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Cost of care for persons with dementia: using a discrete-time Markov chain approach with administrative and clinical data from the dementia service Centres in Austria

Author

Listed:
  • Alexander Braun

    (University of Applied Sciences Krems
    Danube University Krems)

  • Paulina Kurzmann

    (Danube University Krems)

  • Margit Höfler

    (Danube University Krems)

  • Gottfried Haber

    (Danube University Krems
    Oesterreichische Nationalbank)

  • Stefanie Auer

    (Danube University Krems)

Abstract

Background There is growing evidence that the cost for dementia care will increase rapidly in the coming years. Therefore, the objective of this paper was to determine the economic impact of treating clients with dementia in outpatient Dementia Service Centres (DSCs) and simulate the cost progression with real clinical and cost data. Methods To estimate the cost for dementia care, real administrative and clinical data from 1341 clients of the DSCs were used to approximate the total cost of non-pharmaceutical treatment and simulate the cost progression with a discrete-time Markov chain (DTMC) model. The economic simulation model takes severity and progression of dementia into account to display the cost development over a period of up to ten years. Results Based on the administrative data, the total cost for treating these 1341 clients of the DSCs came to 67,294,910 EUR in the first year. From these costs, 74% occurred as indirect costs. Within a five-year period, these costs will increase by 7.1-fold (16.2-fold over 10 years). Further, the DTMC shows that the greatest share of the cost increase derives from the sharp increase of people with severe dementia and that the cost of severe dementia prevails the cost in later periods. Conclusion The DTMC model has shown that the cost increase of dementia care is mostly driven by the indirect cost and the increase of severity of dementia within any given year. The DTMC reveals also that the cost for mild dementia will decrease steadily over the time period of the simulation, whereas the cost for severe dementia increases sharply after running the simulation for 3 years.

Suggested Citation

  • Alexander Braun & Paulina Kurzmann & Margit Höfler & Gottfried Haber & Stefanie Auer, 2020. "Cost of care for persons with dementia: using a discrete-time Markov chain approach with administrative and clinical data from the dementia service Centres in Austria," Health Economics Review, Springer, vol. 10(1), pages 1-9, December.
  • Handle: RePEc:spr:hecrev:v:10:y:2020:i:1:d:10.1186_s13561-020-00285-w
    DOI: 10.1186/s13561-020-00285-w
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    References listed on IDEAS

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    1. Bernard Berg & Werner Brouwer & Marc Koopmanschap, 2004. "Economic valuation of informal care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 5(1), pages 36-45, February.
    2. Drummond, Michael F. & Sculpher, Mark J. & Claxton, Karl & Stoddart, Greg L. & Torrance, George W., 2015. "Methods for the Economic Evaluation of Health Care Programmes," OUP Catalogue, Oxford University Press, edition 4, number 9780199665884.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 26th October 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-10-26 12:00:03

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    More about this item

    Keywords

    Cost and cost analysis; Dementia; Discrete-time Markov chain; Administrative data; Cost simulation;
    All these keywords.

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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