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Keywords:

  • Health care costs;
  • Medicare;
  • aging/elderly/geriatrics

Objective

Estimate the lifetime cost of dementia to Medicare and Medicaid.

Data Source

1997–2005 Medicare Current Beneficiary Survey.

Study Design

A multistage analysis was conducted to first predict the probability of developing dementia by age and then predict the annual Medicare/Medicaid expenditures conditional on dementia status. A cohort-based simulation was conducted to estimate the lifetime cost of dementia.

Principal Findings

The average lifetime cost of dementia per patient for Medicare is approximately $12,000 (2005 dollars) and for Medicaid about $11,000. Dementia onset at older age leads to shorter duration and lower lifetime cost. Increased educational level leads to longer longevity, more dementia cases per cohort, but shorter duration, and lower lifetime cost per patient, which could offset the cost increase induced by more dementia cases. Increased body mass index leads to more dementia cases per cohort and higher lifetime cost per patient.

Conclusion

Net cost of dementia is lower than the estimates from cross-sectional studies. Promoting healthy lifestyle to reverse the obesity epidemic is a short-term priority to confront the epidemic of dementia in the near future. Promoting higher education among the younger generation is a long-term priority to mitigate the effect of population aging on the dementia epidemic in the distant future.