Diabetes is a chronic and currently incurable condition in which the body is unable to regulate blood sugar levels. Under normal circumstances, the hormone insulin, which is made by the pancreas, controls how much sugar (or glucose) is in the blood. In diabetics, the body cannot use the glucose properly, either because of a lack of insulin (Type 1 diabetes) or because the available insulin is not effective (Type 2 diabetes). The long-term complications of damage to the eyes, kidney or nerves are related to hyperglycemia (high blood sugar levels) and occur from the second decade onwards after diagnosis. There are currently 150 Million people worldwide suffering from diabetes.

The World Health Organization forecasts a doubling of the number of cases of diabetes by 2025, meaning that the number of people diagnosed with this disease grows at a rate close to 3 % per year. (The worldwide diabetic population in 1985 was reported to be only 30 million). According to International Diabetic Federation developing countries will experience a dramatic increase of 170% rise by 2025 and the highest rate of increase is expected to occur in India (+195%).

Estimated total direct healthcare costs of diabetes in selected European countries (Year 2000)

A similar study performed by the American Diabetes Association for the US in 2002 where12 Million people or 4 % of the population suffer from diabetes, indicates healthcare general expenditure per citizen of $ 2,560 and costs for diabetic patients to be roughly 2.4 times higher when taking into account lost workdays as well (age-adjusted annual per capita expenditure of $5,642).

In the US, 18.7 % of people over 65 have diabetes. It is second to hypertension as condition for which the greatest number of people consult a physician (15 million visits).

A interesting excerpt indicates the extent of the epidemic: ” Although people with diagnosed diabetes comprise only slightly more than 4% of the U.S. population, of the components of the health care system included in this study, almost $1 of every $5 spent on health care in the U.S. is for a person with diabetes.”

Diabetes and employers

According to reports provided by Aurora Health Care, a Wisconsin-based not-for-profit health care provider, diabetes has been identified as the third most costly physical health condition for employers.

Direct medical, disability and absenteeism costs determined for a pool of 375,000 employees from 6 large corporations revealed:

• Annual diabetes-related costs totaled $104 per employee, even though only 4.8% actually had diabetes
• Each employee with diabetes cost an average of $21,000 a year

The costs of diabetes can be managed

• A Pennsylvania HMO achieved savings of $1,294 in claims paid annually for diabetes patients who were enrolled in a disease management program (Sidorov J et. al. 2002 )
• A Washington state HMO achieved annual direct cost savings of between $685 - $950 per diabetes patient beginning in year 2 in a population that initially had poor glucose control (Wagner EH et. al. 2001 )
• HealthPartners HMO (Minneapolis) did a 4-year study that concluded "lower baseline levels of HbA1c were associated with significantly lower subsequent charges for care, and……higher levels of HbA1c were associated with significantly higher subsequent charges for care" (Gilmer T et.al. 1997 )
• A randomized, controlled, double-blind study of 1,000 diabetics yielded statistically significant positive differences in the actively managed group after only 12 weeks (Testa MA et.al. 1998 ) for:
• Quality of life
• Productive capacity
• Absenteeism
• Bed-restricted days

Diabetes care management can significantly reduce an employer's costs. A good example of this is illustrated in the case study, “Disease Management with a Focus” (see Appendix “A” for full report – see page 13 of this report for summary of all findings) which reports on a major managed health care program that was piloted at J.B. Hunt Transport Services for 12 months is 2000 and 2001 reduced the program costs for diabetes by 17%, which amounted to a savings of $1,474 per participant.

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Sidorov J, Shull R, Tomcavage J, Girolami, S, Lawton N, Harris R. Does Diabetes Disease Management Save Money and Improve Outcomes? Diabetes Care 25(4): 684-689, April 2002.

Wagner EH, Sandhu N, Newton KM, McCulloch DK, Ramsey SD, Grothaus LC. Effect of Improved Glycemic Control on Health Care Costs and Utilization. JAMA 285(2): 182-189, January 2001.

Gilmer TP, O’Connor PJ, Manning WG. Rush WA. The cost to health plans of poor glycemic control. Diabetes Care 20:1847-1853, 1997.

Testa MA, Simonson DC. Health economic benefits and quality of life during improved glycemic control in patients with type 2 diabetes melitus: a randomized, controlled, double-blind trial. JAMA 280:1490-1496, 1998.