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Diabetes is Very Costly – Especially for Employers

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According to a recently published study from the American Diabetes Association (ADA), the total cost of diabetes to the nation increased by 41% in just five years rising from $174 billion in 2007 to $245 billion in 2012.1 The Association attributes the rapid rise in total costs to the relentless increases in the number of people with diabetes, rather than to rising medical costs for treating the disease.2 Of that $245 billion:

  • $176 billion was for direct medical costs.
  • Approximately $69 billion was for decreased productivity.1

Direct Medical Expenditures Hit Employers Hard

According to the ADA study:

  • In 2012, average medical expenditures for people with diabetes were about $13,700, with $7,900 of that total directly attributed to their diabetes.1
  • People with diagnosed diabetes have medical expenditures that are approximately 2.3 times higher than they would be in the absence of diabetes.1
  • Care for people with diagnosed diabetes accounts for more than 1 in 5 health care dollars in the U.S., with more than half of that expenditure directly attributable to diabetes.1

One large insurer reported in 2009 that its studies showed the following annual health care costs for people with prediabetes and diabetes:

  • $5,000 for a member with prediabetes
  • $12,000 for those with previously undiagnosed diabetes
  • $10,000 for those with diabetes who did not have complications
  • $30,000 for those with diabetes with complications3

Diabetes Mean Decreased Productivity

In 2012, U.S. employers bore the brunt of the approximately $69 billion for decreased productivity due to diabetes:

  • $5 billion for missed workdays
  • $20.8 billion for “presenteeism,” or reduced performance on the job
  • $21.6 billion for inability to work as a result of diabetes
  • $18.5 billion for lost productive capacity due to early mortality
  • $2.7 billion for reduced productivity for those not in the labor force1

The High Cost of Diabetes

According to the American Diabetes Association (ADA), 86 million Americans have prediabetes and are at risk for developing type 2 diabetes, and the at-risk number has been steadily rising.

Using Kaiser Family Foundation data, the ADA’s Facts About Diabetes estimates that for a typical company with 1,000 employees:

  • 20 employees have diabetes.
  • 4 of them are undiagnosed.
  • 70 have prediabetes.
  • $724,506 will be the annual increased cost if 25% of those employees with prediabetes develop diabetes.

For obese individuals, losing just 7 percent of their body weight (which translates to 15 pounds if they weight 200 pounds) and exercising moderately (including brisk walking) five days a week can reduce their risk for type 2 diabetes by 58 percent, according to the ADA.

References

  1. American Diabetes Association. Scientific Statement. Economic costs of diabetes in the United States in 2012. Diabetes Care. 2013; DOI: 10.2337/dc12-2625.
  2. American Diabetes Association. News release. American Diabetes Association releases new research estimating annual cost of diabetes at $245 billion.
    http://www.diabetes.org/for-media/2013/annual-costs-of-diabetes-2013.html. Published March 6, 2013. Accessed on June 4, 2013.
  3. UnitedHealthCare. Fact sheet January 2009. http://www.uhc.com/live/uhc_com/Assets/Documents/DiabetesHealthPlan.pdf. Published January 2009.
    Accessed on June 4, 2013

Burden of Diabetes in Louisiana

Click on the image below to enlarge, or read more on the American Diabetes Association website.adv-cost-of-diabetes

Click on the image below to enlarge, or read more on the Health Care Cost Institute website.health-care-needs-diabetesHigh Cost of Diabetes: 2013