The net cost of Alzheimer disease and related dementia: a population-based study of Georgia Medicaid recipients.

The objective of this study was to estimate the direct medical cost of Alzheimer disease (AD) and related dementia to the Georgia Medicaid program. A retrospective, cross-sectional, matched control group design was used. AD cases 50 years of age and older were identified by using International Classification of Diseases (9th edition, Clinical Modification) diagnosis codes from 1994 Georgia Medicaid administrative claims files. For every case, three age- and gender-matched non-AD controls were selected. Differences in average recipient Medicaid expenditures between cases and controls were estimated using weighted least squares regression analysis, adjusting for age, gender, race, Charlson comorbidity index, Medicare eligibility, and months of Medicaid eligibility. A total of 8,671 AD cases were identified (prevalence, 4.4%). The average adjusted annual Medicaid expenditure per AD recipient was $14,492 (U.S.). The net (i.e., excess) average annual Medicaid cost per AD recipient (i.e., the difference in adjusted mean expenditures between cases and controls) was estimated to be approximately $8,200. Excessive nursing home expenditures accounted for most of the additional cost of treating dementia (> 85%), although inpatient hospital, physician, outpatient, and prescription drug expenditures also were higher among patients with AD. Based on these estimates, Georgia Medicaid is projected to spend almost $70 million annually for AD and related dementia. The excessive cost attributable to AD poses a significant burden to the Georgia Medicaid program.