Costs of Caring for California's Alzheimer Patients Will Triple by 2040, say UCSF Researchers

The costs of caring for California community residents with Alzheimer’s disease will increase 83 percent by 2020 and an additional 59 percent by 2040, according to UCSF researchers from the Institute for Health and Aging.

Similarly, costs of caring for Alzheimer’s disease patients in California institutions will increase 84 percent by 2020 and an additional 61 percent by 2040 - assuming the supply of nursing home beds meets the projected demand.

This increase reflects the number of California residents who are projected to succumb to Alzheimer’s disease in the next 40 years, said Patrick Fox, PhD, director of the UCSF Institute for Health and Aging and principal investigator on a report, which appears in the spring issue of the Journal of Public Health Policy.

Though state and federal governments will shoulder some of the costs of caring for Alzheimer patients (largely through Medicaid and Medicare), the majority of those costs will be borne by family members, said the researchers.

“Dementia places substantial medical, social, psychological, and financial burdens on patients, families and communities. People with Alzheimer’s disease consume both formal medical and social services, those rendered for a price, and informal services, those for which providers, usually family members, are not reimbursed,” said Fox.

Projected informal costs of caring for people with Alzheimer’s disease represent an estimated dollar value of the informal caregiver’s labor rather than an actual dollar value, he explained.  However, if unpaid caregivers were not available, long-term services would be purchased from paid providers or Alzheimer’s patients now cared for in the community would be placed in institutions. “The changing nature of the family and increasing labor force participation of women may result in fewer available caregivers for elderly people in the future. Therefore, many of the informal care costs borne by family members may become actual expenditures,” he said.

Fox explained that decisions about the appropriate roles and responsibilities of the public and private sector can be made only by considering moral, ethical, value-based and political concerns. “A crucial question is how much public sector support society is willing to provide to help informal caregivers,” said Fox.

Costs for caring for California community residents with Alzheimer’s disease were $22.4 billion in 2000 and are expected to increase to $42.8 billion by 2020 and $68.1 billion by 2040. Similarly, costs of caring for Alzheimer’s disease patients in California institutions were $2.5 billion in 2000 and are expected to increase to $4.6 billion by 2020 and $7.4 billion by 2040.

For community-resident patients, informal costs accounted for 73 percent of the total, while formal costs accounted for the remaining 27 percent. For institutionalized patients, informal costs accounted for 12 percent of the total, while formal costs accounted for 88 percent of the total. “More than 60 percent of the formal services provided to patients in either care setting were paid for out-of-pocket,” explained Fox.

The study examined paid and upaid costs attributable to Alzheimer’s disease for 93 community residents and 94 institutionalized patients residing in California. Informal care hours and formal service costs were obtained from caregivers and the billing records for a one-year period.

Additional researchers on the study include Neal Kohatsu, MD, MPH, medical director of the Medical Board of California, Wendy Max, PhD, UCSF professor of medical economics in the Institute for Health and Aging, and Pamela Arnsberger, PhD, associate professor in the school of social work at the University of New England. The research was funded by the California Department of Health Services.