ECONversations: The Monetary Costs of Dementia
Interview Highlights

Public Affairs Forum
October 21, 2015
An interview with Michael Hurd, Director, RAND Center for the Study of Aging

Dementia is a syndrome of conditions coming from various types. It's a loss of cognitive abilities that is associated with old age. By the time people are in their 90s, the fraction of the population demented might be 40 to 45 percent. Most people end up being in nursing homes who are suffering from dementia.

Nursing homes are expensive. The average cost for a year's stay in a nursing home in the United States is a number like $85,000 a year. Informal care examples would be a dementing husband is cared for by his wife, and she's with him 24/7 unless she can find a replacement. Sons do not often provide informal care and as an aside, they don't often provide money either—so it's better to have daughters.

The cost attributable to actual spending in 2010 for dementia was around $109 billion at the national level. That turns out to be more than the cost attributable to either heart disease or cancer, which are the two leading expenditure categories following dementia. Dementia is a serious problem even today, but it's going to become a much more serious problem. For example, the fraction of people over age 85 is expected to more than double going to 2040.

As a society, we need to be spending and investing funds to help find a cure for dementia before these costs escalate in the way that we project them to be escalating.