HealthDay News — In 2010, about 15% of elderly individuals in the United States had dementia, with the total annual monetary cost ranging from $159 to $215 billion, results of a RAND study indicate.

These costs are projected to increase 80% per adult by 2040. The yearly cost per person due to dementia were estimated to be anywhere from $41,689 (95% CI $31,017 to $52,362) to $56,290 (95% CI $42,746 to $69,834), depending on how informal care was valued (the cost of equivalent paid care or estimated wages forgone), Michael D. Hurd, PhD, of RAND in Santa Monica, Calif., and colleagues reported in New England Journal of Medicine.

About $11 billion of this cost was paid by Medicare. “Dementia represents a substantial financial burden on society, one that is similar to the financial burden of heart disease and cancer,” the researchers wrote.

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For comparison, annual heart disease-associated costs were $96 billion in 2008 and cancer associated costs were $72 billion in 2008 — translating to about $102 billion and $77 billion, respectively, in 2010 dollars.

Hurd and colleagues estimated the number of older adults with dementia using a subsample of 856 adults from the Health and Retirement Study (HRS). They then imputed cognitive status to the total HRS population of 10,903 persons (31,936 person-years) 51 and older whose responses were collected since 1992 to compose a larger sample with a high probability of dementia.

The researchers determined market costs associated with caring for those with dementia based on self-reported out-of-pocket spending, utilization of nursing home care, Medicare claims data and valuation of the hours of informal (unpaid) care.

They used 2010 average hourly rates charged by home health agencies in the respondent’s state of residence to estimate costs of paid care. For unpaid care, the researchers calculated costs by applying the cost of a comparable service in the marketplace or using “forgone wages,” the value of income forgone while the caregiver was attending to a dementia patient.

About 70% of the study population was enrolled in Medicare and had costs assessed from claims data and fee-for-service plans.

Study limitations included imprecision associated with self-reported data, difficulty estimating informal care costs accurately, lack of access to Medicaid records and reliance on imputing dementia status from a subsample to the entire HRS population, the researchers noted.


  1. Hurd M et al. N Engl J Med. 2013; 368: 1326-1334.