Review of the 2025 Literature on the Economics of Alzheimer’s Disease and Alzheimer’s Disease-Related Dementias

This second annual targeted review of the literature on the economics of Alzheimer’s disease and Alzheimer’s disease-related dementias (AD/ADRD) consisted of 52 impactful articles from 2025. A searchable database of each article, including its key results, cohort information, and related Coordinating Center research priorities, can be found here. 

This review contains articles on the major themes identified in the previous review (i.e., caregiving, cost of care, long-term services and supports, healthcare and payment policy, health disparities) in addition to a new theme focused on economic evaluations of anti-dementia therapeutics. Formal healthcare and payment policy was the most commonly discussed topic within the literature, centering on how various payment models impacted quality of care. The relationships between AD/ADRD severity and caregiving burden or cost of care were often examined. The impact of socioeconomic demographics on anti-AD medication access, end-of-life care, an individual’s cognitive health, and broader dementia prevalence was explored across multiple themes. 

Formal Healthcare Models and Payment Policy

Payment policies influence the access to and quality of formal care for patients with AD/ADRD, ultimately impacting their health outcomes. Skilled nursing facilities (SNFs) and long-term care (LTC) facilities constitute a significant share of formal patient care. Yun et al. found that the quality of resident care improved (i.e., reduced emergency department visits or hospitalizations) when residents received care from a physician who practiced primarily in nursing homes.¹ Chen and Jang, exploring the relationship between self-report quality of care measures and care costs, found that higher self-reported quality of care was significantly associated with lower Medicare costs, especially for people living with dementia (PLWD).²

Accountable care organizations (ACOs) are a multidisciplinary coordinated care model that payers use to improve care quality. Wang et al. found that ACO-attributed Medicare beneficiaries were more likely to enter high-quality SNFs than those enrolled in traditional Medicare.³ However, patients with AD/ADRD were less likely to enter high-quality SNFs regardless of payer status.³ This disparity may be due to the higher costs associated with AD/ADRD care in conjunction with Medicare plans not incentivizing SNFs to care for this population.³ Despite racial/ethnic minority populations having greater ACO-associated cost savings, patients who were White, did not have dual Medicare-Medicaid coverage, and lived in neighborhoods with low social vulnerability were more likely to receive care through ACOs.^4,5 Broadly, nursing homes with a higher proportion of Black or Hispanic residents were less likely to have AD special care units; however, this disparity was smaller in states with higher Medicaid payment-to-cost ratios.⁶

The US nursing home industry relies heavily on Medicaid financing.⁷ In 2003, federal reform aimed to restrict states that were misallocating nursing home Medicaid funds. However, Indiana circumvented the reform by encouraging county hospitals to municipalize private nursing homes, which financially incentivized the hospital systems to increase the care volume (i.e., number of Medicaid days) provided. While no change in each nursing home’s quality was observed following municipalization, the care volume increase was concentrated in the lowest-quality nursing homes, essentially expanding lower-quality nursing home care.⁷ Payer policy also influences the ability of older adults to age in place. In one study, Cui et al. found that racial/ethnic minorities used telemedicine more often than other PLWD to assist with aging in place, implying that removing the increased access to telemedicine spurred by COVID-19 restricts access to high-quality home-based care for these vulnerable groups.⁸ Living in rural areas can compound care accessibility issues. Thunell et al. found the availability of 1915(c) Medicaid waivers for paid family caregiving was associated with the likelihood of only receiving family care, and not any formal care, particularly for PLWD in rural areas._⁹

The type of Medicare plan held by a PLWD also impacts access to and type of care received. Medicare Advantage (MA) plans are incentivized to prioritize preventative care, as well as document all diagnoses to increase their risk-adjusted per-member-per-month payment, which would explain why older adults with MA, especially PLWD, were more likely to attend an Annual Wellness Visit than those with traditional Medicare (TM).¹⁰ However, even though MA disenrollment rates decreased from 2010 to 2022, they still remained higher than disenrollment rates from TM.¹¹ When nursing homes started participating in an Institutional Special Needs Plan (I-SNP), their long-stay residents often switched from MA or TM to the I-SNP, which was associated with reduced hospitalization rates.¹²

