The current study addresses a gap in the literature that evaluates the cost of dementia . The formal and informal costs of care in different stages of dementia progression were estimated for Australia 2010-2040. The fiscal impact of therapeutic interventions to delay disease onset and progression was similarly evaluated. Previous studies have not simultaneously accounted for severity specific costs while recognising the distinction between formal and informal costs of care. The current cost of dementia in Australia is calculated to be AU$8.2 billion per annum, with formal care accounting for 61% of the total. By 2040, these costs will have increased to AU$28.3 billion per annum, 59% of which would be spent on formal care. As noted previously, absolute values such as these need to be interpreted with caution due to the lack and inconsistency of data available. However, estimates of the prevalence shift over time are considerably more accurate, and are more likely to remain constant with changes in these values. Our results indicate that slowing the progression of dementia by 2 years will result in a 10% relative increase in the total prevalence of dementia by 2040 relative to the no delay scenario. Such a result, while not intuitive, is due to higher rates of severe dementia in the no delay scenario, and the respective increase in mortality. Despite this increased prevalence, the relative cost of care will be reduced by AU$1.5 billion per annum, as the milder stages of dementia are associated with lower costs. Delaying the onset of dementia by 2 years will result in a relative reduction of both prevalence and total cost. These results highlight the need for cost estimation to account for more than total prevalence.
A more interesting dynamic is observed when the annual cost per person with dementia is examined. Under the influence of an intervention that successfully delays the onset of dementia by 2 years both prevalence and total cost are reduced relative to no intervention. However, the total cost of care per person with dementia per annum in 2040 is $2000 more expensive than the no delay condition, and $5000 more expensive than the delay progression condition.
In light of these findings, it is pertinent to question traditional notions of success when evaluating potential interventions - be they economic or clinical in nature. The intervention most beneficial at a population level (delay onset; lowest prevalence/total cost) places the greatest fiscal burden on individuals and their families. Whereas the intervention that leaves society with the greatest number of people with dementia also results in the lowest cost per person with dementia per annum. These differences in cost per person are driven by informal costs, and would thereby be more likely a burden on the individual than the government. In designing future objectives, policy decision makers need to question who pays, and who benefits from any potential interventions.
The driving force behind these dynamics is severity-specific prevalence. The relative number of patients with mild/moderate/severe symptoms changes over time, and differentially according to the influence of interventions. Disease progression is strongly associated with a transition from mostly informal to mostly formal care. Different types of care and different care settings are associated with different costs.
Many factors determine the current costs, but there is agreement that the main component is the cost of formal care, which rises as dementia progresses. People with moderate dementia often transition from mostly informal to mostly formal care. This includes the shift from home based care in the community to residential or institution-based care. Benefits of care interventions, medications and non-medication therapies, policies of early detection and policies of providing more formal care in the community are justified by how much they avoid institutionalisation. Controversies arise because there are large differences in informal care hours and costs. In addition, the effects of dementia on the quality of life of both people with dementia and their carers are difficult to quantify with appropriate economic social and environmental measures (triple line accounting) that include distributions of costs and benefits among individuals.
For a clearer approach to costing we recommend the following:
• Consistent definitions of progression of dementia using and reporting multiple dimensions, the level of cognitive impairment, estimated time from onset of symptoms, level of assistance with activities of daily living (ADL) or disability weights, with an agreed comorbidity scale for both physical and mental disorders.
• Clearly distinguish between cost of illness and cost of caring for people with dementia. In most cases it is better to count the whole cost of individual care rather than artificially split this cost in complex patients into fractional disease components among many interacting diagnoses.
• Focus on costing the transition from informal to formal care within the moderate stage of dementia. This includes using the person with disability (with their network of informal and formal carers) as the unit of analysis of costs and including the value of positive experiences and wellbeing as benefits to participants in this care network .
While it is likely that similar trajectories of prevalence exist in other western countries, where rates of dementia and the types of care are comparable, estimates of dementia prevalence can vary considerably. For example, the current model differs to a report by the Alzheimer's Association  in estimates of baseline and future rates of mild, moderate and severe dementia with or without intervention. Specifically the report demonstrates higher rates of severe dementia and lower rates of mild dementia than the current study (e.g. 28:31:41  compared to 50:30:20 (mild:moderate:severe) at 2010 baseline). Similar levels of variability can be seen in the projected costs of formal and informal care of dementia in Australia. A recent assessment of future costs  estimated the cost of dementia in 2030-2031 at AU$4.5 billion, considerably less than the AU$19.7 billion projected by this study. A possible explanation for such a finding is that the current study accounted for not only formal costs of care, as the other estimate was based, but also costs associated with informal care. It is likely that this discrepancy is also due to more recent estimates of dementia prevalence being utilised in the current study. The capability of any model to adequately account for prevalence rates and costs associated with dementia is largely reliant on the data available to this end, and is modulated by social norms, expectations and the provision of care in these varying populations. As a result, comparing studies is not always appropriate as each study aims to achieve a 'best guess' in their estimates and assumptions. Applying the dementia prevalence model with a variety of parameters in various populations would be a useful indicator of the cost of formal and informal care in Australia and internationally.
The current study is limited by the costing data currently available to model, and perhaps this goes some way to explaining the lack of research in the area . An accurate estimation of formal and informal costs by severity is difficult at present. Available published data are fragmented and different government agencies have different reporting requirements, with generally only the global costs of formal and informal care available for analysis. Such inconsistency disallowed many costs to be included in this study.
A more collaborative approach to this problem will enhance cost estimates and future policy decisions. Assumptions regarding duration of illness  and average life expectancy  are limited to current state of knowledge in these areas. For example, if delay in onset of dementia increases life span, this would merely shift costs some years hence rather than reduce them. In future these assumptions may change significantly and so will the projected outcomes. As patient and carer networks change frequently, especially during the moderate phase of dementia, methods that account for this dynamic dimension will be able to allocate costs and benefits using activity based costing methods. Costs can be allocated to both disease states and transitions, independent of states. For example the costs associated with newly diagnosed dementia cases might occur at any stage of dementia, rather than these costs always allocated to the mild stage of dementia. New advances with biomarker technology for early detection of dementia may in fact increase demand on services in very early stages of disease .
Many additional factors influence the costs of care, and these may change in future. For example, labour costs may change relative to a supply-demand cycle for workers in residential aged care facilities. The replacement costs for informal care may also be calculated differently if the retirement age increases. Carers 65 years and older and still in the work force will convert from paid employment to a role of informal carer at much higher replacement cost.
A further limitation of this study is that the costs associated with the interventions could not be included in the analysis as the cost of such interventions are yet to be known. It is obvious that costs will be incurred with any measure introduced to delay or slow the progression of dementia. While the cost of a hypothetical intervention was estimated based on the current cost of donepezil, costs of potential treatments remain unknown.
Estimating care costs for dementia, now and in the future, requires a more detailed analysis than total prevalence alone can provide. The potential of interventions that prolong disease progression, or delay disease onset to produce savings in terms of prevalence, or cost of care, or both is exciting. However, savings at an aggregated level are not necessarily passed on to the individual. The complexities of predicting trends in such a dynamic system necessitate that clinicians and policy makers take time to consider who pays, and who benefits from interventions.