Community-based care for dementia comes at a lower sticker price, but the hidden costs of informal care from friends and relatives mean that long term care centers are more affordable, German researchers have concluded.

Dozens of researchers from all of Germany examined the prices of treating people with dementia in formal centers or at home- and community-based settings. At face value, it cost about $6,000 more per year to treat people with dementia in nursing homes than out in the community.

But, digging deeper, the team also looked at the amount of unpaid, informal care used by community residents. Using Germany’s minimum hourly wage as a guide for the price of that informal care, the researchers found that “opportunity costs for lost leisure time … or lost production in the formal economy … resulted in significantly higher costs for living in the community,” Hamburg Center for Health Economics and Health Services Researcher Hans-Helmut Konig says. 

“When informal care provided by families and friends was valued by replacement costs, mean annual costs of care for community-dwelling patients was about 11,000 Euros ($16,170) higher than for patients living in nursing homes after controlling for impairment in (instrumental) activities of daily living,” Konig writes in the latest issue of JAMDA.

Even though there’s “no universally accepted gold standard” in putting a price tag on informal care, Konig and his colleagues valued it much lower than the mean wage of the average German health care worker. What struck Konig and his colleagues was the high price that informal care demanded from their country’s productivity.

“This is noteworthy because with further increasing labor force participation rates due to demographic and social change, opportunity costs of informal caregiving, in particular by the care recipients’ children, would increasingly consist of lost production rather than lost leisure time,” Konig says.

The German team’s findings runs up against earlier research, including studies from the Unite States, that found that monthly costs for “institutionalized” residents were anywhere from $1,000 to more than $2,900 more expensive than keeping folks at home or with relatives or friends. But those study authors “did not state the applied monetary value per hour of informal care,” Konig says.

Here at home, experts seem divided in how to add up the cost of informal care. Last year, the Alzheimer’s Association said that family and friends gave up more than 17.5 billion free hours to care for people with dementia. The association valued the cost at $216 billion.