Dementia is often framed as a financial burden on the health system.
However new study has found that when a person is diagnosed with dementia, it can significantly damage the person’s net worth and spending.
Dementia is a general term for loss of memory, language, problem-solving, and other thinking abilities that are severe enough to interfere with daily life. In 2019, 5% of Nigerians were living with dementia: 6.7% are women and 3.1% are men. Most Nigerians believe dementia is a normal part of aging.
According to the Lancet, 1.4 million Nigerians are estimated to be living with dementia by 2050.
The cost of caring for someone living with dementia goes up gradually but it can quickly add up.
What the Research found
- People living with dementia spend more than double on out-of-pocket costs (costs outside health insurance).
- They lose more than 60% of their net worth within the first eight years of their diagnosis.
- They require more hours of care from family and friends.
- In comparison to other adults their age and health status but without dementia, they enter nursing homes at a rate five times higher.
- People with dementia living at home or in the community are likely to use home-paid services which are not generally covered by insurance companies.
Financial consequences of Dementia
According to the Alzheimer’s Society, dementia is among the most expensive health conditions, costing more than $387,000 (in 2021 dollars) in the last five years of a person’s living with dementia.
Other research has shown that the out-of-pocket costs averaged $38,540 more (in 2015 dollars) to care for those living with dementia versus those without from age 65 to death. In 2022 dollars, based on a 23.3% cumulative inflation rate, the difference is $55,187.
Researchers also noted that another sign of financial distress is that enrolment into health insurance schemes and health maintenance organizations (HMO) plans nearly doubled for people living with dementia in the first eight years after their diagnosis. Meanwhile, the enrolment rate remained flat for their peers.
HwaJung Choi, Ph.D., the research lead, found that unpaid caregiving by family and friends is the most striking and persistent care use difference. On average, caregivers spend 45 hours per month caring for people living with dementia as compared to 13 hours per month spent caring for those with it. This difference remained consistent for eight years.
How the research was conducted
- Data from 4,378 older adults was taken from the Health and Retirement Study (HRS)- a long-term analysis based on health interviews and health exams.
- Researchers examined outcomes such as care and financial status to reveal trends that previous studies using health insurance data alone could not do.
- Before a dementia diagnosis, the median of the study participants’ wealth was approximately $79,000 when all assets including debts were counted.
- Overall, the wealth of the peer group without dementia was the same.
- Both groups had annual out-of-pocket expenses of about $4,000.
- By the end of 2 years after diagnosis, people with dementia saw their median wealth drop to $58,000 and their out-of-pocket expenses double to $8,000. The group without dementia saw none of these impacts.
- After eight years post-diagnosis, people with dementia had spent nearly twice as much as the other group on health expenses. Their median wealth went from $79,339 to $30,490.