Diabetes in the Workplace

Direct Medical Costs of Diabetes

About one of every seven health care dollars is spent on diabetes. (Rubin 1994, Laffel 1998) The National Center for Health Statistics pegs annual medical care expenditures for diabetes in a range of $34.3 to $63.7 billion (Hodgson 1999) Much of this cost goes to treat chronic complications, unrelated conditions and comorbidities. As shown in Figure 3.1, hospital bills consume more than half the total.

Diabetes Costs:

Similarly, of the $44.1 billion estimated by the ADA to be spent nationally on diabetes medical care each year, $27.5 billion (62%) goes for inpatient care. Diabetes accounts for an estimated 13.9 to 24.5 million hospital days annually, with each day costing about %1,500 to $2,000. (Ray 1998, Laffel 1998, Rubin 1994) the disease probably also leads to about 30 million physician-office visits each year, adding %10.9 billion in direct costs. (Ray 1998)
The methods for estimating diabetes costs are diverse. Some are based on administrative data sets while others make projections based on costs for individuals or for a cohort with diabetes. Some designs are “top-down” and others are “bottom-up.” (CDC.gov(2) 2000) While the various study methods can (and should) be debated, the impact of diabetes on the bottom-line health care budget of employers is unquestioned.

How Much More Expensive?

The per-person and per-event diabetes costs provide a practical perspective that may be relevant to purchasers. All told, the annual per-patient health costs average $10,071 for a person with diabetes versus $2,669 for someone without the diagnosis, a 3.8X increase in costs. (Ray 1998, Rubin 1994) These U.S. estimates have been duplicated in Sweden, where the excess cost of care for diabetic men and women (mostly type 1) was found to be $4,743 and $4,976, respectively, in just the first year after diagnosis ? a per capita excess cost of about 5.6X. (Jonsson 2000) In other studies, the excess per-person diabetes-related cost has been calculated as 2.4X or 3X higher in U.S. health maintenance organizations (HMOs) (Selby 1997, Nichols 2000) and 1.7X higher in a U.S. Medicare population. (Krop 1999)

Again, different methodologies and populations lead to varying estimates. But the consensus is clear: diabetes at least doubles or triples the typical corporation?s health care costs.