Calculate What Diabetes Costs Your Business

Overall cost of the population of people with diabetes

According to the American Diabetes Association's Economic Costs of Diabetes in the U.S. in 2012, the average medical expenditure for people with diagnosed diabetes is about $13,700 per year, of which about $7,900 is due to diabetes. The medical expenditures of people with diabetes are approximately 2.3 times higher than expected costs if they did not have diabetes. 

The total estimated cost of diagnosed diabetes in 2012 was $245 billion. The breakdown of this cost includes:

• $176 billion in direct medical costs, which included hospital inpatient care (43% of the total medical cost).
• Prescription medications to treat the complications of diabetes (18%).
• Antidiabetic agents and diabetes supplies (12%).
• Physician office visits (9%).
• Nursing/residential facility stays (8%).

Indirect costs include:

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

Individual lifetime medical costs

A study published in the American Journal of Preventative Medicine entitled, Lifetime Direct Medical Costs of Treating Type 2 Diabetes and Diabetic Complications,  showed the lifetime direct medical costs of treating type 2 diabetes and its complications in the working population (aged 25-64)  ranged from $124,700 for men in the youngest group (aged  25-44 years)  to $84,000 in men aged 55-64. The lifetime costs in women costs ranged from $130,800 in age group 25-44 to $85,200 in the age group 55-64. Fifty-three percent of the age–gender weighted average of the lifetime medical was due to treating diabetic complications. The authors concluded that effective interventions that prevent or delay type 2 diabetes and diabetic complications might result in substantial long-term savings in healthcare costs. In addition, out of pockets expenses also are a burden for almost 25% of people with diabetes according to the article in Diabetes Care entitled, Changes Over Time in High Out-of-Pocket Health Care Burden in U.S. Adults with Diabetes. 

A variety of tools are available to help you measure the cost of diabetes for your company. Many of the tools can be customized to reflect your company’s size and employee demographic profile. Knowing the cost of diabetes and related conditions to your business can help you make the business case to management for wellness services, determine where and how to spend your benefits and wellness dollars, serve as a benchmark for measuring the success of your interventions and can build the case for health and productivity management (HPM).

Three kinds of health related databases are most helpful to build the case for HPM:

• Data on direct costs of medical treatment (e.g. inpatient, outpatient, pharmaceutical).
• Data on lost time or absence (e.g., absenteeism, short term disability, worker compensation).
• Data on lost performance at work or “presenteeism” (i.e., person is at work but not working at 100% of capacity) as part of a health risk appraisal questionnaire.

Information comes from:

• Medical claims and pharmacy claims.
• Short-term disability, worker compensation and incidental sick days.
• Self-completed employee health risk appraisal questionnaire (HRAs).

1. American Diabetes Association, Economic Costs of Diabetes in the U.s. in 2013. Diabetes Care 2013; 36:1033-1046, 2013.
2. Zhuo X, Zhang p, Hoerger T. American Journal of Preventative Medicine; 2013;45(3):253-261.
3. Li R, Barker L, Shrestha S, Zhang P, Duru K, Pearson-Clarke T, Gregg E.,  Changes Over Time in High Out-of-Pocket Health-Care Burden in U.S. Adults With Diabetes, 2001-2011. Diabetes Care; 2014;37(6):1629-1635.