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As a consequence, several cost-of-illness studies, aimed at assessing the total costs associated with the care of an AD patient or with individual components thereof, have been conducted, with a view to identifying areas in which costs might be reduced. For example, the Costs of Dementia (CoDem) study, described here, aims to give a profile of the total economic costs ofAD in Italy. While this study found the number of Instrumental Activities of Daily Living lost to be the principal predictor of the weekly costs for home care, other studies have reported a correlation between total cost and Mini-Mental State Examination (MMSE) score. The basis for a cor relation between cost and disease severity is discussed. Pharmacoeconomics aims to assess the cost effectiveness of interventions that may form part of an overall management strategy in AD. As institutionalization is the largest cost element in the care of any AD patient, efforts at cost containment have focused on maintaining patients at home for as long as possible. The results of studies on a number of interventions, namely, screening, reality orien tation therapy, special care units, family interventions, and drug treatment, are discussed, although the costs and, indeed, the long-term benefits associated with many of these remain unknown. Although information concerning costs is essential in health resource allocation, it is also vital that meaningful ways in which to assess quality-of- life issues be developed as the basis for genuine cost-benefit judgments. 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