Diminished Financial Capacity and Impairment

We recently read a New York Times article, Money Woes Can Be Early Clue to Alzheimer’s, as one of a series called The Vanishing Mind,  that  led us to look further into the subject.

What we found was a scholarly article about a 1-year longitudinal study, Declining financial capacity in mild cognitive impairment published in a 2009 issue of the journal Neurology.  Sections of that article follow:

Financial capacity has emerged as a key instrumental activity of daily living in understanding functional impairment and decline in patients with mild cognitive impairment (MCI) and dementia. Financial capacity comprises a broad range of conceptual, pragmatic, and judgment abilities, ranging from basic skills, such as counting coins, to more complex skills, such as paying bills and managing a checkbook.

The capacity to manage one’s own financial affairs is critical to success in independent living. Impairments in financial skills and judgment are often the first functional changes demonstrated by patients with incipient dementia.

Cross-sectional studies have demonstrated impairments in financial skills in patients with MCI. Studies using informant report have found that financial skills are impaired in some individuals with MCI and that such impairments can predict subsequent diagnosis of Alzheimer disease (AD). Using a direct assessment approach, our group has found that patients with MCI performed significantly below older controls on complex financial domains and overall financial capacity.

Participants: The present study was a cohort study of 76 cognitively healthy older controls and 87 patients with amnestic MCI who were evaluated between June 2004 and October 2008 and diagnostically characterized through the Alzheimer’s Disease Research Center (ADRC) at the University of Alabama at Birmingham (UAB) as part of an ongoing longitudinal study of functional change in MCI. The ADRC diagnostic consensus conference team consisted of neurologists, neuropsychologists, a geriatric psychiatrist, and nursing staff. The consensus team was blinded to the results of our financial capacity measure when diagnosing participants.

Study measures. Financial capacity was directly assessed at baseline and 1-year follow-up using the Financial Capacity Instrument (FCI). The FCI is a standardized psychometric instrument based on a conceptual model that views financial capacity at 3 levels: specific financial abilities (tasks), broader financial activities (domains) important to independent functioning, and overall financial capacity (global scores). Tasks measure simple or complex knowledge or skills. An example of a simple task is counting coins and currency, whereas a complex task is preparing bills for mailing.

We used a standardized, psychometrically normed, direct assessment measure of financial capacity to investigate change over time in financial skills in patients with MCI. At baseline, both MCI subgroups showed impairment in financial abilities relative to controls, indicating that decline in financial skills had begun in the MCI group before diagnosis.

Checkbook management item responses were further analyzed to describe common errors made by MCI converter participants. Items in task 4b commonly missed by MCI converter participants included writing the correct name on the payee section of the check, writing the correct payment amount in the debit field in the checkbook register, and calculating and writing the correct balance in the checkbook register.

Clinicians should proactively monitor patients with MCI for declining financial skills and advise patients and families about appropriate interventions. Specifically, clinicians can discuss strategies to support, oversee, and protect financial activities of patients with MCI. For example, family members can oversee a patient’s checking transactions, contact the patient’s bank to detect irregularities such as bills being paid twice, or become cosignatory on a checking account so that joint signature is required for checks above a certain amount. Online banking and bill payment services are additional options for families.

The entire article may be read online.