Insights

Reflections on the Staggering 2017 Economic Costs of Diabetes in U.S.

Malinda Peeples, RN, MS, CDE
April 25, 2018

Malin­da Peeples, MS, RN, CDE, FAADE, is a nation­al­ly rec­og­nized dia­betes edu­ca­tor and clin­i­cal and infor­mat­ics nurse spe­cial­ist in the field of dia­betes care for more than 30 years. Over the last decade she has been advanc­ing the role of dig­i­tal health and ther­a­peu­tics to improve care and lessen its bur­den with­in health­care deliv­ery sys­tem trans­for­ma­tion. At Well­doc, she’s the VP of Clin­i­cal Ser­vices, Pro­grams and Research. She shares her per­spec­tives on the stag­ger­ing eco­nom­ic costs of dia­betes recent­ly report­ed by Amer­i­can Dia­betes Asso­ci­a­tion (ADA) i

n this Insights inter­view.

Q1: Has the Amer­i­can Dia­betes Asso­ci­a­tion (ADA) his­tor­i­cal­ly offered assess­ments of the eco­nom­ic costs of dia­betes in the U.S.?

M. Peeples: Yes, over the last twen­ty years, start­ing in 1997, the ADA has pro­vid­ed an assess­ment about every 5 years. ADA’s main goal with these quin­quen­ni­al analy­ses is to pro­vide data to inform and refine pub­lic and pri­vate efforts to decrease the impact of dia­betes on indi­vid­u­als and soci­ety-at-large.1

The analy­ses use a vari­ety of demo­graph­ic data along with oth­er data sources, for exam­ple, Medicare and com­mer­cial insur­ance claims data, long-term care data, and CDC sur­veys of Amer­i­cans. Resources that look at employ­ment absen­teeism, dis­abil­i­ty and pre­ma­ture mor­tal­i­ty are used to deter­mine indi­rect costs.

Q2: What are con­sid­ered “direct” and “indi­rect” costs?

M. Peeples: “Direct” costs are those asso­ci­at­ed with health care for peo­ple with dia­betes includ­ing: hos­pi­tal­iza­tions and med­ical pro­ce­dures, emer­gency room vis­its, out­pa­tient med­ical care, med­ica­tions for dia­betes and relat­ed con­di­tions and com­pli­ca­tions, long term care and more.

Indi­rect” costs include work­site absen­teeism, reduced work pro­duc­tiv­i­ty for those employed, reduced pro­duc­tiv­i­ty for peo­ple who aren’t work­ing, pay­ments for dis­abil­i­ty, lost income gen­er­a­tion due to pre­ma­ture death and more.

Q3: What are a few top line sta­tis­tics from this 2017 report?

M. Peeples: There are a few par­tic­u­lar­ly stag­ger­ing sta­tis­tics and I’ll get to these but, as a dia­betes educator/clinician I want to high­light the human toll of dia­betes first. We need to remem­ber that these costs occur because mil­lions of peo­ple have or are at risk for dia­betes. They all have fam­i­ly, loved ones and friends that are impact­ed, emo­tion­al­ly and eco­nom­i­cal­ly, by dia­betes. As the ADA states, “Dia­betes impos­es a sub­stan­tial bur­den on soci­ety in the form of high­er med­ical costs, lost pro­duc­tiv­i­ty, pre­ma­ture mor­tal­i­ty and intan­gi­ble costs in the form of reduced qual­i­ty of life.1

Sim­ply stag­ger­ing stats:

  • Total esti­mat­ed costs of dia­betes care in 2017 was $327 bil­lion. Direct costs were $237 bil­lion and indi­rect costs were $90 bil­lion.
  • Com­pared to the 2012 analy­sis, direct costs rose by 26% and the per per­son increase in med­ical costs increased by 14% (with adjust­ment for gen­er­al infla­tion and increased dia­betes preva­lence).
  • One in 11 Amer­i­cans has dia­betes (9.4% of the U.S. pop­u­la­tion) and 84 mil­lion have pre­di­a­betes. In total near­ly 1 in every 2 adults has dia­betes or pre­di­a­betes.2
  • One in every 7 health­care dol­lars (U.S.) is spent on dia­betes care (direct or indi­rect).3
  • Preva­lence of dia­betes in the U.S. increased between 2012 -2015 by 700,000. The pop­u­la­tion is expect­ed to con­tin­ue to rise due to pop­u­la­tion growth and an increase in the aging pop­u­la­tion.
  • The increase in med­ical costs is pre­dom­i­nant­ly in those 65 years and old­er, main­ly Medicare ben­e­fi­cia­ries. This accounts for 61% of all health care expen­di­tures.

The words of William Cefalu, MD, Chief Sci­en­tif­ic, Med­ical and Mis­sion Offi­cer of ADA, must be con­sid­ered: “We must heed the warn­ings of the sci­en­tif­ic evi­dence before us – dia­betes is our nation’s most expen­sive health con­di­tion. We must take action to reduce both the inci­dence and preva­lence of dia­betes, there­by reduc­ing its costs.”3

Q4: Why do you think it remains dif­fi­cult to get health­care providers and deci­sion mak­ers more inter­est­ed and invest­ed in reduc­ing the human toll and eco­nom­ic costs of dia­betes? 

M. Peeples: Real­i­ty is mil­lions of dol­lars are spent on dia­betes from a wide array of sources includ­ing the Fed­er­al gov­ern­ment for research, trans­la­tion of research and care. State and local gov­ern­ments spend dol­lars direct­ly or indi­rect­ly to reduce the inci­dence of dia­betes and impact of this dis­ease. Non-prof­it orga­ni­za­tions raise dol­lars to fur­ther dia­betes research and sup­port peo­ple with dia­betes and care­givers. The list goes on. But, as with many dis­eases, finan­cial resources are rarely suf­fi­cient to cov­er all the desires and demands.

