Economic Analysis of the Tailored Activity Program: A Nonpharmacological Approach to Improve Quality of Life in People Living With Dementia and their Caregivers

Abstract

We investigated costs of delivering the Tailored Activity Program (TAP) and cost savings from two perspectives (health sector and societal) for people living with dementia (PLWD) and their caregivers (dyads) compared to attention control (AC) using data from a randomized controlled trial. The evaluation assessed intervention delivery costs and caregiver reported health care utilization. The total intervention cost of TAP was $1707/dyad versus $864/dyad for AC, and total costs over 6 months for TAP dyads as compared to AC were $1299 (CI: −$10,496, $7898) less from the healthcare perspective, and $761 (CI: −$10,133, $8611) less from the societal perspective. TAP cost savings are driven by lower use of healthcare services among participating dyads, but further analyses with larger samples is warranted to confirm its financial impact.

Background

As the number of people living with dementia (PLWD) increases in the USA and worldwide, the need to develop and implement care approaches and understand their cost structure is a public health imperative (Murman et al., 2002). It is also a financial imperative since dementia care involves significant costs (Hurd et al., 2013; Jutkowitz et al., 2017). A recently published analysis estimated cumulative 7-year costs to families with dementia at $176,180 for informal care and $55,550 for out-of-pocket healthcare costs (Hurd et al., 2013; Kelley et al., 2020). An economic model estimating the impact of a novel caregiving program projected that savings in Minnesota from the payer perspective alone would near $1 billion during 2010–2025 (Long et al., 2014). Noteworthy is that the types of costs measured and how programs are valued in economic studies differ based on the stakeholder perspectives applied.

One well-studied nonpharmacological intervention is the Tailored Activity Program (TAP). In multiple randomized clinical trials, TAP demonstrated improved caregiver wellbeing, caregiver confidence, and engagement of PLWD while in some studies, TAP led to reduced NPS and improved daily function (Cohen-Mansfield et al., 2010; Gitlin et al., 2008, 2018; Kolanowski & Buettner, 2008; Kolanowski et al., 2005). TAP trials also showed additional benefits such as reductions in functional dependence as well as reductions in caregiver burden and caregiving time (Gitlin et al., 2008, 2018; Kolanowski et al., 2005; Long et al., 2014). A recent trial conducted in the Baltimore region found that TAP dyads had fewer health-related events including death, hospitalizations and caregiver depression compared to an attention control (AC) group that received disease education and home safety recommendations Herein, we report a cost analysis of this trial from two perspectives: healthcare sector and societal. The healthcare perspective provides an understanding of TAP’s financial implications within the healthcare system. The societal perspective is broader and accounts for TAP’s financial impacts that are borne to PLWD and their caregivers (home help, meals, transportation, and informal care). We evaluated the cost of delivering TAP and whether at 6 months TAP dyads had less costs of healthcare, social services, and caregiving compared to AC. This evidence will help inform TAP’s implementation, particularly in view of evolving coverage policies for dementia services under state Medicaid waiver programs, Medicare fee-for-service, and Medicare Advantage plans (Boustani et al., 2019).

Methods

Overview of the Trial

Details about the trial are reported elsewhere. Briefly, eligible PLWD were (1) English-speaking; (2) diagnosed with dementia by a physician; (3) able to participate in at least two activities of daily living; (4) experiencing agitated or aggressive behaviors; and (5) cared for by a family caregiver ≥21 years old who was living with PLWD (or living within 5 miles or 15 minutes). Dyads with terminal illness or in active treatment for cancer were excluded. For eligible dyads, an in-home visit was completed to obtain consent and conduct a baseline interview that involved assessing capacity, cognitive status(Folstein et al., 1975), dementia severity (Morris, 1993), caregiver wellbeing and caregiver report of healthcare and social service utilization (Kolanowski & Buettner, 2008). Dyads were stratified by cognitive level using the Mini-mental Status Examination (cutoff >10 vs. ≤10) and randomly assigned to either TAP or AC. All dyads were interviewed at baseline, 3, and 6 months. We applied a 6 month time horizon to the cost analysis to maximize the length of time that trial data were available.