Cost of Care

Accurately understanding the true costs and economic impact of dementia in the United States and around the world is vital to making decisions about policy, resource allocation, and research priorities. Gracner et al. found that the aggregate lifetime cognitive impairment burden for adults in the United States was $627 billion, with 41% attributable to mild cognitive impairment (MCI).¹³ Tahimi Monfared et al. found that while the estimated societal cost burden of AD (including intangible costs to patients and caregivers, costs to businesses, costs of unpaid caregiving, and direct costs) was almost double those of MCI, although costs for MCI were still considerable.¹⁴ One small retrospective study of electronic health records data found that patients with advanced AD had significantly higher AD-related healthcare resource utilization than those with early AD but not significantly higher all-cause healthcare resource utilization.¹⁵

International studies in Europe and Asia also found that costs increased with AD severity.^16-18  However, type of care costs may vary across disease progression. A German study found that patients with AD had lower costs for physician treatments and medical aids than those with MCI or subjective cognitive decline, despite overall higher formal and informal care costs, perhaps due to a shift in disease care complexity, lack of mobility, difficulty expressing symptoms, or increased reliance on informal caregiving.¹⁶  When evaluating the economic burden of inpatient AD care in China’s Hubei province, Chen et al. found that advanced age, commercial insurance, and comorbidities (i.e., infections, fractures, and cardiovascular disease) were associated with increased costs.¹⁹ The average cost per patient with AD increased from 2014 to 2019 in Italy, with 87% of the total annual cost associated with hospital admissions.²⁰ Araya-Ríos et al. reported the first utility weights for the Alzheimer’s Disease 5 Dimensions Instruments for use in the Chilean population, allowing for future estimates incorporating quality-adjusted life years.²¹ The number of dementia-attributed disability-adjusted life years (DALYs) in the Minas Gerais state of Brazil derived from the AD/ADRD cases reported to the Brazilian Ministry of Health was lower than those found in the Global Burden of Disease Study, which indicates possible underreporting.²² 

Health Disparities 

Multiple studies explored the relationship between socioeconomic factors and cognitive health. Cognitively impaired individuals, like those with AD/ADRD, often struggle to make cogent financial decisions and have resultantly poor financial performance.^23,24 Increased socioeconomic status (SES) was associated with a reduced risk of AD/ADRD.²⁵ SES may influence dementia risk through labor force participation. In the years prior to a young onset AD diagnosis, individuals in Denmark were more likely to be unemployed or use long-term sick leave than matched controls.²⁶ However, no clear relationships between paid employment or volunteering history and preclinical AD (i.e., no detectable MCI but some amyloid accumulation) were observed, although this may be due to amyloid levels being an inappropriate disease surrogate when assessing short-term economic outcomes.²⁷ In a study examining how stressful life events influence AD pathology and neurodegeneration in cognitively unimpaired individuals at high AD/ADRD risk, economic stressors (e.g., unemployment, financial loss) were related to gray matter volume loss, while grief-related stressors were related to AD pathophysiology (i.e., Aβ, p-tau, or neurogranin).²⁸ The neurodegenerative effects due to unemployment mainly affected men and those with higher education, while financial loss mostly affected women.²⁸

Educational attainment is shown to have a protective effect relating to AD/ADRD risk and decline. Increased educational level was linked with reduced incidence and delayed onset of AD/ADRD,²⁹ and increased word recall in older adults.³⁰ Cao et al. found that 17% of the protective effect that education has on cognitive function later in life was due to reduced occupational hazard exposure (e.g., extremely bright or inadequate lighting, extreme temperatures) and not from increased cognitive complexity exposure.³¹ 

