[100-Year Brain Health①] Dementia Twists the Spine... Annual Care Cost per Patient 20.61 Million KRW

830,000 Dementia Patients Aged 65+ in 2020
Rapid Increase Expected to Reach 3.22 Million by 2060
Per Capita Care Costs Account for 33% of Household Income
Government to Strengthen Support by Introducing National Responsibility System
Reducing Medical Expense Burden and Offering Free Examinations

[Asia Economy Reporter Chunhee Lee] 830,000 people and 17.3 trillion KRW. These are the number of dementia patients aged 65 and over in South Korea and the associated social management costs as of 2020. With pessimistic forecasts predicting a rapid increase in the number of patients with degenerative brain diseases such as dementia due to rapid aging, and the resulting social costs, there is a growing call for urgent national measures.

According to the Central Dementia Center on the 26th, the number of dementia patients aged 65 and over in South Korea was 829,227 in 2020. When combined with 134,227 patients with Mild Cognitive Impairment (MCI), who have a high likelihood of progressing to dementia, the total number of dementia patients and those at risk reaches 1 million.

The number of dementia patients is expected to increase rapidly. The estimated number of dementia patients, applying standardized dementia prevalence rates, is projected to rise from 841,920 in 2020 to 2,173,089 in 2040, surpassing 2 million, and reaching 3,325,602 by 2060.

The costs of managing these patients are also expected to surge. The annual per-patient management cost related to dementia, including direct medical costs, non-direct medical costs, long-term care costs, and indirect costs (such as productivity loss), rose to 20.61 million KRW in 2020. This accounts for 33.2% of the average annual household income of 61.93 million KRW. This means that if a family member develops dementia, they will need to spend one-third of their income on dementia care in the future. About half of this amount, approximately 11 million KRW, is spent on direct medical costs for dementia treatment.

Social costs are also growing to an enormous scale. In 2020 alone, about 17.3 trillion KRW was spent on total dementia management costs in South Korea, which is about 1% of the country’s Gross Domestic Product (GDP) of 1,933 trillion KRW. As the number of dementia patients is expected to continue increasing, total dementia management costs are estimated to soar to 56.9 trillion KRW in 2040 and 109 trillion KRW in 2060.

This situation is not unique to South Korea. According to the Alzheimer’s Association in the United States, at least 6 million people in the U.S. are estimated to have Alzheimer’s dementia. Deaths due to Alzheimer’s increased by 145% in 2020 alone. This is more than deaths caused by breast and prostate cancer, with about one-third of the elderly population dying from dementia. Consequently, dementia is estimated to impose a burden of $321 billion (approximately 422 trillion KRW) in the U.S., with projections that this cost will surge to $1 trillion (approximately 1,314 trillion KRW) by 2050.

The South Korean government has also strengthened various supports since introducing the ‘National Responsibility System for Dementia’ in 2017. This system aims to take national responsibility for the burden of dementia, which is expected to increase on households. The largest burden, direct medical costs, has been significantly alleviated by including severe dementia under the National Health Insurance’s special calculation system. This system greatly enhances health insurance coverage for severe diseases with high out-of-pocket expenses to prevent impoverishment due to illness. As a result, the medical cost burden ratio for patients with severe dementia has decreased from a maximum of 60% to 10%. The average out-of-pocket expense per person dropped from 1.26 million KRW to 540,000 KRW, a reduction of 720,000 KRW.

Additionally, a cognitive support grade was newly established under the Long-Term Care Insurance for the Elderly, allowing dementia patients with cognitive issues but good physical function to use long-term care services such as day and night care. To actively identify dementia patients, free screening and diagnostic tests are conducted at 256 Dementia Safety Centers nationwide. Based on these efforts, a national survey showed that 83% of respondents felt that the National Responsibility System for Dementia has been helpful to patients and their families. Among dementia services, support for medical and long-term care costs was cited as the most improved.