Family Caregivers to the Rescue: Potential Medicaid Savings of Training Caregivers

In addition to its clinical challenges, institutional dementia care comes with a substantial economic burden for state Medicaid programs. One estimate is that two-thirds of every long-term care dollar goes to the support of individuals with Alzheimer’s and other dementias. From an economic perspective, delaying or avoiding the initialization of individuals with dementia could provide considerable cost savings. On the other hand, informal caregiving by families comes with a number of challenges and has been associated with poor physical, emotional, and cognitive outcomes for caregivers. A recent study looked at whether providing better support for family caregivers of individuals with dementia in the form of a caregiver training program would result in overall economic benefits in terms of Medicaid savings for the state of Minnesota.

The study examined the New York University Caregiver Intervention, which involves a trained social worker counseling caregivers extensively during the first year of the program, with ongoing support in subsequent years. Each caregiver averages 30 hours of counseling in the first year of the program, with 12 hours of support in subsequent years, at a cost of almost $2,000 per caregiver in the first year, and just over $600 in subsequent years.

When the researchers looked at the economic impact of this training, the primary benefit was reduced time spent in nursing home care. Evaluation suggested that as a result of the caregiving intervention, 5 to 6 percent of individuals eligible for nursing home care would stay in the community longer, resulting in 17 percent fewer individuals dying in nursing homes over a 15-year period. The researchers’ fiscal calculations suggested that this was most likely to produce an overall savings of $40.4 million after 15 years, assuming that all eligible caregivers enrolled in the intervention.

When the researchers looked at best and worst case scenarios, the potential economic outcomes ranged from a savings of up to $178.9 million to a potential loss of up to $7.3 million. The main factor influencing this wide range of estimates was the assumed program effectiveness, although some efficiency improvements such as delivering the intervention online instead of in person could save as much as $52 million.



Foldes SS, Moriarty JP, Farseth PH, et al. Medicaid savings from the New York University Caregiver Intervention for Families with Dementia. The Gerontologist. (2017). DOI:10.1093/geront/gnx077


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