TAP was implemented by trained licensed occupational therapists (OTs) and consisted of up to 8 face-to-face one-hour home sessions over 3 months. The program involved assessments of cognitive and functional abilities and PLWD interests, caregiver readiness and availability to use activities and the physical environment for its support of daily function and engagement in activities. OTs then designed activities tailored to assessment profiles and instructed caregivers in their daily use along with providing disease education and stress reduction techniques.

AC was designed to control for the nonspecific components of TAP that may influence outcomes including rapport and social engagement. AC dyads received the same number of home visits over 3 months delivered by health educators who provided home safety assessments, tips, and disease education not related to activity use nor with a theoretical basis for addressing dementia-related symptoms.

Study Sample

From 2013–2016, 603 dyads were screened of whom 250 (41.5%) were eligible, willing to participate, completed the baseline interview and randomized to TAP (n = 124) or AC (n = 126). Our cost study and included 176 of 250 (70.4%) dyads who had complete data at 6 months (N = 93 TAP; N = 83 AC). A CONSORT chart detailing recruitment and retention for the cost study cohort is in Additional File 1.

Intervention Time

Intervention costs (training, delivery, debriefing, travel time, mileage, materials, supplies) were captured using a published rubric applicable to behavioral interventions (Pizzi et al., 2016). Since TAP or AC are not formally reimbursed, their intervention costs were calculated using time-driven Activity-Based Costing, a microcosting approach which quantifies the total program costs based on the time and resources required to deliver it (Kaplan & Anderson, 2003). During the study, interventionists for both TAP and AC maintained detailed logs of time spent in preparation, travel, and delivery of TAP or AC, mileage logs for travel to dyads’ homes, and materials purchased. Logs were also kept for time spent formally training OTs and other staff in the respective treatment protocols. Time spent supervising the TAP and AC delivery to ensure fidelity was also captured; this supervision occurred via bi-weekly debriefings initially and then once monthly after all interventionists were onboarded and confident in TAP delivery.

Healthcare Resource Utilization and Caregiving Time

Dyads’ healthcare resource utilization was captured via caregiver interviews at baseline, 3 and 6 months. Interviewers masked to group allocation administered the Resource Utilization in Dementia (RUD-Lite) questionnaire to collect data on paid and unpaid caregiving time, reason and length of hospital stays (both PLWD and caregiver), number and reason for emergency department visits (PLWD and caregiver), length (in days) of nursing home admissions and/or respite care services (PLWD only), outpatient physician visits (PLWD and caregiver), medications (PLWD and caregiver); assistive devices (PLWD only); and visiting nurse services (PLWD only). (Wimo et al., 2010)

Formal Care and Social Services

Formal care and social services used by the PLWD were captured via caregiver interviews. These included quantifying each of the following: home helper (visits), adult day service use (days), social worker (visits), meals (number delivered), and round-trip transportation (ambulance as well as routine transit trips).

Applying Costs to Time and Utilization Measures

All costs were calculated in $US2017 and were not discounted since our analysis had a time horizon shorter than 1 year. Time costs were converted to dollars by multiplying time spent performing each task by hourly wage rates, obtained from the U.S. Bureau of Labor Statistics (BLS) for the Baltimore metropolitan area in 2017 and inflated by 30.4% to account for fringe benefits (Bureau of Labor Statistics, 2017). Supply costs were estimated based on actual use as reported in financial records.

The two perspectives applied—healthcare sector and societal—are defined by the Second US Panel on Cost-Effectiveness in Health and Medicine (Sanders et al., 2016). The healthcare sector perspective included direct healthcare costs (intervention, hospitalizations, emergency department use, outpatient visits, medications, nursing home admissions, respite care services, assistive devices, and visiting nurse use)(Sanders et al., 2016). We applied gross costing methods to value these services, which applies an aggregate cost to each healthcare service based on its published reimbursement value (Pizzi et al., 2016). Hospitalizations were costed based on Medicare average reimbursements for Diagnosis Related Group (DRG) codes corresponding to the reasons for hospitalization (American Medical Association, 2017). Emergency department use was costed based on the primary reasons for the visit using average costs per the Healthcare Resource Utilization Project (U.S. Department of Health & Human Services). For outpatient visits, we applied Medicare average reimbursements based on Current Procedural Terminology codes corresponding to reported provider type (American Medical Association, 2017). Nursing home use was costed by multiplying the 2017 Medicare urban daily base rate of $175.28 by the length of stay (Acumen, 2018). Respite care days were costed assuming 8 hours of health aide support/day. Assistive devices were costed using Healthcare Common Procedure Coding System codes (Buck, 2017) corresponding to the equipment reported. Medication costs were estimated using wholesale acquisition costs (LexiComp online database) and assuming generic pricing for all drugs for which a generic option was available.