Caregiving

The financial burden of spouses, children, or friends caring for PLWD is a significant portion of the total costs associated with AD/ADRD. Vilaplana-Pireto and Oliva-Moreno found that each informal caregiver for a person with AD in Spain provided an average of 4,596 to 5,430 hours of care annually, which, when valued over the whole population, is larger than the entire budget for Spain’s LTC system.³² Caregivers from minority populations are disproportionately burdened. In the United States, the total estimated economic burden of AD/ADRD, mainly driven by unpaid caregiving, on African American and Latino adults was projected to increase to $1.7 trillion in 2060, larger than the projected $1.4 trillion cost on the larger White population.³³ This disproportionate burden is likely due to African American and Latino communities experiencing increased prevalence rates of AD/ADRD and associated comorbidities along with reduced access to high-quality health care.³³

Similar to costs, caregiver burden is related to AD severity. Kraake et al. found that poorer social functioning, common in patients with more severe AD, was associated with increased caregiver burden, perhaps due to the patient’s increasing dependence on the caregiver for assistance with activities of daily living and social interaction.³⁴ Close familial ties (e.g., parent, spouse) between the individual living with dementia and their caregiver was also found to be associated with increased caregiver burden.^35,36

Caregivers of early AD and MCI reported a low financial impact of caregiving and had better quality-of-life scores than the caregivers of patients with advanced AD.^37,38 Despite increased burden being associated with more advanced disease stage, nonetheless, one study reported substantial burden associated with caring for individuals with MCI, regardless of whether the individual progressed to dementia.³⁹ 

Long-term Services and Supports 

Home and community-based services tailored for AD/ADRD care needs are required to enable older adults across the disease spectrum to continue living in their communities for as long as possible. Lenzen et al. used a discrete choice experiment survey to design a home-based occupational therapy dementia community program in Australia, finding that high value was placed in the program improving the patient’s level of independence and dementia-related behavior.⁴⁰ Home health care utilization increased for PLWD from 2010 to 2020 and then decreased through 2022, perhaps due to home care agencies’ staffing shortages during the COVID-19 pandemic.⁴¹ Hanchate et al. found that following pandemic-related telemedicine expansion in March 2020, both telemedicine and home-based medical care (HBMC) visits increased. However, the HBMC visit increase was concentrated in regions with high HBMC provider availability by White PLWD and not Hispanic or Black PLWD.⁴²

End-of-life care is an important consideration for all older adults but can be challenging to discuss with PLWD. Studies by Xie et al. and Gruber et al. found that PLWD who were ethnic/racial minorities, had lower SES, or lived in rural areas received less palliative care, despite palliative care use being associated with reduced costs.^43,44 For-profit hospice enrollment, rather than nonprofit hospice enrollment, was associated with an increased length of stay, as well as an increased likelihood to exceed the Medicare reimbursement cap, indicating that policies to limit marginal hospice use may be insufficient.⁴⁴

PLWD are at a higher risk of being prescribed potentially inappropriate medication, which is predictably associated with higher healthcare resource utilization and total healthcare costs.⁴⁵ One study found nearly a third of patients with both AD/ADRD and insomnia were prescribed potentially inappropriate oral sedative hypnotics and atypical antipsychotics, a larger portion than the approximately 20% of patients with insomnia alone who were prescribed these medications.⁴⁵ Despite this prevalence of inappropriate medication usage, Coe et al. found that older adults with AD/ADRD were less likely to be eligible for Medicare medication therapy management or receive a comprehensive medication review than those without dementia.⁴⁶

Therapeutics

The development of anti-dementia therapeutics should center patient priorities and access. When asked, patients and caregivers identified that the most important anti-AD treatment characteristics were its ability to improve symptoms and its safety profile.^37,47 Caregivers were generally more concerned about potential adverse events than patients, who focused on the potential benefit.³⁷ However, the high cost of anti-AD treatments (e.g., lecanemab) was consistently identified as an access issue.^37,47,48 Relatedly, anti-AD treatment was generally utilized more by patients with higher SES.^48,49 Access to lecanemab, which requires access to a positron emission tomography scan and an infusion center, is affected by socioeconomic and geographic factors.⁴⁷ Patients in rural areas were less likely to receive anti-AD medication.^49,50 Perez-Arce et al. conducted a discrete choice experiment to investigate Americans’ willingness to pay for an AD treatment that reduces disease progression by 30%, finding that respondents would be willing to pay $252 per year or .59% of their earned income on average.⁵¹ This would make the average valuation of AD treatment between $33.7 and $51.4 billion annually.⁵¹ The high cost and perceived modest benefits of lecanemab make its valuation highly influenced by patients’ and caregivers’ financial circumstances. However, improving access to effective treatments would be beneficial both to patients and society by potentially reducing healthcare spending. This idea was supported by an article using a machine learning model to study the economic effects of using anti-dementia drugs. The investigators found that patients who took these treatments, specifically cholinesterase inhibitors, had significantly reduced Medicare and inpatient costs.⁵²

