What does dementia cost?

September 12, 2014

by Martin Knapp

What is the cost of dementia? This is the question that a bunch of us at PSSRU at LSE recently addressed, finding that the answer was very high – more than £26 billion each year in the UK – and with some intriguing results when you look at the detail.

The Alzheimer’s Society funded our study, and launched our findings at one of their conferences the other day. The Society also funded work led by Professor Martin Prince at King’s College London that generated new estimates of the prevalence of dementia. In both cases – for costs and for prevalence – we included a comparison with numbers we had calculated seven years ago in the original Dementia UK report.

Big numbers

Our £26 billion calculation for the total cost of dementia in the UK is perhaps more easily comprehended by re-couching it as an average: for each of the approximately 816,000 people living with dementia in the UK today the cost is £32,250 each year. Of course, for some people the cost will be much less, but for others – especially those with more severe symptoms – it will be considerably more. A summary of our findings can be found in the report published on the day of the conference, and the fuller details will be available quite soon.

Unpaid care

A substantial proportion – as much as 44% – of this overall cost is the estimated value of unpaid care provided by family members and others. It is famously hard to calculate the cost of unpaid care, partly because it is hard to estimate the number of hours that someone provides such care in a typical day, and partly because it is not clear what monetary value to attach to those hours. Adelina Comas-Herrera discusses these challenges in her recent blog. Nevertheless, even when we changed the assumptions that we made about hours and their economic value, we still found that the contribution of unpaid carers to the overall cost of dementia is enormous.

Another 39% of the overall cost of dementia is attributable to social care services delivered by paid staff rather than unpaid carers. But because social care is not free for people who have more than quite a modest level of wealth, individuals with dementia and their families are themselves paying just over half of this cost. Overall, we estimate that two-thirds of the cost of dementia is borne by people with the illness or their families, either directly in terms of charges for services or indirectly through giving up an enormous amount of time providing personal and other care.

Changes since 2007

In our full report, which will be available in the coming weeks – again published by the Alzheimer’s Society – we show how costs have changed since 2007. In our 2014 calculations we were able to include elements that were missing in 2007, such as the costs of research, advocacy and police involvement (to find missing persons). But even after adjusting for this difference in coverage, and also for price inflation, we reckon that the total cost of dementia has increased by 24% in real terms over the 7-year period.

We can only provide a rough guess as to the reasons for this growth. Probably about two-thirds of the increase in total UK cost can be attributed to growth in the number of people with dementia: from 684,000 in the 2007 report to 816,000 today. The other third is, we think, mainly due to an increase in cost per person, representing a real increase in the amount of care and support that people with dementia receive. Some of that increase has come from better access to health and social care support, particularly for people reaching the severe stage of their illness, and some from unpaid care.

We should emphasise that comparisons across time are always fraught with difficulties unless the methods used to generate estimates are identical across the two years, and they were not identical in this case. Nevertheless, this kind of growth in total cost, and the probable breakdown of the growth between different explanations, certainly warrants more discussion.

Good and bad costs

I don’t think any economic theorist has made the distinction between ‘good costs’ and ‘bad costs’, but the distinction seems rather important in this context. The so-called bad costs of dementia are associated with care and treatment that occurs because diagnosis of the disorder is missed or late, or because good quality care is not available, or because of an unplanned crisis admission into hospital, or because breakdown in community support means earlier admission into a care home than the individual with dementia really wants.

On the other hand, there are good costs. These reflect the fully appropriate treatment and care responses to the carefully assessed needs of the individual, following consultation around their preferences. Good costs will be associated with delivery of treatment and care that is evidence-based – where well-conducted research has demonstrated effectiveness (and ideally also cost-effectiveness).

What we see too often in the dementia field is that the balance between bad and good costs is out of whack. Although it is impossible to put numbers onto these notional cost categories, it is blindingly obvious that too many resources are eaten up as ‘bad’ costs and not enough are being used in the form of ‘good’ costs.

Although it would be good to see more health and social care resources overall going into the support of people with dementia, we all recognise that budgets are very tight. And they are likely to become even tighter as the UK population ages over the next few decades leading to rising numbers of people needing treatment and care for dementia.

It is therefore essential that we use evidence from research to help shift the balance from bad to good, and we can help to do that both by generating new evidence on what works, and by making sure that the messages from that research are reaching the people who are in a position to use it wisely. It is the good costs that achieve better health and better quality of life for people with dementia and their carers.

About the author

Professor Martin Knapp is Professor of Social Policy and Director of PSSRU at the LSE. He is also Director of the NIHR School for Social Care Research.

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