Older adults with a greater ability to understand and use financial concepts have a lower risk of hospitalization, according to a study in the July issue of Medical Care.
The study involved 388 older adults without dementia enrolled in the Rush Memory and Aging Project, which includes participants from senior housing facilities and retirement communities in the Chicago area, as well as individual homes. Participants were assessed for financial literacy and cognition. The assessment required performance of simple calculations (numeracy) or the knowledge of financial concepts such as stocks, bonds and compound interest.
Each participant received a financial literacy score on a 23-point scale, which was evaluated as a predictor of the risk of hospitalization, with adjustment for other factors. Researchers used data on hospitalizations from Medicare claims records.
Overall, the study found 117 participants (30 percent) were hospitalized over an average follow-up of 1.8 years. Among that 30 percent, a third were hospitalized multiple times.
After adjusting for age, sex, education and cognition, researchers said they found a link between better financial literacy and lower risk of hospitalization. Older adults who were hospitalized had average financial literacy scores of 11 points compared to 13 points for those who were not.
That link remained after further adjustment for factors such as income, physical activity and other health indicators.
Researchers said they found through their secondary analyses that the link between financial literacy and hospitalization risk was primarily driven by the knowledge of financial concepts, not the ability to do calculations.
"Higher financial literacy is related to a lower risk of hospitalization in older persons without dementia, after adjusting for cognitive, health, functional, and socioeconomic factors," the study's authors concluded. "The ability to understand and utilize financial concepts may represent a potentially modifiable risk factor for hospitalization in later life."
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