Effect of Early-Stage Alzheimer's Disease on Household Financial Outcomes

Published in: Health Outcomes, Issue 1, pages 18–29 (January 2020). doi: 10.1002/hec.3962

Posted on RAND.org on March 10, 2020

by Carole Roan Gresenz, Jean M. Mitchell, James V. Marrone, Howard J. Federoff

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Significant limitations and rapid declines in financial capacity are a hallmark of patients with early-stage Alzheimer's disease (AD). We use linked Health and Retirement Study and Medicare claims data spanning 1992–2014 to examine the effect of early-stage AD, from the start of first symptoms to diagnosis, on household financial outcomes. We estimate household fixed-effects models and examine continuous measures of liquid assets and net wealth, as well as dichotomous indicators for a large change in either outcome. We find robust evidence that early-stage AD places households at significant risk for large adverse changes in liquid assets. Further, we find some, but more limited, evidence that early-stage AD reduces net wealth. Our findings are consequential because financial vulnerability during the disease's early-stage impacts the ability of afflicted individuals and their families to pay for care in the disease's later stage. Additionally, the findings speak to the value that earlier diagnosis may provide by helping avert adverse financial outcomes that occur before the disease is currently diagnosable with available tools. These results also point to a potentially important role for financial institutions in helping reduce exposure of vulnerable elderly to poor outcomes.

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