Projection of net savings to U.S. state Medicaid programs from reduced nursing home utilization due to an Alzheimer’s treatment

Abstract

AbstractBackgroundThe approval of a disease‐modifying Alzheimer’s treatment could provide relief to U.S. state budgets that were hit hard by the COVID‐19 pandemic, as mostly Medicare would cover treatment cost, whereas Medicaid would see savings from reduced nursing home utilization.MethodWe project savings from 2021 to 2040 with a simulation model.ResultTreatments would avoid payments of up to $186 billion for around 1.1 million nursing home patient‐years, an average 5.06% relative reduction of Medicaid spending on nursing home care. Higher per capita savings were projected for older states, those with higher Medicaid payment rates, those with more nursing home residents covered by Medicaid, and those with a lower federal contribution (Figure).ConclusionTreatments would avoid payments of up to $186 billion for around 1.1 million nursing home patient‐years, an average 5.06% relative reduction of Medicaid spending on nursing home care. Higher per capita savings were projected for older states, those with higher Medicaid payment rates, those with more nursing home residents covered by Medicaid, and those with a lower federal contribution.