The societal perspective included all these costs plus non-healthcare costs (caregiving and social services such as transportation and meals). Family time spent providing care (unpaid) was captured as the number of hours per day and number of days spent assisting the PLWD with activities of daily living (e.g., toileting, eating, dressing) and separately instrumental activities of daily living (e.g., shopping, house-keeping, laundry). Family time spent caregiving was limited to a maximum of 16 hours/day consistent with previous studies (Penrod et al., 1998; Rattinger et al., 2015; Zhu et al., 2006). Paid caregiving was costed using a similar approach.

Statistical Analysis

We tested each cost component for differences between TAP and AC using a difference-in-differences approach, an established econometric method used widely in health program evaluation (Gertler et al., 2016; Pizzi et al., 2014, 2022) that enables each dyad to serve as their own control by accounting for costs during the 6 months prior to the baseline assessment (reported by caregivers during the baseline interview). In cost evaluations of clinical trials which are not powered to detect cost differences, this approach is in effect a naturalistic comparative effectiveness study assessing between-group differences in mean change from baseline to the endpoint (here, 6 months) (Dimick & Ryan, 2014; Twisk et al., 2018; Wing et al., 2018; Zhou et al., 2016). A series of 21 family-wise Mann-Whitney examined significance of differences using the Bonferroni-corrected significance threshold of α_adjusted = 0.05/21 = 0.0024.

Sensitivity Analysis

To improve the robustness of our trial-based analysis, we performed a univariate sensitivity analysis on specific intervention costs that were posited to be most likely to change if TAP is implemented in routine practice; this is useful since the marginal cost of delivering TAP is likely to change if its delivery is scaled up to a large population. In the sensitivity analysis, resources required to deliver TAP were varied to assess the impact of increased OT case load, stricter geographic limits (e.g., shortened distance and travel time between sites and participants home), and remote components (e.g., web-based OT training in lieu of in-person training). We considered the trial-recorded intervention TAP costs as the high-end of ranges tested in this sensitivity analysis because the study entailed a small case load (approximately 38 dyad visits per week delivered by 4 part time OTs) and higher travel costs then would be possible in routine practice. To construct a low-end scenario, we consulted with the senior investigator on the team. Based on this input and previous research (Gitlin et al., 2010), we reduced debriefing and training time assuming that the OTs could scale up to handle 1.5 times more TAP dyads than the trial. We also limited travel to 40 minutes or 20 miles round-trip to participant homes and training sites, and discounted wages by 20% to approximate TAP delivery in lower cost regions and/or by lower cost interventionists.

Results

Participant Characteristics

Among both PLWD and caregivers, most were female, white, married or living as married, and most had at least a high school education (Table 1). Caregivers were largely spouses or offspring of the PLWD, and most caregivers reported little to no financial difficulty in paying for basic needs. There were no large or statistically significant difference in either baseline characteristics between caregivers or PLWD in TAP versus AC, or baseline differences between the analytical sample and either the main trial sample or those for whom 6-month data were unavailable.

Table 1.

Demographic Characteristics of Caregivers and People Living with Dementia (N = 179) by Treatment Group.

