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Calculate What Diabetes Costs Your Business

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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 2017, the average medical expenditure for people with diagnosed diabetes is about $16,750 per year, of which about $9,600 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 2017 was $327 billion. The breakdown of this cost includes:

Direct medical costs:

$237 billion (57% of the total medical costs incurred by people with diabetes), including,

  • Hospital inpatient care ($69.7 billion).
  • Prescription medications to treat the complications of diabetes ($71.2 billion).
  • Antidiabetic agents and diabetes supplies ($34.6 billion).
  • Physician office visits ($30.0 billion).
  • Nursing/residential facility stays ($6.4 billion).

Indirect costs:

$90 billion, including,

  • Increased absenteeism ($3.3 billion).
  • Reduced productivity while at work ($26.9 billion) for the employed population.
  • Reduced productivity for those not employed ($2.3 billion).
  • Inability to work as a result of disease related disability ($37.5 billion).
  • Lost productive capacity due to early mortality ($19.9 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.

Aids & Tools

Know More

  1. Learn more about worksite wellness programs from the American College of Occupational and Environmental Medicine.
  2. The Centers for Disease Control also has resources within the Total Worker Health Initiative.
  3. CDC’s Workplace Health Promotion also provides additional resources.

Ask More

  1. The diabetes costs for our business are very high. My boss would like to avoid hiring people with diabetes. Isn’t this discrimination?
    Answer:
  2. Yes, this is discrimination.  The EEOC provides information about diabetes and the workplace and how to avoid discrimination.
  3. How can we bring the costs of diabetes down?
    Answer:
    Studies have shown that provision of diabetes prevention and diabetes management information and education will improve diabetes management and may reduce diabetes costs.
  4. Beyond healthcare people with diabetes seem to take a lot of time off due to illness, appointments and for things like checking blood sugars. How can we reduce these more hidden costs?
    Answer:
    A person with diabetes who has strong self-management skills can manage their diabetes very successfully and is less likely to become ill. 

Do More

  1. Determine how much diabetes costs your business.  Use the American College of Occupational and Environmental Medicine Blueprint for Health.
  2. Talk with employees about how managing diabetes can help them reduce sick days and be more productive at home and on the job. Consider using the Diabetes at Work lesson plan Managing Blood Sugar.

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