Alzheimer’s disease and other dementias (ADRD) are rapidly rising in prevalence – and cost.
Left unchecked, these conditions represent a rising threat to healthcare resources and spending, a bleak landscape for patients who will be needing care, and an untenable scenario for health plans.
While health plans today recognize cognitive decline as a highly challenging condition to manage, they rank it as less costly when compared to other chronic conditions. In contrast, data from Centers for Medicare and Medicaid Services show ADRD has the fourth highest spend per capita on a list of 21 chronic and costly conditions.
This contrast highlights a gap in care for the number of people diagnosed with dementia as well as a spiraling cost to the healthcare system — both of which will continue to rapidly grow as the population ages. Health plan leaders currently underestimate the situation, despite spending on ADRD that is forecast to reach $1 trillion globally by 2050. Health plans have only a limited window of time to act before the diseases’ associated costs spiral out of control.
A rising threat to health plan financials
Researchers have estimated that individuals with Alzheimer’s disease or other dementias currently cost Medicare Advantage plans 3 times more than their peers without Alzheimer’s disease, which equates to about $18,000 in additional spend per member each year.
In addition to memory care and long-term care, these patients are 3 to 8 times more likely to experience falls that require hospitalization, visit the emergency department, and require longer hospital stays then those individuals without cognitive decline.
Nearly 9 of 10 Medicare beneficiaries with Alzheimer’s disease or other dementias have at least one other chronic condition and are more likely than those without Alzheimer’s disease to have multiple additional chronic conditions, making them the most expensive members within these chronic disease categories due to their higher use and limited impact of services not adapted for members with cognitive impairment.
The Alzheimer’s Association estimates the current economic impact associated with managing Alzheimer’s disease and other dementias to cost $345 billion annually in the U.S., which doesn’t account for the additional cost related to informal caregiving or the price of emerging pharmaceuticals, which may carry hefty price tags.
New interventions offer plans hope – and savings
While a cure for Alzheimer’s disease and other dementias remains elusive, clinical trials now show that non-pharmacologic interventions, such as movement, mindfulness, and social connection are associated with improvements in physical and cognitive functioning and general quality of life.Further, virtual access to classes eliminates the challenges related to transportation, which have been found to significantly impact adherence to regular class participation for individuals with cognitive decline and their caregivers.
Despite outdated beliefs that older adults are unable or unwilling to adapt to new technologies, data coming out of the COVID-19 pandemic have shown this population quickly and competently adopted digital health tools to reduce barriers to care and improve disease management.
Participants have reported a variety of physical, cognitive, and social and emotional benefits with virtual, group-based movement therapy. These include improvements in balance, mobility, focus, stress level, mood, and more. A neuroscience-based curriculum administered by specially-trained instructors can deliver an engaging, fully digital program geared toward helping people with cognitive decline stay healthy, connected, and independent at home.
A vast majority of participants in these types of programs experience benefits such as reduced falls, hospitalizations, and emergency visits – as well as improvements in their overall quality of life. These outcomes help reduce costs for individuals, caregivers, and plans alike.
Plans must act now: a new approach to brain health is needed
As risk rises, so too does the urgent need for plans to act today – before it is too late.
With nearly 7 million people in the United States 65 and older currently living with Alzheimer’s disease or other dementias — a number estimated to increase to nearly 14 million by the year 2060, healthcare costs related to this group will have a significant impact on payers and others bearing Medicare claim risk.
As evidence accumulates around the promise of virtual, non-pharmacologic therapies to improve care, reduce the impact of cognitive decline, and lower costs for individuals with Alzheimer’s disease and other dementias, it is critical that health plan leaders reconsider what’s possible.
Recognizing the tangible value of investing in these therapeutic interventions can improve the lives of patients and reduce costly forms of healthcare utilization.
About the author
Cynthia Benjamin is co-founder and chief strategy and innovation officer of Together Senior Health, a digital therapeutics and brain health company.