Characteristic	Caregiver			Persons Living with Dementia
	TAP Intervention (n = 93)	Attention Control (n = 83)	p-valuea	TAP Intervention (n = 93)	Attention Control (n = 83)	p-valuea
Age, years (mean (SD))	65.5 (12.5)	66.3 (11.8)	0.669	82.0 (7.4)	81.5 (8.6)	0.666
Caregiver relationship to PLWD (n (%))
Spouse	43 (46.2)	39 (47.0)	0.181	—	—	—
Offspring	40 (43.5)	41 (49.4)		—	—
Other	10 (10.6)	3 (3.6)		—	—
Gender (n (%))
Female	75 (80.6)	70 (84.3)	0.521	55 (59.1)	52 (62.7)	0.634
Male	18 (19.4)	13 (15.7)		38 (40.9)	3l (37.3)
Race (n (%))
White	55 (59.1)	52 (62.7)	0.643	56 (60.2)	54 (65.1)	0.445
Black	34 (36.6)	27 (32.5)		33 (35.5)	26 (31.3)
Asian	1 (1.1)	0 (0.0)		0 (0.0)	0 (0.0)
Native Hawaiian or other Pacific Islander	0 (0.0)	1 (1.2)		0 (0.0)	0 (0.0)
Other	3 (3.2)	1 (1.2)		4 (4.3)	1 (1.2)
Marital status (n (%))
Married or living as married	65 (69.9)	58 (69.9)	0.751	52 (55.9)	42 (50.6)	0.770
Never married	15 (16.1)	12 (14.5)		4 (4.3)	2 (2.4)
Divorced	7 (7.5)	9 (10.8)		7 (7.5)	7 (8.4)
Separated	1 (1.1)	2 (2.4)		0 (0.0)	1 (1.2)
Widowed	5 (5.4)	2 (2.4)		30 (32.3)	3l (37.3)
Education level (n (%))
Less than high school	3 (3.2)	1 (1.2)	0.251	12 (12.9)	l9 (22.9)	0.452
High school	12 (12.9)	14 (16.9)		28 (30.l)	2l (25.3)
Some college	31 (33.3)	30 (36.1)		16 (17.2)	16 (19.3)
College degree	16 (17.2)	21 (25.3)		17 (18.3)	11 (13.3)
Post-graduate degree	31 (33.3)	17 (20.5)		l9 (20.4)	16 (l9.3)
Financial difficulty in paying for basic needs (n (%))
Not difficult at all	53 (57.0)	39 (47.0)	0.548	—	—	—
Not very difficult	17 (18.3)	16 (19.3)		—	—
Somewhat difficult	16 (17.2)	20 (24.1)		—	—
Very difficult	5 (5.4)	6 (7.2)		—	—

Abbreviations: OT = occupational therapist, PLWD = person living with dementia, SD = standard deviation.

^aSignificance testing was performed at the α = 0.05 level with continuous variables tested via t-test and categorical variables tested via chi-squared or Fisher’s exact tests.

Intervention Costs

Intervention costs were $1707/dyad, for TAP and $864/dyad for AC (Table 2). The intervention components mainly contributing to TAP costs compared to AC were time delivering the respective programs ($528 TAP vs. $229 AC) and travel to dyads homes ($542 TAP vs. $266 AC).

Table 2.

Total per-dyad costs to deliver TAP versus Attention Control.

Measures	TAP Intervention (n = 93)		Attention Control (n = 83)
	Total	Mean	Total	Mean	Diff in Mean TAP-AC
Formal staff traininga	$12415	$133	$5974	$72	$62
Screening for program eligibility	$347	$4	$310	$4	$0
Intervention deliveryb	$49064	$528	$19039	$229	$298
Work outside of interventionc	$5314	$57	$5844	$70	−$13
Travel timed	$50446	$542	$22118	$266	$276
Travel mileagee	$17319	$le6	$9908	$119	$67
OT or trained research staff debriefingf	$16319	$175	$7894	$95	$80
Activity supplies	$4802	$52	$500	$6	$46
Assessment materials	$2726	$29	$157	$2	$27
Total	$158753	$1707	$71745	$864	$843

^aTime spent for training for both interventionist and trainer, multiplied by hourly wages was calculated as average regional pay figure of $40.24 per hour for TAP interventionist (OT wage rate), $28.52 for AC staff (Health Educator wage rate) and $48.29/hr for trainer, with an additional 30.40% for fringe benefits.

^bTime spent for intervention by interventionist, multiplied by regional hourly pay including fringe benefits =$40.24 + 30.40% = $52.47 per hour for TAP interventionists, and $28.52 + 30.40% = $37.19 per hour for AC staff.

