Evaluation of the Fiscal Costs and Consequences of Alzheimer’s Disease in Germany: Microsimulation of Patients’ and Caregivers’ Pathways

Abstract

BackgroundAlzheimer’s disease is a severe condition, impacting individual’s wellbeing and independence in daily activities. Informal care provision is common and of great value to societies but is not without negative externalities to households and the broader economy.ObjectivesEstimate the lifetime incremental fiscal consequences of Alzheimer’s disease in community-based individuals and their informal caregivers.SettingThe fiscal consequences of Alzheimer’s disease was modeled using the German government and social security perspective.ParticipantsSynthetic cohort containing 1,000 pairs of people with Alzheimer’s disease and their informal caregivers, compared to 1,000 demographically identical pairs from the general population.DesignDisease progression was modeled using published equations and a state-transition microsimulation framework. Labor participation, financial support and paid taxes were estimated according to cognitive decline and caregiving responsibilities using German labor statistics and tax rates. Healthcare costs were sourced from several German publications. Costs and life-years were discounted at 3% annually.MeasurementsResults are reported as lifetime incremental differences in total tax revenue and transfer payments between the cohort affected by Alzheimer’s disease and their general population analogues.ResultsThe Alzheimer’s disease-affected pair was associated with net incremental fiscal losses of €74,288 ($85,037) to the German government and social security over the lifetime of people with Alzheimer’s disease. Most costs were lost taxes on employment earnings (48.4%) due to caregivers working reduced hours. Caregivers were estimated to earn €56,967 ($65,209) less than their general population analogues. Financial support for informal and formal care accounted for 20.4%, and medical healthcare costs represented 24.0% of the incremental fiscal losses. Sensitivity analyses confirmed the robustness of the model results. In a cohort with early onset Alzheimer’s disease, incremental fiscal losses were predicted to be €118,533 ($114,209) over the lifetime of people with Alzheimer’s disease.ConclusionsAlzheimer’s disease externalities profoundly impact public economics for governments and should be considered to inform policy making and healthcare planning.