Alzheimer’s Disease and its Impact on Financial Management: A Look at the Link
Introduction:
Alzheimer’s disease is a devastating condition that not only affects an individual’s cognitive abilities but also has a significant impact on their financial management skills. Recent research conducted by economists and medical experts from Georgetown University and the Federal Reserve Bank of New York has shed light on the correlation between Alzheimer’s and financial decision-making. Carole Roan Gresenz, an economist and professor of public policy and health at Georgetown University, shares insights into the study’s findings and the implications for families and financial institutions.
The Study’s Findings:
Gresenz explains that the study utilized consumer data provided by Equifax, a credit-reporting company, spanning from 2000 to 2017. This data was merged with Medicare claims data to determine the timing of Alzheimer’s diagnoses. The anonymized data analysis revealed a clear and consistent pattern. Credit scores began declining an average of five years prior to an Alzheimer’s diagnosis and continued to deteriorate thereafter. Additionally, delinquent bill payments for both credit cards and mortgages increased significantly in the years leading up to diagnosis.
Implications for Families:
The study’s findings highlight the importance of initiating conversations about finances long before an Alzheimer’s diagnosis. Gresenz emphasizes that changes in financial decision-making may occur silently even before noticeable symptoms of Alzheimer’s manifest. Families and loved ones must be proactive in ensuring that seniors have a trusted individual they can discuss their financial matters with. This preemptive action may help prevent poor financial outcomes.
The Role of Financial Institutions:
Gresenz suggests that financial institutions can play a crucial role in detecting and reporting suspected fraud among the elderly. The Consumer Financial Protection Bureau has published an advisory outlining ways in which financial institutions can reduce financial exploitation among seniors. By being vigilant and proactive, these institutions can contribute to safeguarding the financial well-being of vulnerable individuals.
The Human Impact:
Gresenz shares that the reaction to the study’s findings has been significant, with many individuals relating personal stories of witnessing changes in financial behavior before an Alzheimer’s diagnosis. These stories emphasize the importance of recognizing that such changes are not isolated incidents but rather a systematic occurrence. The study’s findings provide evidence supporting these anecdotal experiences.
Future Directions:
Looking ahead, Gresenz and her team hope to utilize the observed changes in financial outcomes to develop an algorithm that can predict the likelihood of developing Alzheimer’s. If successful, this algorithm could serve as a cost-effective and widely applicable tool for identifying individuals who should undergo further testing for the disease. The ongoing work aims to improve early detection and intervention, potentially leading to better outcomes for those affected by Alzheimer’s.
Conclusion:
The correlation between Alzheimer’s disease and financial decision-making is a topic of great concern. The study conducted by Gresenz and her team provides valuable insights into the financial decline that often precedes an Alzheimer’s diagnosis. Families are urged to start conversations about finances early on, while financial institutions are encouraged to be vigilant in detecting and reporting potential exploitation. By taking proactive measures, we can collectively mitigate the financial impact of Alzheimer’s and provide better support for those affected by this devastating disease.
