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

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 data from Medicare with data from Equifax, the credit agency, to study how people's borrowing behavior has changed in previous years and following the diagnosis of Alzheimer's or a similar disease. I disturb.

What they found was surprising: Credit scores among people who later develop dementia begin to decline dramatically long before their disease is formally identified. One year before diagnosis, these people were 17.2% more likely to have defaulted on mortgage payments than before the onset of the disease, and 34.3% more likely to have defaulted on mortgage payments. their credit card accounts. 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, “get steadily worse over time as the diagnosis gets closer, and so it literally mirrors 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 about financial matters, can begin to deteriorate long before a diagnosis is made or even suspected. People who are starting to experience cognitive decline may fail to pay, make impulsive purchases, or put money into risky investments that they would not have considered before the disease.

“It's not just forgetfulness, but it changes our risk tolerance,” 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. “It might suddenly seem like a good move to move a diversified financial portfolio into a few stocks someone recommends.”

Even people in the early stages of the disease are 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 at risk of developing dementia saw their household wealth decline in the decade before diagnosis.

The problems are likely to only increase as the American population ages and more people develop dementia. The New York Fed study estimates that approximately 600,000 delinquencies will occur over the next ten years due to undiagnosed memory disorders.

This likely underestimates its impact, the researchers say. 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 Fed and another of the study's authors, said that after his mother was diagnosed with Alzheimer's, her family discovered parking tickets and traffic violations that she had hidden from them.

“If anything, this is kind of an underestimate of the kind of financial hardship people may be experiencing,” he said.

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

“I walked into a showroom and drove home in a BMW,” he said. “My wife wasn't thrilled.”

At the time, Mr. Reinstein had recently retired as assistant city manager of Fayetteville, North Carolina. He had noticed memory problems for years, but had ignored them due to his demanding job. Only after the diagnosis did he learn that friends and colleagues had also noticed the changes but had said nothing.

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

The study expands on past research in part through its sheer scale: Researchers accessed health and financial data on nearly 2.5 million older Americans with chronic health conditions, about half a million of whom were diagnosed with Alzheimer's disease. Alzheimer's or related disorders. (The records were anonymized, allowing the researchers to combine the two datasets without having access to individual patients' identifying details.)

The large amount of data allowed the researchers to break it down more carefully than in previous studies, examining the impact of race, gender, family 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 initial resources 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 flag people who may suffer from financial decision-making difficulties associated with Alzheimer's disease, although they stressed that there are unanswered 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 to prepare for the possibility of an Alzheimer's diagnosis. This could mean taking steps such as giving financial power of attorney to a trusted person or simply paying attention to signs that someone may be behaving unusually.

Dr. Nicholas agreed.

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

Pam Belluck contributed to the reporting.

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