This Review of the 2025 Literature on the Economics of Alzheimer’s Disease and Alzheimer’s Disease Related Dementias report was prepared by Rose Li and Associates, Inc. (RLA) under contract to the National Bureau of Economic Research (NBER) Coordinating Center on the Economics of AD/ADRD Prevention, Treatment, and Care (U54 AG090084). RLA associates who authored this document include Colette Li and Meghan Walsh. The views expressed in this document do not necessarily reflect those of the sponsoring agency.

References

1 Yun, H., Unruh, M. A., Qian, Y., Zhang, Y. & Jung, H.-Y. Clinicians who practice primarily in nursing homes and the quality of care for residents with Alzheimer disease and related dementias. JAMA Health Forum 6, e252465 (2025). 

2 Chen, J. & Jang, S. Top-rated health care and ease of access to medications linked to lower Medicare and ADRD costs. Med Care 63, 405 (2025). 

3 Wang, H., Kosar, C., Rahman, M. & Mor, V. Do Medicare beneficiaries under accountable care or Medicare Advantage use lower quality nursing homes? J Am Geriatr Soc 73, 1551–1557 (2025). 

4 Jang, S. & Chen, J. Accountable care organizations and Medicare payments for residents with ADRD in disadvantaged neighborhoods. Alzheimers Dement 21, e70067 (2025). 

5 Zhang, J. J. et al. End-of-life care and health care spending for Medicare beneficiaries with dementia in accountable care organizations. JAMA Health Forum 6, e250731 (2025). 

6 Xu, H. et al. Medicaid payments and racial and ethnic disparities in Alzheimer disease special care units. JAMA Netw Open 8, e2525057 (2025). 

7 Hackmann, M. B., Rojas, J. S. & Ziebarth, N. R. Creative financing and public moral hazard: evidence from Medicaid and the nursing home industry. Working Paper No. (National Bureau of Economic Research, 2025) https://doi.org/10.3386/w34118 

8 Cui, M. et al. Higher than expected telemedicine use by racial and ethnic minority and cognitively impaired Medicare beneficiaries. Health Aff Sch 3, qxae175 (2025). 

9 Thunell, J., Parrish, E. M. & Miller, K. E. M. Shifting care patterns: how Medicaid policies shape family and formal care use. Alzheimers Dement 21, e70715 (2025). 

10 Zhang, Z., Schoenborn, N. L., Miller, K. E. M., Wolff, J. L. & Polsky, D. The role of Medicare insurance coverage type in annual wellness visits: a comparison between traditional Medicare and Medicare Advantage plan. J Gen Intern Med https://doi.org/10.1007/s11606-025-09825-8 (2025) 

11 Yun, H. et al. Disenrollment from special needs and other Medicare Advantage plans among nursing home residents. JAMA Netw Open 8, e2523973 (2025). 

12 Rahman, M., McGarry, B., White, E. M., Grabowski, D. C. & Kosar, C. M. Is managed care effective in long-term care settings? evidence from Medicare institutional special needs plans. Working Paper No. 34235 (National Bureau of Economic Research, 2025) https://doi.org/10.3386/w34235 

13 Gracner, T. et al. The burden of cognitive impairment. Alzheimers Dement 21, e70436 (2025). 

14 Tahami Monfared, A. A. et al. Integrating intangible costs into societal cost estimates of Alzheimer’s disease. J Alzheimers Dis 106, 1288–1299 (2025). 

