The Real-World Medicare Costs of Alzheimer Disease: Considerations for Policy and Care

BACKGROUND: Headlines in popular media suggest that Alzheimer disease will bankrupt the Medicare program. Indeed, Alzheimer disease affects more than 5 million older Medicare beneficiaries. OBJECTIVE: To compare total Medicare-covered (allowed) costs of patients with Alzheimer disease with the risk adjusted costs of beneficiaries without dementia over their last years of life, using claims data. METHODS: Using the Medicare 5 Percent Limited Data Set claim files from 2006-2015, we conducted a cost impact analysis of costs for up to 8 years before the year of death. Risk adjustment was performed at a beneficiary level using Medicare's 2015 Hierarchical Condition Categories. Beneficiaries were classified into dementia categories based on their diagnoses during the last 3 years of life. Costs were trend adjusted to 2015. RESULTS: This study found that 40% of deceased beneficiaries have Alzheimer disease or unspecified dementia diagnoses in their claims history. In their last 9 years of life, Alzheimer disease added about 11% to the average $17,000 per year Medicare cost for same-risk beneficiaries without dementia. CONCLUSIONS: Like many diseases, Alzheimer disease and dementia are associated with aging, but unlike other diseases, families and Medicaid, rather than Medicare, bear most of the substantial cost burden. As research continues into Alzheimer treatments, it is not too early to consider how to better integrate Medicare and Medicaid to fund and improve patient outcomes, which will likely involve better diagnosis, treatment, and care coordination. Copyright (C) 2019, Academy of Managed Care Pharmacy. All rights reserved.