^cTime OTs/AC staff spent on appointment reminder phone calls, prescription management etc.

^dEstimated based on average travel time in Google Map, multiplied by regional hourly pay including fringe benefits =$40.24 + 30.40% = $52.47 per hour for TAP interventionists, and $28.52 + 30.40% = $37.19 per hour for AC staff.

^eEstimated based on distance to participants’ homes per session. 2017 government rate of $0.535 per mile was applied.

^fTime spent for intervention by interventionist, multiplied by regional hourly pay including fringe benefits =$40.24 + 30.40% = $52.47 per hour for TAP interventionists, and $28.52 + 30.40% = $37.19 per hour for AC staff.

Healthcare Sector Perspective Analysis

In the 6 months before baseline inpatient costs for dyads in TAP and AC were $498 and $546, respectively (Figure 1). In the 6-months after baseline, inpatient costs for dyads in TAP increased by a lower amount than participants in AC resulting in cost savings for TAP (differential change -$157, 95%CI: −$1,460, $1148). The costs savings for TAP compared to AC were observed for outpatient care (differential change-$6; CI: −$546, $534), nursing home (differential change −$160; CI: −$900, $581), respite care (differential change: −$161; CI: −$341, $19), and medications (differential change −$3080; CI: −$9,755, $3595). TAP compared to AC resulted in an increase in costs for assistive devices (differential change $25; CI: −$15, $64) and emergency room visits per-dyad (differential change $2282; CI: −$2,790, $7354). Overall, TAP saved dyad healthcare costs compared to AC (differential change −$1,229, 95%CI: 1 −$10,496, 7,898, p = x, Table 3). When accounting for intervention costs, the total net savings of TAP compared to AC was $457 per-dyad (95%CI: −$9,654, $8741; NSS).

Figure 1.

Healthcare costs by group, people living with dementia and caregivers. Abbreviations: PLWD = people living with dementia; TAP = tailoring activities for PLWD and caregivers (CG); AC = attention control.

Table 3.

Mean Per-Dyad Costs in the Base Case.

Measures	TAP Intervention (n = 93) 6 Baseline months Diff			Attention Control (n = 83)
	Baseline	6 months	Diff	Baseline	6 months	Diff	Diff-in-Diff TAP-AC (95% CI)	Diff p-value
Healthcare sector perspective: Direct healthcare costsa
Inpatient hospitalizations	$498	$1229	$731	$546	$1434	$888	−$157 (−$1460, $1148)	0.935
Emergency department	$3282	$4678	$1395	$5417	$4530	−$886	$2282 (−$2790, $7354)	0.264
Outpatient visits	$945	$982	$36	$782	$825	$43	−$6 (−$546, $534)	0.406
Medications	$4735	$4055	−$680	$5882	$8282	$2400	−$3080 (−$9755, $3595)	0.948
Nursing home admissions	$79	$492	$413	$0	$572	$572	−$160 (−$900, $581)	0.266
Respite care services	$110	$51	−$59	$0	$102	$102	−$161 (−$341, $19)	0.365
Assistive devices	$21	$27	$6	$37	$18	−$19	$25 (−$15, $64)	0.211
Visiting nurse	$56	$33	−$22	$29	$50	$21	−$43 (−$141, $54)	0.278
Total healthcare sector costsa	$9727	$11548	$1821	$12693	$15813	$3120	−$1299 ( $10496, $7898)	0.342
Total healthcare sector costsa accounting for program delivery costs	—	$13255	$3528	—	$16677	$3984	−$457 (−$9654, $8741)	0.017
Societal perspective: Formal care and social services costsb
Home helper	$1698	$1892	$194	$1244	$1294	$51	$143 (−$906, $1192)	0.932
Social worker	$9	$10	$1	$42	$4	−$38	$38 (−$22, $99)	0.254
Adult day care	$452	$416	−$36	$540	$476	−$64	$28 (−$381, $436)	0.581
Transportation	$79	$83	$4	$59	$68	$9	−$5 (−$100, $90)	0.456
Meals	$25	$25	$0	$89	$88	−$2	$2 (−$80, $83)	0.855
Subtotal	$2263	$2426	$163	$1974	$1931	−$43	$206 (−$929, $1341)	0.849
Societal perspective: Caregiving time costsb, c
Informal (unpaid) caregiving	$7205	$8671	$1466	$8947	$9842	$894	$572 (−$2270, $3414)	0.648
Formal (paid) caregiving	$285	$45	−$240	$0	$0	$0	−$240 (−$605, $125)	—
Subtotal	$7490	$8716	$1226	$8947	$9842	$894	$332 (−$2522, $3168)	0.838
Total societal costsb	$19480	$22690	$3210	$23614	$27586	$3971	−$761 (−$10133, $8611)	0.364
Total societal costs accounting for TAP/AC costsb	—	$24397	$4917	—	$28450	$4835	$81.6 (−$9528, $9128)	0.199

