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Economic analysis
survey studies often related to dementia rather
than AD. 122;130 Cost estimates tend to be based on
data analysis (involving assumptions) and
modelling, to determine estimates of care (based
on various inputs to packages of care) over time,
namely annual average cost estimates.
Selected UK cost studies
Gray and Fenn 126 present findings from a costing
study using a burden of illness (BOI) framework.
The study uses aggregate data on relevant cost
areas (hospitalisation, primary care) together with
epidemiological data on AD to estimate the costs
associated with AD. Estimates are based on a ‘topdown’
approach to the allocation of costs. The
analysis, like many BOI studies, is not precise and
is subject to a number of fairly broad assumptions
and calculations; however, the findings are
illustrative of the level of cost expected in AD,
largely at an aggregate level. Gray and Fenn
suggest that it costs ~£1.04 billion (1990–91
prices) to provide healthcare and social services
support to people aged ≥ 65 years with AD in
England. The study finds that most of the cost
burden, around 65%, is on payments for
residential and nursing home care, with a further
25% of total costs associated with hospital-based
care. The BOI study presents estimates by age
grouping, but does not consider cost estimates by
disease severity. The estimates from Gray and
Fenn were used in the cost-effectiveness study by
Fenn and Gray, 91 where they are updated to 1997
prices, presenting an estimate of the cost per AD
patient in long-term institutional care at £18,162,
while the cost of patients in a home setting was
estimated at £1899 (to include GP visits,
outpatient attendance, day care and respite care,
short inpatient stays and services such as meals on
wheels).
Costing studies from the PSSRU have been
published to inform on the costs of care for the
elderly and demented patient population. 118,120,153
The PSSRU research used data from the OPCS
disability survey (1985–86) to estimate the
proportions of people with cognitive impairment
in different types of care – private households,
residential and nursing homes, and hospitals.
Costs of care packages for each of these types of
care were then calculated using a variety of cost
sources, some dating back to the early or mid
1980s, with costs updated to 1992–93 prices. The
OPCS survey included all people with dementia
regardless of underlying cause; the proportion of
people with AD was not recorded, and cognitive
disability was measured using the OPCS SEVINT
scale. Stewart 121 drew together a number of work
TABLE 57 Estimate of cost of care for people with dementia
aged ≥ 75 years, by setting of care
Care location Estimated
annual cost
(1996 prices)
(£)
Living alone in a private household 12,331
Living with others in private household 14,132
Residential accommodation 24,801
Source: Stewart. 121
areas, 118,120 to present cost estimates for those
elderly and demented patients over 75 years old
by three categories of residential setting: living
alone in private household, living with others in a
private household and living in residential
accommodation (see Table 57).
There remains some uncertainty over the
components of cost included in the cost estimates
presented by Stewart. The discussion paper states
that the cost items included are direct costs of
formal health and social care with informal care
excluded, but data used by Stewart are from
Kavanagh and colleagues, 120 which include
informal care and accommodation costs.
Data from Kavanagh and colleagues, 120 which
forms the basis for the cost estimates presented by
Stewart, 121 are presented in Tables 58 and 59. It
can be seen from the data that around 23% of the
care costs (e.g. living alone/with others in a private
household) fall on the NHS and PSS budget.
Stewart 121 has also transformed the SEVINT
scores (13-point scale) onto the MMSE scale (30
points) in order to calculate cost estimates by
MMSE score (category) (see Table 60), but not
every point on the MMSE score is represented.
Therefore, it is unclear how the costs for AD
disease severity levels, which are each defined by a
particular range of the MMSE, were derived. The
cost estimates presented by Stewart were based on
the proportions of patients in each category of
care (with residential care subdivided by four
further settings of care) and cost data for care in
each location, with estimates updated to 1996
prices.
O’Shea and O’Reilly 152 present findings from a
BOI study of dementia, incorporating direct,
indirect, formal and informal costs. They present
findings for costs across acute hospital care,
psychiatric care, family care, primary and