Dementia, as well as high blood pressure, diabetes, and coronary heart disease, has become the four largest killers which threaten the elderly's health.  As the population all over the world is aging fast, the number of elderly who suffer from dementia has been increasing speedily, thus causing a huge burden of disease to society, families and patients. At present, however, it is not that accurate to employ Disability Adjusted of Life Years (DALY) to calculate the disease burden of dementia because dementia is characterized by long disease course and multi stages and elder dementia sufferers of different health status have difference within cognitive competence and physical activity capacity. Therefore, multi-state Markov Model has been introduced in this paper to formulate an improved calculating analysis model on DALY among patients suffering from Alzheimer's. Firstly, set up weight coefficient of disease and calculate the matrix of transition probability for elderly dementia based on different Markov status. Then, formulate a certain number of conversion models within/between each stage based on different disease characteristics of different stages of elderly dementia. Finally, measure the improved the DALY of patients suffering from Alzheimer's during the whole lifespan by adding up the DALYs of dementia sufferers in all stages. This analysis model has taken the features of elderly dementia into consideration and can truly reflect the Years Lived with Disability of Alzheimer's patients.