The High Cost of Dementia and Memory Care

80410231A new study, published in the New England Journal of Medicine, found that the cost of caring for dementia patients in the United States is at a staggering level, destined to rise further in the coming decades.

To put this into perspective, the study reports that the costs associated with dementia care is higher than two of the leading causes of death in the United States – heart disease and cancer.  This is cause for concern, as the number of people that will be diagnosed with dementia will significantly rise in the near future with the aging population in the U.S.

So What is Dementia (According to the Alzheimer’s Association)?


According to the Alzheimer’s Association, dementia is a term that is used to describe a decline in mental ability that is severe enough to interfere with everyday life. While Alzheimer’s disease is the most common type of dementia, there are multiple forms of the mental health condition. Symptoms of dementia can vary widely from person to person; however at least two of the core mental functions must be severely impaired for an individual to receive a diagnosis of dementia.  These core functions include: memory problems (including memory loss), communication and language difficulties, attention problems, decreased visual perception and difficulty with reasoning and judgement.

In the early stages of dementia, many people have difficulty with short term memory loss such as forgetting where they put their keys, or difficulty remembering appointments.  Having slight memory loss may not seem like cause for concern, but most cases of dementia are progressive with symptoms starting slowly and progressively getting worse over time. Therefore, if you start to notice memory problems in yourself or in a loved one, seek treatment right away.  Early diagnosis and treatment is vital to help improve that quality of life of individuals suffering with dementia as well as their families.

Costs Associated with Dementia Care

The researchers looked at a variety of costs that are associated with caring for a patient with dementia, including: out-of-pocket spending, Medicare spending, net nursing home spending, as well as formal and informal home care spending.  Caring for an individual with dementia, while taking coexisting conditions and demographic characteristics into account, costs approximately $28,501 per year.  These costs include nursing home care ($13,900), out-of-pocket spending ($6,200), formal home care ($5,700) and Medicare ($2,700).

Even more staggering, are the costs associated with caring for a dementia patient when informal care is taken into account.  Informal care refers to care that is provided by a family member or other non-paid person that is not associated with an agency.  Taking all costs into consideration, including informal care, the cost associated with dementia care spikes to $41,689 per year.  Add in lost wages on the part of the relative and the cost climbs even higher to $56,290 per year.

What do These Costs Mean?


The costs associated with dementia care will have a direct impact on the U.S. economy.  In 2010, the total population cost of dementia care purchased in the market place was estimated at $109 billion without taking informal care into consideration.  When informal care was taken into account, the total population cost rose to $215 billion. With the aging population in the United States, the total population costs are expected to double by 2040.

Cost of Dementia Care Compared to Other Diseases

The findings from this study place dementia care among the diseases that are most costly to society.  Costs associated with dementia care, not including informal care, were pegged at $109 billion which was similar to the direct costs associated with heart disease which were reported at $96 billion in 2008 and $102 billion in 2010. Costs associated with dementia care were substantially higher than direct costs associated with cancer which were reported at $72 billion in 2008 and $77 billion in 2010.

RELATED READING: Does Heart Disease Mean You’re Dementia Proof?

With the aging population in the United States there is bound to be an increasing number of individuals diagnosed with dementia in the coming years.  Once an individual is experiencing memory problems and is diagnosed with dementia, it is too late to get arrangements in place, leaving families unprepared and overburdened.  While a diagnosis of dementia is not preventable, preparation is a key element for families.   Families need to plan for the future, accounting for treatment, and cost of living expenses that may arise if an aging parent is diagnosed with dementia.  It is also important to remember to draw up wills and power of attorney documents prior to being diagnosed with dementia.  If families plan for an unknown future they will be better prepared to deal with unexpected situations that may arise with a dementia diagnosis.