Diabetes and employers

Diabetes has been identified as the 3rd 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

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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 moderate employer's costs

A recent study conducted by the HealthPartners HMO found that members with higher Hemoglobin A1c blood levels had higher medical costs over a 3-year period. Expenses were significantly higher for each percentage point increase above a Hemoglobin A1c of 7% (Gilmer et al., 1997).

Levels of Hemoglobin A1c* (%) Being Compared

Greater Per-Person Treatment Cost Associated with a 1 Percentage Point Higher Hemoglobin A1C Value

10% with 9% $1,200 - $4,100
9% with 8% $900 - $3,100
8% with 7% $600 - 2,200
7% with 6% $400 - $1,500

Based upon those assumptions, an aggregate decrease in HbA1c would mean direct medical cost avoidance over a 3-year period of between $1,500 and $5,300 per employee.

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References:

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.
Goetzel RZ, Hawkins K, Ozminkowski RJ, Wang S. The Health and Productivity Cost Burden of the "Top 10" Physical and Mental Health Conditions Affecting Six Large U.S. Employers in 1999. Journal of Occupational and Environmental Medicine 45(1): 5-14, January 2003.
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.
ADA Website "Diabetes Facts" Http://www.diabetes.org/main/info/facts/facts_natl.jsp. Accessed 2/14/03.
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.
American Diabetes Association Special Report. Economic Costs of Diabetes in the U.S. in 2002. Diabetes Care 26(3): 917-932, March 2003.