Abbreviations: CI, confidence interval.

^aDirect healthcare costs measured from healthcare sector perspective.

^bSocietal costs included direct healthcare costs, informal care, and value of care time.

^cExcludes caregiver productivity losses due to potential overlap between this measure and informal (unpaid) caregiving. Difference observed in TAP group was −$130 and in AC group it was $151 with a mean difference in difference of −$281 (SEM = 398.7).

Supplementally, we report costs and service use separately for the PLWD and caregiver (Additional Files 2 and 3).

Societal Perspective Analysis

From a societal perspective (healthcare plus formal care and social service cost) TAP resulted in cost savings compared to AC (differential change $761 95%CI: −$10,133, $8611). After inclusion of intervention costs, the TAP group had slightly higher net total costs per-dyad (differential change $81.60; 95%CI: −$9,528, $9128). Formal care and social services costs per-dyad (Table 3) were similar for TAP and AC (differential change: $206; CI: $929, $1341). Cost differences between TAP and AC were not statistically significant.

Sensitivity Analyses

The sensitivity analysis (Figure 2) indicated that limiting travel time to 40 minutes or mileage to 20 miles round trip had the largest impacts (per-dyad cost reductions of $280 and $113, respectively). TAP could cost as low as $1152 per-dyad if all the efficiencies modeled in our sensitivity analysis are simultaneously achieved. TAP costs could be further reduced if trainings were online, the two assessment visits were combined into one and the last two caregiver sessions were combined; these are all feasible modifications to the program that would lower costs.

Figure 2.

Sensitivity analysis.

Discussion

Nonpharmacological interventions like TAP are critically needed as they address quality of life and what matters to families living with dementia. Findings from this cost analysis reveal the total costs of delivering TAP, which is essential for health and social service decision makers. Results indicated that, although both study groups experienced higher healthcare costs in the 6 months after enrollment versus the 6 months prior to enrollment, the TAP group experienced a smaller increase in healthcare costs than AC. The difference in these increases is what was quantified as the savings from TAP. The parent trial was powered to detect differences in PLWD behavioral outcomes (e.g., agitation and aggression). The cost evaluation is secondary analysis, we observed large variation in the measures and the trial was not powered to detect significant differences.

Results also signal that caregiver healthcare service use may be affected by TAP and though the mechanism of this effect is not yet clear, outcomes from this trial demonstrated improved caregiver wellbeing and confidence for those in TAP versus AC at 6 months. Moreover, TAP caregivers were more likely to report that participation better enabled them to provide care and made life easier. Future economic research on nonpharmacological dementia interventions should be designed to examine the relationship between caregiver wellbeing and healthcare costs.

The healthcare sector perspective is particularly relevant to informing insurance payers and providers about the impact of TAP relative to AC on healthcare service use and costs whereas the societal perspective is broader and accounts for not only the healthcare sector but also social services and caregiving costs. From the societal perspective, TAP was associated with a $761 (CI: −$10,133, $8611) cost savings over 6-months without considering intervention costs. After including intervention costs, TAP group costs were slightly higher. A post-hoc economic analysis of a previous pilot trial found TAP to be cost-effective compared to usual care (Gitlin et al., 2010). In this earlier work, we estimated that TAP costs $1.10/day to save 1 hour of caregiving time. This model was based on a small sample and the pilot trial did not capture data on healthcare or social service utilization.

