, Volume 24, Issue 3, pp 265–280

Functional Impairment, Healthcare Costs and the Prevalence of Institutionalisation in Patients with Alzheimer’s Disease and Other Dementias

  • Jerrold Hill
  • Howard Fillit
  • Simu K. Thomas
  • Sobin Chang
Original Research Article



The progressive decline in functional status for patients with Alzheimer’s disease and other dementias (ADOD) is well documented. However, there is limited information on the economic benefits of interventions improving functional status in an ADOD population. This study estimated the relationship between the degree of functional impairment in patients with ADOD and their healthcare costs and prevalence of institutionalisation.


Retrospective cross-sectional analyses of the Medicare Current Beneficiary Survey (MCBS) were performed. A nationally representative sample of Medicare beneficiaries with ADOD was identified from the 1995–8 waves of the MCBS (n = 3138): 34% in the community, 57% institutionalised and 9% residing in both settings during the year. Three measures of functioning were used: the number of activities of daily living (ADLs) and independent ADLs (IADLs) impaired; an index summarising number and severity of ADL and IADL impairments; and the Katz Index of ADLs. Healthcare costs included costs for all healthcare services received in all settings, regardless of whether they were covered by insurance or paid out of pocket. The relationships between each measure of impairment and healthcare costs and prevalence of institutionalisation were estimated using linear and logistic regression.


Healthcare costs (1995–8 values) for all ADOD patients increased by $US1958 (p < 0.001) for each additional ADL impairment and $US549 (p = 0.073) for each additional IADL impairment. For community-dwelling ADOD patients, healthcare costs increased by $US1541 (p < 0.001) for each additional ADL and $US714 (p = 0.022) for each additional IADL. Costs also increased by severity on the summary index and the Katz Index. Odds of institutionalisation also increased by the three measures of functional impairment.


Although relationships between function and costs have been described previously, the exact nature of these relationships has not been investigated solely in patients with dementia. The data from this study suggest a strong relationship between functional impairment and healthcare costs, specifically in patients with dementia. Even IADL impairments, which are common in mild to moderate dementia, may significantly raise costs. The results suggest that therapies and care management that improve functioning may possibly reduce other healthcare costs.

Supplementary material

40273_2012_24030265_MOESM1_ESM.pdf (97 kb)
Supplementary material, approximately 99 KB.

Copyright information

© Adis Data Information BV 2006

Authors and Affiliations

  • Jerrold Hill
    • 1
  • Howard Fillit
    • 2
    • 3
  • Simu K. Thomas
    • 4
  • Sobin Chang
    • 4
  1. 1.HEROE (Health Economics Research and Outcomes Evaluation)JeffersonvilleUSA
  2. 2.Institute for the Study of AgingNew YorkUSA
  3. 3.Department of Geriatrics and Adult DevelopmentMt. Sinai Medical CenterNew YorkUSA
  4. 4.Novartis PharmaceuticalsEast HanoverUSA

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