15 Fazio-Eynullayeva, E. et al. Real-world healthcare resource utilization of Alzheimer’s disease in the early and advanced stages: a retrospective cohort study. J Med Econ 28, 81–88 (2025). 

16 Gläser, E. et al. The economic burden of subjective cognitive decline, mild cognitive impairment and Alzheimer’s dementia: excess costs and associated clinical and risk factors. Alz Res Therapy 17, 142 (2025). 

17 Aye, S. et al. Costs of care in relation to Alzheimer’s disease severity in Sweden: a national registry-based cohort study. Pharmacoeconomics 43, 153–169 (2025). 

18 Ong, S. C. et al. Annual societal cost of Alzheimer’s disease in Malaysia: a micro-costing approach. BMC Geriatr 25, 154 (2025). 

19 Chen, S. et al. Clinical characteristics and economic burden of Alzheimer’s disease inpatients in Hubei Province, China: a retrospective analysis of hospitalization costs and length of stay. Front Public Health 13, (2025). 

20 Mennini, F. S. et al. Burden of disease of Alzheimer disease in Italy: a real-world data analysis. BMC Health Serv Res 25, 588 (2025). 

21 Araya-Ríos, D. A., Nguyen, K.-H., Comans, T. A. & Trépel, D. Valuation of the Alzheimer’s disease 5 dimensions instrument: a discrete choice experiment with life duration in Chile. Value Health Reg Issues 50, 101148 (2025). 

22 Vilarinho, A. C. & Ferreira, R. G. The burden of Alzheimer’s disease and its costs to a healthcare system in a large population in Brazil. Value Health Reg Issues 45, (2025). 

23 Jiang, T., Gaastra, G. F. & Koerts, J. Financial performance of people with acquired cognitive impairments or affective disturbances – A prospective, European-wide study. Arch Gerontol Geriatr 136, 105911 (2025). 

24 Cherubini, V. et al. Profiles of vulnerability to financial exploitation in the degenerative dementias. Am J Geriatr Psychiatry 33, 1290–1300 (2025). 

25 Hudomiet, P., Hurd, M. D. & Rohwedder, S. Inequalities in the duration and lifetime risk of dementia in the United States. Demography 62, 1389–1412 (2025). 

26 Damsgaard, L. et al. Patterns of sick leave and unemployment prior to a diagnosis of young onset Alzheimer’s disease. Alzheimers Dement 21, e14607 (2025). 

27 Zhu, C. W., Flournoy, C., Raman, R. & Sano, M. Employment, volunteering, and health-related resource use in pre-symptomatic AD: results from the anti-amyloid treatment in asymptomatic Alzheimer’s disease (A4) study. Alzheimers Dement 21, e70641 (2025). 

28 Palpatzis, E. et al. Grief and economic stressors by sex, gender, and education. Neurology 104, e213377 (2025). 

29 Barcellos, S. H., Carvalho, L., Langa, K., Nimmagadda, S. & Turley, P. Education and dementia risk. Working Paper No. 33430 (National Bureau of Economic Research, 2025). https://doi.org/10.3386/w33430

30 Amin, V. et al. Causal effects of schooling on memory at older ages in six low- and middle-income countries: nonparametric evidence with harmonized datasets. J Gerontol B Psychol Sci Soc Sci 80, gbaf057 (2025). 

31 Cao, Q. K., Carr, D. C. & Taylor, M. G. Education, occupational environment, and cognitive function in Later Life.  J Gerontol B Psychol Sci Soc Sci 80, gbaf043 (2025). 

32 Vilaplana-Prieto, C. & Oliva-Moreno, J. Time value of informal care of people with alzheimer’s disease in Spain: a population-based analysis. Eur J Health Econ 26, 377–402 (2025). 

33 Mudrazija, S., Aranda, M. P., Gaskin, D. J., Monroe, S. & Richard, P. Economic burden of Alzheimer disease and related dementias by race and ethnicity, 2020 to 2060. JAMA Netw Open 8, e2513931 (2025). 

