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Study’s findings put dementia costs in focus


A new analysis puts the cost of caring for residents with dementia above earlier estimates, which advocates and providers say highlights the need for sustainable funding.

The study found there was a significant difference in the annual residential care costs for residents with dementia ($82,300) compared to those without the disease ($73,200).

Once other healthcare costs were factored in, the total cost of providing health and residential aged care was $88,100 annually for residents living with dementia, compared to $83,800 for those without.

“Despite the higher residential care costs for people with dementia, lower healthcare utilisation meant that there was no significant difference in total resource use (residential care plus health care) costs by dementia status,” according to the findings published in the journal Geriatric Psychiatry.

The study analysed data from 541 residents in 17 facilities across four states.

Residential aged care costs, which accounted for 94 per cent of the total cost of caring for people with dementia, was based on Aged Care Funding Instrument data.

The researchers said that lower healthcare costs for residents with dementia were driven by lower hospitalisations, emergency presentations and medical services.

The higher rates of comorbidities among residents without dementia could partly explain their higher rate of hospitalisations, the study said.

In terms of the impact that specific aged care environments might have on dementia costs, such as facility size or dementia-friendly elements, the researchers said this was beyond the scope of the analysis.

Lead author Emmanuel Gnanamanickam of Flinders University said it was possible that different care environments, facilities or providers will have an influence on costs but this needed to be looked at separately.

“Cost variations due to facility factors such as type and size of both care facilities and providers should be looked at separately with other methods,” he told Australian Ageing Agenda.

Last year geriatrician Susan Kurrle reported latest findings showing home-like cottage models were more cost effective than traditional residential care.

“For people with dementia, the home-like model of care… showed significantly higher quality of life, lower hospitalisations, particularly presentations to the emergency department, and lower use of psychotropic medication,” Professor Kurrle said in a speech to CEDA.

Stephen Judd, chief executive officer of dementia-specialist aged care provider HammondCare, said governments should look at greater investment in preventative measures such as cottage respite.

He said previous studies showed that while the costs per place for cottage respite were higher these programs effectively delayed or deferred premature entry to residential care, thereby delivering a financial saving to the government in the long run.

Dr Judd, who is currently writing a book chapter on finance and dementia care, said studies in the US had shown that small-scale homes could provide high quality of life at a level of profit and return on investment comparable to traditional aged care facilities.

Responding to the latest analysis, Dementia Australia argued that the cost of dementia care could be reduced with better aged care staff training and implementation of dementia-friendly principles.

“This research reinforces the need for more strategic investment in dementia services to avoid an escalation in costs that will be unsustainable,” said CEO Maree McCabe.

Aged and Community Services Australia said the analysis underscored how acute aged care funding needs will become if government failed to address the sector’s sustainability.

“Research like this should become part of a conversation about community expectations for services and support for people living with dementia and how those expectations can be met now and in the future,” said ACSA chief Pat Sparrow.

A number of errors in the presentation of results have been identified in the paper since it was published online last week. Dr Gnanamanickam told Australian Ageing Agenda these “minor inconsistencies” were being corrected.

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