With regard to specific costs measured, medication costs were a driver of the savings; for the PLWD, one individual in AC received a costly inhalation medication while a caregiver in AC reported an expensive subcutaneous biologic drug for osteoporosis. If these two medications were omitted, TAP would not have had a cost saving regardless of whether the healthcare sector or societal perspective is taken. However, there was no reasonable justification to exclude these medications from our analysis.

Noteworthy is that TAP costs were compared to a control group that received a service that rather than usual (i.e., families would not routinely receive up to 8 home visits for disease education). Thus, the savings for TAP are diminished by comparing it to a service that does not exist in practice.

It is difficult to compare our findings to other cost analyses of nonpharmacological dementia interventions due to a paucity of publications on this topic and heterogeneity of the few studies that exist. A prior cost analysis conducted by Nichols et al. on the REACH II dementia intervention over 12 months found healthcare costs (Medicare specifically) were not impacted compared to controls, but a separate sample of PLWD receiving REACH through the Veterans Administration experienced 33.6% lower total healthcare costs which equated to savings of $4338 annually (Nichols et al., 2017). However, a significant limitation of this study was that it did not account for the cost of delivering REACH, and the perspectives used (Medicare and VA) are narrower than the healthcare sector perspectives employed in our trial. Rajha and colleagues recently published a cost benefit analysis of the Caring for Older Persons in their Environment (COPE) intervention in Australia (Rahja et al., 2020). While they employed a societal perspective, a much longer time horizon was projected (2016–2024), a control scenario was not used as a comparator, medication costs were not reported, and the findings were specific to the Australian system. They projected either a small cost or savings for most cost components, except for PLWD hospitalizations among those receiving COPE. A recent U.S. cost analysis of the COPE intervention integrated with the Connecticut Home Care Program for Elders examined difference-in-difference costs from the healthcare decision maker perspective, albeit using a different time horizon than TAP (12 months for COPE-Connecticut vs. 6 months for our TAP study) (Fortinsky et al., 2016; Pizzi et al., 2022). The COPE program integrates and extends the TAP approach. The COPE cost analysis showed a savings associated with the intervention as compared to usual care, driven by savings in emergency department visits, inpatient hospitalizations, and nursing home stays.

Our study critically contributes to the literature by detailing the costs associated with TAP using microcosting, since home health providers would need to understand such costs before adopting the program. Unlike formal medical care and services, behavioral programs such as TAP do not have a clearly established marketplace cost or reimbursement mechanism; thus to advance discussions about payment mechanisms, it is crucial to understand their intervention costs. We calculated TAP costs as $1707 per-dyad. Although the total cost of TAP observed in this randomized trial is $765 higher than in a prior pilot cost study of TAP (Gitlin et al., 2008), the difference can be explained by the population targeted (i.e., patients with agitation), inflation in medical service costs over time (pilot costs were calculated 9 years before the current trial), a larger travel radius in this study (which drives not only mileage costs but also interventionist time spent traveling), and higher training costs as more staff were involved in training and there was more turnover of occupational therapists compared to the pilot study. Importantly, TAP can be delivered as low as $1152 per-dyad if all of the operational efficiencies included in our sensitivity analysis are achieved in practice. Further efficiencies could be achieved if not all 8 home sessions are needed. On average participants received 6 to 7 sessions, and some sites that have adapted TAP, are experimenting with reducing the total number of visits and using telehealth modalities. Since the completion of the trial, the TAP training has been revised to be delivered via a self-paced online modality involving six 50 minutes modules, and it may be possible to deliver components of the intervention virtually too without compromising effectiveness. Remote adaptation of TAP is necessary to facilitate translation to other parts of the US and world, with versions of the program being implemented in Scotland, Australia, Brazil, Italy, and Hong Kong among others.

