The disease that could bankrupt us
An old college professor of mine explained the baby boomer generation using an interesting analogy. He described it as like a mouse being eaten by a snake. The snake swallows prey whole and you can see the mouse travelling down the snake’s body.
Because that generation was larger than any before or since, it affects American culture, business, and public policy uniquely. When they were babies, diaper sales soared. As they entered childhood, the country invested in public schools, with California leading the way with its Master Plan for education.
When baby boomers were teenagers, we built universities. As they entered the workforce, we saw massive economic growth. Only now, they’re beginning to retire. This is already having an effect on our economy. Despite very low unemployment, the labor force participation rate hasn’t completely recovered and isn’t likely to because much of the reduction is due to retirement.
Social security is not in as much trouble as many would like you to believe, in part because politicians in the 1980s foresaw the problem, raised the payroll tax and the retirement age. Only modest adjustments could have the program secure for decades to come. Medicare is a different story.
The difference is that health care costs increase at a higher rate than inflation and older people tend to need more health care than younger ones. Thanks to the Affordable Care Act, health care inflation has slowed, but only slightly. The problem remains.
Diseases like Alzheimer’s make the problem far more acute. According to a fact sheet published by the Alzheimer’s Association, the cost this disease adds to our health care system is enormous. Seniors without the disease cost Medicare approximately $7,223 per year, while those with Alzheimer’s or some other form of dementia cost three times that much, $23,497.
Alzheimer’s is the most expensive disease on the planet. A person with heart disease costs about $175,000 in the last five years of life. Similarly, a person with cancer costs about $173,000. But Alzheimer’s dwarfs both at $287,000. The difference in the Medicaid program is even greater, with Alzheimer’s patients costing 23 times non-alzheimer’s patients.
The two programs combined are expected to spend $175 billion on Alzheimer’s just this year, two thirds of the total national cost.
These are huge, but currently manageable costs. But, remember that mouse going through the body of the snake? That’s where the problem starts.
Today, there are an estimated 5.3 million people over age 65 with Alzheimer’s disease. (This doesn’t include people, like my wife, who are younger). But, with baby boomers getting older, that number will increase and become a greater proportion of the national population. By 2050, that 5.3 million is expected to grow to 13.8 million.
Unless something is done, the cost will go up correspondingly. If you think $175 billion sounds like a lot, try $758 billion. That’s the number for 2050. Combined Medicare and Medicaid costs for Alzheimer’s is expected to quadruple by that time.
Of course, we could cut those programs and simply pass the cost onto individuals and families. That’s the choice before us: unsustainable costs for the government or bankrupting and severely stressing families. I have hardly touched on the costs to loved ones and caregivers, a topic for another time.
There is another choice and that is to spend the money on research. Dementia scientists are calling for $2 billion a year for the disease. That sounds like a lot of money, and it is. After all, it is about one one thousandth the cost of a war in Iraq.
My wife is part of one research study and there are several ongoing clinical trials. Her doctor cautioned us not to get too optimistic about these trials. Most have failed, and depressingly, some have made it to the expensive final stage of research before scientists learn that the drugs are not helping.
The necessary budget increase is enormous, but possible. It would represent about a doubling of the current research budget. Secretary Clinton had proposed an increase of about this size, but she wasn’t elected.
The current administration isn’t as receptive to increases in medical research funding and had in fact proposed massive cuts to the National Institutes of Health. But there are hopeful signs. The NIH has typically had bipartisan support and despite his initial proposal, the bill President Trump actually signed included a $2 billion increase for the NIH, including $400 million more for Alzheimer’s research.
It’s a small start, but consider it an investment.