Outpatient health care costs of dementia can be significantly reduced if the disease can be diagnosed and treated at a fairly early stage, reveals new research.

Pre and post-diagnosis healthcare costs decreased by $1,741 in the year after the cognitive impairment was found in the patients as against the costs incurred when diagnosis was delayed, reports the study, the ramifications of which was presented recently at the Alzheimer's Association International Conference on Alzheimer's Disease 2010.

Dementia Demonstration Project (DDP) conducted a multicenter pilot program at seven Veterans Administration (VA) clinics, screening a total of 8,278 veterans 70 years and older, who had no previous diagnosis of dementia.

The veterans were screened for cognitive impairment during a routine primary care visit using the two-minute, five-point, Mini-Cog test, where a clock-drawing test is combined with a three-word recall test. The cut-off for a positive screen result was three points or less.

Of the total, 25 percent failed the initial screen and were offered further evaluation. Of these individuals, only 34 percent consented to a comprehensive evaluation. Of this group, 95 percent were diagnosed as having cognitive impairment and 76 percent had full-blown dementia.

Researchers calculated that the mean total healthcare cost in the year before diagnosis (minus the $800 cost of the evaluation) was $13,378. In the year after diagnosis, it decreased to $11,636 for a mean difference of $1,741.

"Even after subtracting the cost of the workup and evaluation, we were able to save more than $1,700 per patient on an average. This is very important because I don't think we were convinced that making an early diagnosis of dementia would save money in the short-term,’’ said principal investigator, J. Riley McCarten, MD.

According to Dr. McCarten, the rate of cognitive impairment was pretty high, and this translates into potential cost savings of billions of dollars.