Top drivers of diabetes care costs

In 2012, the American Diabetes Association (ADA) estimated the total economic burden of diagnosed diabetes patients to be $245 billion, which accounts for $176 billion in direct costs and $69 billion in indirect costs. That breaks down to one in 10 healthcare dollars being spent on treating diabetes and its complications. What’s more, one in five healthcare dollars is spent caring for people with diabetes.

According to the ADA, individuals who are diagnosed with diabetes have healthcare costs that are 2.3 times higher than someone who is not diagnosed with diabetes. People with diagnosed diabetes incur average medical expenditures of about $13,700 per year; $7,900 of that is attributed to diabetes.

“The main driver of healthcare costs for diabetes is the increased prevalence of this disease,” says Matt Petersen, managing director of medical information, ADA, which is headquartered in Alexandria, Virginia. From 2007 to 2012, the total cost of diabetes in the United States increased by 41%. Despite this increase in total costs, individual costs of diabetes care have risen less than medical inflation-while total national health expenditures rose by 24% from 2007 to 2012. Per capita diabetes-related costs rose by only 19%. “The difference is that the number of Americans with diagnosed diabetes increased by nearly five million. Increased prevalence, not increased costs per patient, is the driving force behind the increased economic burden of diabetes.”

Breaking down the costs

The largest direct cost of diabetes care is hospitalization, accounting for 43% of costs in 2012. In 2002, hospitalizations accounted for 50% of costs. “People with diabetes are hospitalized at a greater rate and for longer stays than people without diabetes,” Petersen says.

In addition to inpatient hospital care, the ADA reports that the largest components of medical expenditures are:

• Prescription medications (18%)
• Anti-diabetic agents and diabetes supplies (12%)
• Physician office visits (9%)
• Nursing/residential facility stays (8%)

Next: Costs based on age and gender

A study published in American Journal of Preventative Medicine looked at the cost of care for type 2 diabetes based on age of diagnosis and gender. It reported that in men diagnosed at ages 25 to 44 years, 45 to 54 years, 55 to 64 years, and 65 years or older, the lifetime direct medical costs of treatment and diabetic complications were $124,700, $106,200, $84,000, and $54,700, respectively. In women, the costs were $130,800, $110,400, $85,500, and $56,600, respectively.

People with diabetes who do not have health insurance have 79% fewer physician office visits and are prescribed 68% fewer medications than people with insurance coverage-but they also have 55% more emergency department visits than people who have insurance, according to ADA.

Indirect factors and their costs, as reported by ADA, are:

• Inability to work as a result of disease-related disability ($21.6 billion)
• Reduced productivity while at work ($20.8 billion) for the employed population
• Lost productive capacity due to early mortality ($18.5 billion)
• Increased absenteeism ($5 billion)
• Reduced productivity for those not in the labor force ($2.7 billion)

“By their nature, intangible costs-pain, suffering, and reduced quality of life­-cannot be quantified in dollars,” Petersen adds.

The future outlook

A study published in Population Health Metrics projected that as many as one in three U.S. adults could have diabetes by 2050 if current trends continue. “Because diabetes prevalence is still increasing, costs will continue to increase,” Petersen says.

“We can work toward and hope for a reduction in costly complications with improved diabetes care; however, improved care has a cost,” Petersen concludes. “The United States has made a serious commitment to diabetes prevention efforts. Prevention programs have been proven to be successful and cost-effective. If implemented widely, these programs may reduce the costs of diabetes and improve quality of life.”

Karen Appold is a medical writer in Lehigh Valley, Pennsylvania.