Another important contribution of our analysis is that we examined costs from both healthcare sector and societal perspectives. The healthcare sector perspective is particularly relevant to healthcare payers and policymakers who seek to understand the cost of delivering treatments or programs which do not currently have a reimbursement mechanism, and whether financial savings could result from implementing TAP. Considering the bigger picture beyond our results, the measures we employed in this cost analysis could inform the design of value-based healthcare payment models which employ outcomes-centered contracts to improve dementia healthcare quality. One such payment model has recently been proposed by the Alzheimer’s Association (Reuben et al., 2020); though it is focused on care delivered by physicians and physician extenders (physician assistants and advance practice nurses) through Medicare fee-for-service plans and calls for integration with community providers using a capitated and performance-based framework. In this model, physicians could refer PLWD to TAP, which would be delivered in the community by a home health agency. However, it remains unclear whether this payment model will achieve widespread adoption and if so, whether capitation amounts will be sufficient to include TAP based on the intervention costs inclusive of the potential efficiencies we report herein, and/or whether performance metrics will include outcomes that can reasonably be impacted by TAP. Nevertheless, the detailed TAP resource use and cost data provided in this paper, as well as participants’ willingness to pay for TAP which we have reported elsewhere, could be useful to developing cost-sharing thresholds ($36.00 per session with 95% CI: $26.72–$45.27) (Jutkowitz et al., 2019) are essential to informing the discussion. Our data may also inform TAP adoption through Medicare Advantage plans, which were recently expanded to optionally include supportive services via the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act (CHRONIC Care Act of 2017, 2017).

Limitations

There are several limitations to our analysis. First, we used the Bonferroni correction method to set significance thresholds which we believe to be conservative. However, this approach, coupled with the sample size limitations, did not allow sufficient power to fairly assess significance. This challenge raises the question as to how to design future research that is powered not only to detect cost differences but identification of subpopulations where TAP may have the largest financial impacts. In addition to the obvious which entails enrolling larger group sizes in randomized controlled trials, other designs that employ real world data (such as health care claims, electronic health records, and patient-generated data) should be considered. Choice of comparator is another factor which impacts sample size requirements and in this trial, we used AC which may be more effective than doing nothing. Use of AC was essential to examining the trial’s main outcomes, since the attention provided to PLWD and caregiver was hypothesized to contribute to program effectiveness.

Second, the costs reported may not be generalizable to other populations (e.g., more cognitively impaired) or geographic areas (e.g., outside of the Baltimore metropolitan region). Third, the trial employed a 6-month time horizon, which is relatively short in such economic analyses and prohibits estimation of TAP’s long-term financial implications. In addition, our measures did not capture out-of-pocket healthcare and medication costs. Further, due to the complexities of payment for services for PLWD, we included social worker and adult day care in the societal perspective, though some state Medicaid programs cover these services in which case they would fall under the healthcare sector perspective. Finally, we captured quality-adjusted life year (QALY) data alongside the trial but due to miniscule differences between TAP and AC, did not utilize this measure to compute cost-effectiveness ratios. Our investigative team has accumulated evidence suggesting that QALY measures are not sensitive to change resulting from behavioral programs for older adults in the context of clinical trials and particularly for PLWD and caregivers (Ray et al., 2019).

Conclusions

Findings reveal TAP intervention costs and patterns of healthcare, caregiving, and social service costs over 6 months. We show cost differences between TAP and a control group which received services that would not routinely be provided to families, thus, providing a conservative estimate of cost differences. The sensitivity analysis on TAP costs informs scalability in terms of how to deliver the program more efficiently in practice. Given the emergence of novel value-based payment models for dementia, results are important to informing the considerations of behavioral interventions, such as TAP, by healthcare decision makers.

What this paper adds

• In this randomized controlled trial, the Tailored Activity Program (TAP), which tailors activities to interests and abilities of people living with dementia and instructs caregivers in their use, resulted in cost savings compared to caregiver disease education (attention control), from both healthcare sector and societal perspectives.

• The costs of TAP identified in this trial serve as an important benchmark for its future implementation and can be used to identify approaches to deliver it more efficiently.

Applications of study findings

• Findings on the cost of TAP inform providers who are planning to implement community-based nonpharmacological dementia programs.

• The healthcare and social service cost measures and methods employed in the TAP trial serve as an example that other dementia researchers can apply to their own work.

• Healthcare policymakers seeking to understand the financial implications of TAP can factor the cost study findings from this paper into their funding decisions.

Availability of data and materials

The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.