With that said, dia­betes suf­fers, par­tic­u­lar­ly type 2, from NOT being viewed as a seri­ous dis­ease in need of atten­tion and resources. Peo­ple, along with their health­care providers, often don’t feel (lit­er­al­ly and fig­u­ra­tive­ly) the imper­a­tive to aggres­sive­ly care for dia­betes with the same vig­or that peo­ple react to  the diag­no­sis of can­cer or a heart attack.

Yet, research shows that for peo­ple at risk of type 2 dia­betes or diag­nosed with pre­di­a­betes, they can pre­vent or delay type 2 dia­betes by liv­ing a health­i­er lifestyle and los­ing weight and keep­ing it off over time. We also know that for peo­ple with type 2 dia­betes, the ear­li­er and more aggres­sive­ly they treat it, the more they can slow its pro­gres­sion. These actions could col­lec­tive­ly save lives and health­care dol­lars.

Q5: Why should these stag­ger­ing eco­nom­ic costs mat­ter to every Amer­i­can?   

M. Peeples: To answer I’ll point again to words from William Cefalu, “…dia­betes is our nation’s most expen­sive health con­di­tion…”3 These enor­mous costs are on the backs of each and every Amer­i­can in the form of high­er health­care costs, health insur­ance pre­mi­ums, reduced stan­dard of liv­ing and more.

Q6: Are there ways we can refo­cus our efforts on man­age­ment of chron­ic, life­long con­di­tions?

M. Peeples: We’ve got to do more to help Amer­i­cans pre­vent and/or delay chron­ic dis­eases, which often occur togeth­er. For exam­ple, it’s com­mon for a per­son to have obe­si­ty, high blood pres­sure, heart dis­ease and type 2 dia­betes.

A recent FDA announce­ment about a new “Nutri­tion Inno­va­tion Strat­e­gy”, notes that near­ly 70% of U.S. adults are now over­weight or obese and that “poor nutri­tion plays a role in these pat­terns of chron­ic and pre­ventable dis­ease.”4 A goal of FDA’s new strat­e­gy is to reduce pre­ventable death and dis­ease with the use of con­sumer-friend­ly, under­stand­able Nutri­tion Facts labels and health claims on foods, imple­men­ta­tion of the long await­ed restau­rant menu label­ing and reduc­ing the sodi­um count in foods to help reduce high blood pres­sure, which increas­es the risk of strokes and heart attacks.

Q7: From your world of dig­i­tal health and dig­i­tal ther­a­peu­tics, how do you believe these tools can reduce costs pri­or to ADA’s next eco­nom­ic costs analy­sis in 2022?

Inte­grat­ing proven dig­i­tal health tools into the self-care and coor­di­na­tion of care between peo­ple and their health­care providers can assist all involved in myr­i­ad ways. Dig­i­tal health tools can sup­port the dai­ly tasks and prob­lem-solv­ing asso­ci­at­ed with man­ag­ing dia­betes and its co-mor­bidi­ties such as hyper­ten­sion. These tools can track and ana­lyze patient gen­er­at­ed health data (PGHD) to mon­i­tor chron­ic con­di­tions which can then be shared dig­i­tal­ly with their providers for focused con­ver­sa­tions that engage the per­son in their dis­ease self-care and man­age­ment, assist in opti­miz­ing treat­ment over time and deal with and avert­ing poten­tial cost­ly emer­gency sit­u­a­tions.

When these tools are inte­grat­ed into val­ue-based care and pay­ment mod­els they can be both cost- and clin­i­cal­ly-effec­tive. Recent­ly a Har­vard Busi­ness Review arti­cle, “Vir­tu­al Health Care Could Save the U.S. Bil­lions Each Year” con­jec­tured that the pair­ing of vir­tu­al health and dig­i­tal ther­a­peu­tics could “gen­er­ate an eco­nom­ic val­ue of approx­i­mate­ly $10 bil­lion annu­al­ly across the U.S. health sys­tem over the next few years.”5 In my mind that’s worth work­ing on.

Ref­er­ences:

  1. Amer­i­can Dia­betes Asso­ci­a­tion. Eco­nom­ic Costs of Dia­betes in the U.S. in 2017. Dia­betes Care. 2018; https://doi.org/10.2337/dci18-0007 (e-pub ahead of print).
  2. Cen­ters for Dis­ease Con­trol and Pre­ven­tion (CDC). Nation­al Dia­betes Sta­tis­tics Report. https://www.cdc.gov/diabetes/data/statistics/statistics-report.html. (Accessed April 4, 2018).
  3. Cefalu WT: Dia­betes: Our Nation’s Most Expen­sive Health Con­di­tion https://health.usnews.com/health-care/for-better/articles/2018–03-28/diabetes-our-nations-most-expensive-health-condition?utm_source=Closer+Look+Subscribers+2018&utm_campaign=abdaa249f3-2018–03-29_%28HTML_LINKS%29_ADA_cost_of_dia03_29_2018&utm_medium=email&utm_term=0_c55d924bf1-abdaa249f3-409220089 (accessed…)
  4. U.S. Food and Drug Admin­is­tra­tion. FDA Nutri­tion Inno­va­tion Strat­e­gy. https://www.fda.gov/Food/LabelingNutrition/ucm602651.htm. (Accessed April 17, 2018).
  5. Har­vard Busi­ness Review. Vir­tu­al Health Care Could Save the U.S. Bil­lions Each Year. https://hbr.org/2018/04/virtual-health-care-could-save-the-u-s-billions-each-year. (Accessed April 16, 2018.)