As the US population ages, the number of people with dementia keeps rising. It’s a problem from hell and a huge social challenge. A committee convened by the National Academy of Sciences offers an overview in Reducing the Impact of Dementia in America: A Decadal Survey of the Behavioral and Social Sciences (September 2021, available with free registration). The committee writes (references and citations omitted): “More than 6 million people in the United States are currently living with Alzheimer’s disease, a number that will rise to nearly 14 million by 2060 if current demographic trends continue. It is estimated that approximately one-third of older Americans have Alzheimer’s or another dementia at death …”

Here, I’ll focus on the economic side of the issues and set aside the direct costs and reduced quality of life for the person with dementia, although the personal side affects my own extended family, along with so many others. The core of the economic problem is that people with dementia need care. The NAS report notes (again, citations omitted):

The primary economic costs of dementia to persons living with dementia and their families are (1) medical and long-term care costs, and (2) the value of unpaid caregiving provided by family (most commonly) and friends. Most estimates of these costs in the literature draw on such nationally representative data sources as the Health and Retirement Study, the Medicare Current Beneficiary Survey, and Medicare claims data. An estimate of annual per-person costs for 2019, which includes health care and the value of unpaid care provided to persons with Alzheimer’s disease, is approximately $81,000 ($31,000 is the value of the unpaid care). This estimate is about four times higher than the costs of the same care provided to similarly aged persons without
the disease. …

Residential care is very expensive. Estimates of the typical costs of long-term care range from $52,624 per year for a home health aide to $90,000 for a semiprivate room in a nursing home and up to $102,000 for a private room. 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, and one-quarter of adults with dementia who live in the community are covered by Medicaid over the course of a year.

When aggregated to the U.S. population, the costs are estimated to have exceeded $500 billion in 2019 and are projected to increase to about $1.5 trillion by 2050. Unaccounted for in these estimates are other economic costs, such as the impact on caregivers’ wages and future employability; when included, these costs increase estimates of unpaid caregiver costs by as much as 20 percent . Moreover, these costs may be underestimated because the physical and mental strain associated with unpaid caregiving likely translates to other costs, such as for caregivers’ own health care. … 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. Financial harm to individuals living with dementia may also have long-term implications for the surviving spouse.

What might be done? One can try to think about ways of providing the needed services less expensively, but without compromising quality. One can think about steps that might reduce the incidence of dementia. One can hope for a cure. All of these seem worth trying; none at present seems especially promising.

The idea of less expensive and higher quality care is of course enticing, and perhaps it can be delivered by some combination of facilities designed for dementia patients, which would try to free up the time of human staff to provide care by handing off other tasks like cleaning and cooking to lower-cost automation. But I’m not aware of any big success stories along these lines.

There is strong evidence that being in better health overall reduces one’s chance of dementia. As the report notes: “For example, robust evidence suggests that people who take such common-sense measures as eating a healthy diet, exercising regularly, maintaining a healthy weight, and reducing cardiovascular risk have a lower risk of dementia.” Of course, a step-increase in healthy behaviors would have many other benefits as well, but I’m unaware of any big success stories that would dramatically improve health in this way beyond current levels.

Will technology ride to the rescue? Maybe. The FDA has just approved aducanumab, the first drug for treating Alzheimer’s disease. With wider use, we’ll see how well it works, and perhaps develop something beter. But new technologies come at a cost, too. The NAS report describes the issue this way:

First, more than 130 innovative treatments for Alzheimer’s disease and related dementias are being investigated in clinical trials, and some may turn out to slow or halt disease progression and reduce costs. A simulation study found that a hypothetical treatment innovation that delayed the onset of Alzheimer’s disease by 5 years would reduce the population with the disease by 41 percent in 2050, which would reduce annual costs by $640 billion. However, novel treatments, which would likely have high prices, could exacerbate the overall economic impact of the disease. …

The recent approval by the U.S. Food and Drug Administration (FDA) of the first new drug in decades that is intended to treat Alzheimer’s disease, aducanumab, is likely to have substantial impact on the cost picture. … The manufacturer of aducanumab initially estimated that 1 to 2 million persons would currently be eligible to receive the medication, although that number may change depending on eligibility guidelines. Using the manufacturer’s estimated cost of $56,000 per patient per year, the total cost just for the drug could range from $56 billion to as much as $112 billion. Whatever number of people ultimately receive the drug, such estimates do not include the costs of infusion, monitoring and treating adverse effects, and additional pre-administration testing. The magnitude of ancillary costs is not yet established, but observers have suggested that they could add tens of thousands in costs per eligible patient. To put the cost of the drug alone into perspective, the total 2021 National Institutes of Health budget is $43 billion and the total 2021 Medicare budget is $688 billion.

It’s past time for an Operation Warp Speed aimed at dementia, which would guarantee that the government would purchase a certain quantity of the drug in exchange for meeting certain health and cost-per-patient targets. But barring salvation via technology, the question of how society will treat its dementia patients–especially those who do not have family caregivers or financial resources–is looming over our health care policy debates.