Description:

Aleksandra Paluszynska (Northwestern University): Hazy decisions: The effect of dementia on medical decision-making

Abstract: I estimate the causal effect of having dementia on the course of treatment for an unrelated disease by leveraging differences in relative time of onset of dementia and the other condition in a difference-in-differences event-study framework. To demonstrate this approach I look at heart attacks and show that after accounting for individual and calendar time fixed effects the "dementia first"  and "heart attack first" groups exhibit parallel trends in health care utilization before the heart attack. I find that health care cost is persistently lower following a heart attack for those who had dementia already and that the effect is driven by decreases in frequency of care. Dementia patients who experience a heart attack reduce the number of interactions with the health care system, while those who do not yet have dementia markedly increase their frequency of care in response to the health shock. I establish that this finding holds universally for a variety of other acute and chronic conditions and is not driven by higher mortality among dementia patients. Long-term reductions in medical care received are driven by care over which patients have the most discretion such as pathology and lab, which points to reduced follow-up care and treatment adherence as possible mechanisms behind my estimates.