spent by unpaid caregivers that is mately $2,700). attributable to dementia, calculated as either the The monetary value of informal home care replacement cost or the cost of forgone wages. attributable to dementia did not vary substantial­ ly when controlled for coexisting conditions and demographic characteristics. However, it varied R E SULT S by a factor of more than 2 when calculated on Probability of Dementia the basis of the replacement cost as compared The average predicted probability of dementia, with the cost of forgone wages. stratified according to personal and household After adjustment for coexisting conditions and characteristics, is shown in Table 1. Nonwhite demographic characteristics, the attributable year­ race or ethnic group, female sex, single status, ly cost per person, including both the cost of older age, lower educational level, and lower house- care purchased in the marketplace and the cost hold income were associated with an increased of informal care, was $41,689 (95% CI, $31,017 likelihood of dementia (P<0.001 for all compari- to $52,362) when the valuation of forgone wages sons). Persons with one or more limitations in was used and $56,290 (95% CI, $42,746 to ADLs or IADLs were also more likely to have de- $69,834) when the valuation of replacement cost mentia, as were those who had a history of stroke was used. Calculating the value of informal home or who had heart disease or a psychiatric condi- care in terms of forgone wages yielded an estition (P<0.001 for all comparisons). However, per- mate of the cost of unpaid caregiving that was n engl j med 368;14 nejm.org april 4, 2013 The New England Journal of Medicine Downloaded from nejm.org on April 1, 2019. For personal use only. No other uses without permission. Copyright © 2013 Massachusetts Medical Society. All rights reserved. 1329 The n e w e ng l a n d j o u r na l of m e dic i n e 31% of the total cost; calculating the value of age and an annual population cost of $109 bilinformal home care in terms of the replacement lion for care purchased in the market, with a cost cost yielded an estimate of 49%. of $159 billion to $215 billion when the estimated monetary value of informal care was included. Estimated Total Costs By 2040, assuming that prevalence rates and Estimates of the total cost of dementia to the cost per person with dementia remain the same, U.S. economy now and in the future are shown in our estimates suggest that these costs will more Table 3. To estimate these costs, we combined the than double because of the aging of the populaadjusted cost per person with dementia shown tion. Although the ability to pay these costs will in Table 2 with prevalence rates from ADAMS be ameliorated somewhat by a growing populaand population projections from the U.S. Census. tion, they are still expected to increase by 79% For 2010, this estimation yielded a prevalence when calculated per adult (with adults defined as of 14.7% in the population older than 70 years of persons 18 years of age or older). Table 1. Probability of Dementia According to the Characteristics of the Study Population.* Characteristic Distribution Probability of Dementia (95% CI) P Value for Comparison with Reference Group 0.097 (0.093–0.101) Reference group percent Race or ethnic group† White 86.7 Hispanic 4.4 0.168 (0.149–0.187) <0.001 Other 8.9 0.184 (0.170–0.199) <0.001 Female 60.7 0.121 (0.116–0.127) Reference group Male 39.3 0.088 (0.082–0.093) <0.001 Sex Marital status Married 45.9 0.065 (0.061–0.069) Reference group Unmarried 54.1 0.145 (0.138–0.151) <0.001 Age 71–74 yr 23.3 0.028 (0.026–0.031) Reference group 75–79 yr 31.7 0.049 (0.045–0.053) <0.001 80–84 yr 24.1 0.130 (0.123–0.137) <0.001 85–89 yr 14.2 0.203 (0.192–0.215) <0.001 6.7 0.385 (0.365–0.406) <0.001 ≥90 yr Educational level Less than high-school graduate 32.2 0.159 (0.151–0.167) Reference group High-school graduate 33.1 0.103 (0.096–0.110) <0.001 Some college or more 34.7 0.066 (0.060–0.071) <0.001 28.3 0.183 (0.174–0.191) Reference group Household income <$15,000 1330 $15,000–$29,999 31.8 0.104 (0.098–0.110) ... 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