Long before people develop dementia, they often 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 credit bureau Equifax to study how people’s credit behavior changed in the years before and after an Alzheimer’s diagnosis or something similar altered disorder.
What they found was striking: The credit scores of people who later develop dementia begin to plummet long before their illness is officially identified. A year before diagnosis, these people were 17.2 percent more likely to be behind on their mortgage payments than before the disease struck, and 34.3 percent more likely to be behind on their credit card bills higher. The problems start even earlier: The study finds evidence that people fall behind on their debts five years before diagnosis.
“The results are impressive in both their clarity and consistency,” said Carole Roan Gresenz, an economist at Georgetown University and one of the study’s authors. Credit scores and delinquencies, she said, “worsen over time as we get closer to diagnosis, literally reflecting the changes in cognitive decline that we are seeing.”
The research adds to a growing body of work documenting what many Alzheimer’s patients and their families already know: Decision-making, including in financial matters, can deteriorate long before a diagnosis is made or even suspected. People who begin to experience cognitive decline may miss payments, make impulsive purchases, or put money into risky investments that they would not have considered before the illness.
“Not only do we become forgetful, 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, converting a diversified financial portfolio into a stock that someone recommended seems like a good move.”
People in the early stages of the disease are also vulnerable to scams and scams, Dr added. Nicholas, who was not involved in the New York Fed investigation. In a paper published last year, she and several co-authors found that the household wealth of people likely to develop dementia declined in the decade before diagnosis.
The problems are only likely to increase as the American population ages and more people develop dementia. The New York Fed study estimates that there will be about 600,000 defaults due to undiagnosed memory disorders over the next decade.
That would likely underestimate the impact, the researchers argue. Your information only includes issues that appear on credit reports, such as: B. late payments, not the much broader range of financial impacts the illnesses can cause. Wilbert van der Klaauw, a New York Fed economist and one of the study’s authors, said that after his mother was diagnosed with Alzheimer’s, his family discovered traffic tickets and traffic violations that she had hidden from them.
“If anything, this is kind of an underestimate of the financial hardship that people can experience,” he said.
Shortly before he was diagnosed with Alzheimer’s, Jay Reinstein bought a BMW that he couldn’t afford.
“I went to a showroom and came home with a BMW,” he said. “My wife wasn’t happy.”
At that time, Mr. Reinstein had recently retired as assistant city manager of Fayetteville, North Carolina. He had noticed memory problems for years but dismissed them because of his demanding job. It was only after his diagnosis that he learned 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 expenses. But for people with fewer means, 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 impact they see predates most costs associated with the disease, such as the need for long-term care.
The study expands on previous research in part by its scope: Researchers had access to health and financial data on nearly 2.5 million older Americans with chronic health problems, about half a million of whom have been diagnosed with Alzheimer’s or related diseases. (The records were anonymized so researchers could combine the two data sets without having access to identifying details about individual patients.)
The large amount of data allowed researchers to break down the data more finely than in previous studies, examining the effects of race, gender, household size and other variables. For example, blacks were more than twice as likely to have financial problems before diagnosis as whites, 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 the data could eventually allow them to develop a prediction algorithm that could identify people who may be suffering from financial decision-making impairment associated with Alzheimer’s disease – although they stressed that there are unresolved questions about who would have access to such information and how it would be used.
Until then, the researchers say, their findings should serve as a warning to older Americans and their families to prepare for the possibility of an Alzheimer’s diagnosis. This could mean, for example, granting financial power of attorney to a trusted person or simply watching for signs that someone may be behaving out of character.
Dr. Nicholas agreed.
“We should think about the possibility of financial hardship related to a disease we don’t even know we have,” she said. “Knowing this, people should be on the lookout for these symptoms in friends and family members.”
Pam Belluck contributed reporting.
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2024-05-31 15:00:13
www.nytimes.com
