Dementia Could Be Causing Poor Financial Decisions Years Before Diagnosis: Study

Individuals who develop dementia are “significantly” more likely to have debts that are delinquent or in collection and to have credit scores that decline to the point of being subprime years before they were diagnosed, according to the results of a study that were published yesterday in a medical journal.

Long considered to be one of the earliest signs that an individual is suffering from a cognitive decline, the ability to make sound financial decisions is now being looked at as a means of helping detect a problem that affects 15% of individuals in the United States over the age of 70.

In some cases, according to the study’s lead author, financial symptoms are showing up as much as six years before the individual is clinically diagnosed with dementia.

While there is little that companies in the accounts receivable management industry may be able to do about this, being able to understand the root-cause of a situation where an individual is not paying his or her debts can help identify potential solutions.

The researchers looked at 80,000 individuals who lived on their own — the clearest sign that someone is in charge of making financial decisions — and who were on Medicare. To determine if someone was making poor financial decisions, the researchers looked for individuals who had bills that were at least 30 days past due for two or more months and whose credit scores had dropped below 620.

If older individuals are getting into financial trouble, it could present problems for them down the road, should that money be needed to pay for nursing homes, assisted-care facilities, or other types of assistance.

The findings are likely “the tip of the iceberg of the financial problems” being experienced by these individuals, said Lauren Nicholas, and health economist and associate professor at Johns Hopkins Bloomberg School of Public Health, who authored the study.

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