Home Business Alzheimer's takes a financial toll long before diagnosis, study finds

Alzheimer's takes a financial toll long before diagnosis, study finds

by SuperiorInvest

Long before people develop dementia, they often begin to fall behind on mortgage payments, credit card bills and other financial obligations, new research shows.

A team of economists and medical experts from the Federal Reserve Bank of New York and Georgetown University combined Medicare records with data from Equifax, the credit bureau, to study how people's borrowing behavior changed in previous years. and after a diagnosis of Alzheimer's or a similar disease. disorder.

What they found was surprising: Credit scores among people who later develop dementia begin to drop dramatically long before their illness is formally identified. A year before diagnosis, these people were 17.2 percent more likely to be delinquent on their mortgage payments than before the onset of the disease, and 34.3 percent more likely to be delinquent on your credit card bills. The problems start even earlier: the study finds evidence of people falling behind on their debts five years before diagnosis.

“The results are striking in both their clarity and their consistency,” said Carole Roan Gresenz, an economist at Georgetown University and one of the study's authors. Credit scores and delinquencies, she said, “consistently worsen over time as diagnosis approaches, so they literally reflect the changes in cognitive decline that we're seeing.”

The research adds to a growing body of work documenting what many Alzheimer's patients and their families already know: Decision-making, even in financial matters, can begin to deteriorate long before a diagnosis is made or even suspected. . People who are beginning to experience cognitive decline may miss payments, make impulsive purchases, or invest money in risky investments that they would not have considered before the illness.

“It's not just about forgetting, but our risk tolerance changes,” said Lauren Hersch Nicholas, a professor at the University of Colorado School of Medicine who has studied the impact of dementia on people's finances. “Suddenly, it might seem like a good move to move a diversified financial portfolio into some stock someone has recommended.”

People in the early stages of the disease are also vulnerable to scams and fraud, added Dr. Nicholas, who was not involved in the New York Fed research. In a paper published last year, she and several co-authors found that people likely to develop dementia saw their household wealth decline in the decade before their diagnosis.

The problems are likely to increase as the American population ages and more people develop dementia. The New York Fed study estimates that 600,000 delinquencies will occur over the next decade as a result of undiagnosed memory disorders.

The researchers argue that this probably underestimates the impact. Their data includes only problems that appear on credit reports, such as late payments, not the much broader range of financial impacts that illnesses can cause. Wilbert van der Klaauw, an economist at the New York Federal Reserve and another of the study's authors, said that after her mother was diagnosed with Alzheimer's, her family discovered parking tickets and traffic violations she had hidden.

“If anything, this is kind of an underestimation of the kind of financial difficulties people can experience,” he said.

Shortly before he was diagnosed with Alzheimer's, Jay Reinstein bought a BMW he couldn't afford.

“I walked into a showroom and came home with a BMW,” he said. “My wife was not thrilled.”

At the time, Mr. Reinstein had recently retired as assistant city manager of Fayetteville, North Carolina. He had been noticing memory problems for years, but he dismissed them as a result of his demanding job. Only after the diagnosis did he learn that friends and colleagues had also noticed the changes, but had not said anything.

Reinstein, 63, is lucky, he added. He has a government pension and a wife who can control his spending. But for those with fewer resources, financial decisions made in the years before diagnosis can have serious consequences, leaving them without money at a time when they will need it most. The authors of the New York Fed study noted that the financial effects they observed predated most of the costs associated with the disease, such as the need for long-term care.

The study expands previous research in part through its large scale: Researchers had access to financial and health data on nearly 2.5 million older Americans with chronic illnesses, of whom about half a million were diagnosed with Alzheimer's or related disorders. . (The records were anonymized, allowing the researchers to combine the two data sets without having access to identifying details for each patient.)

The large amount of data allowed the researchers to slice it more precisely than in previous studies, looking at the impact of race, sex, household size and other variables. Blacks, for example, were more than twice as likely as whites to have financial problems before diagnosis, perhaps because they had fewer resources to begin with, and also because black patients are often diagnosed later in the course of the disease. .

The researchers hoped that the data could eventually allow them to develop a predictive algorithm that could identify people who might be suffering from financial decision-making problems associated with Alzheimer's disease, although they stressed that there were unresolved questions about who would have access to such information. and how it would be used.

Until then, the researchers said, their findings should be a warning to older Americans and their families that they should prepare for the possibility of an Alzheimer's diagnosis. That could mean taking steps like giving financial power of attorney to a trusted person or simply paying attention to signs that someone might be behaving unusually.

Dr. Nicholas agreed.

“We should think about the possibility of financial difficulties related to a disease we don't even know we have,” he said. “Knowing this, people should be on the lookout for these symptoms among friends and family.”

Pamela Belluck contributed with reports.

Source Link

Related Posts