Alzheimer's Disease Costs Business $33.3 Billion a Year

Alzheimer's Association
Tuesday, 8 September 1998

University of Pennsylvania Professor Is First to Compile Such Data

Alzheimer's disease costs American businesses $33.16 billion a year, a surprising total since it was widely believed that the disease affects only older, retired Americans, not the workforce.

A new study released today found costs of $26 billion related to the absenteeism of caregivers — employees who take care of people with Alzheimer's disease, including spouses and parents. Business pays another $7 billion a year toward the total cost of care.

Commissioned by the Alzheimer's Association, the study was conducted by Ross Koppel, Ph.D., who teaches in the Department of Sociology at the University of Pennsylvania and heads the Social Research Corporation of Wyncote, Pa. He was assisted by David Ford of Solutions for Progress, a Philadelphia research firm.

Presenting the data at Washington's National Press Club September 9, Koppel was joined by senior management officials of IBM/Tivoli, WorldCom, the National Association of Manufacturers and the Alzheimer's Association.

"The $33.16 billion figure is probably a very low estimate," Koppel said of his study. Since many items cannot be measured with existing data and many of these costs have never been calculated before, Koppel concluded that, "if all the relevant factors could be measured, the actual cost might well be two to three times higher than $33.16 billion."

"From an economic perspective, Alzheimer's disease receives only a fraction of the attention it deserves," the study says. "The costs to business and to society are extraordinary and will grow at a dramatic rate as baby boomers age."

"From a human perspective, the toll of Alzheimer's disease is incalculable and terrible. Investment in research on this disease appears not only humane but also prudent."

Edward F. Truschke, Alzheimer's Association president and CEO, said, "We have known for a long time that Alzheimer's disease creates huge costs for families and for public programs like Medicaid. But no one has ever quantified the cost of the disease to business. In fact, the assumption has been that American business really does not have to concern itself with Alzheimer's disease, because most people who get the disease are over age 65 and not in the work force. This report shatters that assumption."

"This study provides compelling new evidence that the nation needs to expand its research on Alzheimer's disease in order to head off an epidemic of disastrous proportions as baby boomers reach the age of highest risk," said Truschke.

The Alzheimer's Association is asking Congress for an immediate increase of $100 million in federal funds for Alzheimer research.

Lynn Wilczak, a vice president of IBM/Tivoli said her experience convinced her the study was very conservative in its estimates. "On the job, team members are affected when they try to cover for distracted or interrupted team members who are caregivers. That brings a new burden on caregivers because they feel guilty about such a situation, but it's a situation they cannot change."

"Many times in life, an opportunity that comes once never passes your way again. What then of the good worker who declines travel, declines training and misses promotion because of caregiving responsibilities? What different path does that life and that career travel? How can you put a dollar value on that loss for the employer, much less for the individual?"

Charles M. Cole III, vice president for carrier sales at WorldCom, said the $33.16 billion figure did not surprise him at all. He referred to the baby boomers as "a sandwich generation — beset with both child care and elder care" and noted how much worse it will be for the next generation of caregivers as baby boomers age.

Employers are growing increasingly aware of elder care and problems it poses for caregivers in the workplace, Truschke said. "The Conference Board, for example, learned in a survey of corporate executives earlier this year that they expect elder care to top child care as a major concern of their employees."

The $26.02 billion in caregiver costs in the Koppel study includes $7.89 billion for caregivers' own absences from work and $13.22 billion in lost productivity from them and what has been called "the domino effect" of absenteeism on co-workers. Replacing caregivers who leave the workforce adds another $3.59 billion and $1.32 billion is spent continuing health care coverage for workers on leave, fees to temp agencies and increased caregiver usage of Employee Assistance Programs (EAPs). The final $7.14 billion is spent by employers on health insurance and taxes to pay for Medicare, Medicaid and ongoing federal research on Alzheimer's disease at the National Institutes of Health.

For more information, or to contact Alzheimer's Association, see their website at: www.alz.org