34 Kraake, S. et al. Social functioning in individuals with Alzheimer’s disease and the situation of caregivers. J Alzheimers Dis 105, 77–89 (2025). 

35 Zhang, Y., Dong, X., Yang, Y., Wang, X. & Zhao, T. Caregiving burden, disease-related knowledge, and quality of life among primary caregivers in Alzheimer’s disease: A cross-sectional study. J Alzheimers Dis 108, 1834–1846 (2025). 

36 Tay, L. X. et al. Caregiver burden of Alzheimer’s disease among informal caregivers: a cross-sectional study in Malaysia. Sci Rep 15, 10067 (2025). 

37 Lv, L. et al. Experiences of patient and care partner dyads in early Alzheimer’s disease: a mixed-method study in the United States. Neurodegener Dis Manag 15, 223–234 (2025). 

38 Lin, P.-J. et al. Health utilities in Alzheimer’s disease: A survey of patients and caregivers in the United States. J Alzheimers Dis 106, 943–953 (2025). 

39 Rebolo, M., Maroco, J., de Mendonça, A. & Melo, G. Caregiver burden in mild cognitive impairment due to Alzheimer’s disease—a longitudinal study. Psychogeriatrics 25, e70033 (2025). 

40 Lenzen, S. et al. Exploring the social value and design preferences for a home-based dementia community program in Australia. Eur J Health Econ 26, 777–795 (2025). 

41 Werner, R. M., Kim, S. & Konetzka, R. T. Trends in home health care among traditional Medicare beneficiaries with or without dementia. JAMA Netw Open 8, e2510933 (2025). 

42 Hanchate, A. D. et al. Telemedicine: a substitute or complement for home-based medical care? the experience of Medicare enrollees with dementia. Health Aff Sch 3, qxaf229 (2025). 

43 Xie, Z. et al. Inpatient palliative care and healthcare utilization among older patients with Alzheimer’s disease and related dementia (ADRD) and high risk of mortality in US hospitals. Am J Hosp Palliat Care 42, 261–272 (2025). 

44 Gruber, J., Howard, D. H., Leder-Luis, J. & Caputi, T. L. Dying or lying? For-profit hospices and end-of-life care. Am Econ Rev 115, 263–294 (2025). 

45 Chekani, F., Mirchandani, K., Zaki, S., Goswami, S. & Sharma, M. Utilization of potentially inappropriate sedative-hypnotic and atypical antipsychotic medications among elderly individuals with insomnia and Alzheimer’s disease. Sleep 48, zsaf003 (2025). 

46 Coe, A. B., Martindale, J. & Bynum, J. P. W. Receipt of Medicare Part D comprehensive medication reviews in older adults with dementia. J Manag Care Spec Pharm 31, 296–305 (2025). 

47 Sato, K. et al. Real-world lecanemab adoption in Japan 1 year after launch: insights from 311 specialists on infrastructure and reimbursement barriers. Alzheimers Dement 21, e70652 (2025). 

48 Tan, A. et al. Determinants of treatment willingness and willingness-to-pay for lecanemab in China: a network analysis. Alzheimer Dis Assoc Disord 39, 223–230 (2025). 

49 Zhou, F. F. et al. Disparities in early lecanemab uptake among US Medicare beneficiaries. JAMA Netw Open 8, e2511711 (2025). 

50 Platen, M. et al. Regional disparities of antidementia drug treatment in Germany: what can we learn for the new generation of Alzheimer’s therapies. Alzheimers Res Ther 17, 259 (2025). 

51 Perez-Arce, F. et al. American’s overall and equity-based societal valuation of a disease-modifying Alzheimer’s treatment: results from a discrete choice experiment. J Prev Alzheimers Dis 12, 100036 (2025). 

52 Jiang, X., Lv, G., Franklin, J., Li, M. & Lu, Z. K. Causal effect of conventional anti-dementia drugs on economic burden: an orthogonal double/debiased machine learning approach. BMC Geriatr 25, 659 (2025).