An analysis of direct medical care cost differences between Alzheimer’s and non-Alzheimer’s patients enrolled in a managed care organization (MCO) was conducted. OBJECTIVE: The purpose of this study was to determine a difference between direct medical costs of Alzheimer’s patients and elderly non-Alzheimer’s patients. METHODS: Direct medical costs were collected for a one-year period for the MCO’s Alzheimer’s population consisting of 266 patients. Direct medical costs were also collected for this period for the population of elderly patients without a diagnosis of Alzheimer’s disease (AD) (n=13,553). These costs did not include nursing home or prescription costs. Medical costs from the population databases were compared. RESULTS: A greater proportion of AD patients were hospitalized during the year (38.0% vs. 16.3%) and mean length of hospital stay was slightly longer for AD patients (5.7 days vs. 5.4 days). On a per patient basis, AD patients received more inpatient hospital services (51.5 vs. 43.3), outpatient hospital services (11.6 vs. 10.6), and physician office services (15.8 vs. 14.8) than non-AD patients. As a proportion of total costs, non-AD patients had a greater proportion associated with outpatient services (67.9% vs. 43.8 %), whereas AD patients had a higher proportion associated with inpatient services (48.9% vs. 30.2%). The mean cost per person for services for AD patients was $4,440.67 (s.d.=7,148.14) compared to $2,753.12 (s.d.=5,465.61) for non-AD patients, yielding a difference of $1,687.55 per patient that may be attributed to AD. CONCLUSION: The Alzheimer’s population of this MCO utilized more services and had a higher mean annual cost per person than the non-Alzheimer’s elderly population.