Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid


Per Capita Diabetes Spending Soars to $10,000 per Person

By Jacqueline DiChiara

- Diabetes is expensive. The disease is costing the healthcare industry billions of dollars. In 2012, an estimated $245 billion was spent on medical costs and productivity loss because of diabetes, confirms data collected between 2010 and 2013 from a report by Patrick Shakiba, BA, Research Assistant, and Amanda Frost, PhD, MA, Senior Researcher of the Health Care Cost Institute (HCCI).

Healthcare Costs

The effects of this substantial sticker shock are trickling down to an individual beneficiary’s wallet. Diabetics are increasingly sharing a greater percentage of cost burden, claim Shakiba and Frost.  

“The number of people with diabetes continues to grow, as does the health care spending for these individuals,” states David Newman, HCCI Executive Director. 

Reported numbers depict a noted disparity between healthcare costs associated with diabetics as opposed to those without diabetes. Those individuals with diabetes spent 2.5 times more out-of-pocket for healthcare costs in 2013 compared to those without diabetes – $1,922 compared to $738, state Shakiba and Frost. These costs have increased annually by 4 to 5 percent since 2011.

The difference in per capita spending between diabetics and non-diabetics averages out to over $10,000 per person. In a similar uprising of costs, the amount of per capita spending for diabetic pre-Medicare adults was reported as nearly $17,000.

As the prevalence of diabetes increases, so do the associated medical costs. Some reported facts to consider are as follows:

  • In 2012, the estimated direct medical costs of diabetes was $176 billion.
  • Between 2011 and 2013, diabetic children had the most expedient per capita spending growth compared with other age groups.
  • A $1,361 increase between 2012 and 2013 was the largest dollar increase spent per capita during that period. In contrast, middle aged adults diagnosed with diabetes had the lowest per capita spending, although their spending growth rates were the fastest.
  • In 2013, over $10,000 per person was spent on healthcare for individuals with diabetes compared to those without diabetes.

These noted stark price differences might have resulted because insulin, especially branded insulin, is more expensive for children and young adults compared with other age groups, confirm Shakiba and Frost. Newer versions of insulin are often double or triple that of traditional synthetic insulin. Therefore, there is a dire need for additional research on healthcare spending trends for those with diabetes to strengthen the financial backbone of the healthcare industry, the researchers maintain.

“We’re seeing spending on anti-diabetic medication and insulin specifically and branded versions of those products go up,” says Frost in a recent Forbes interview. “We looked at 2009 to 2013 spending, but it was really 2011, 2012 and 2013 that spending increased for drugs.”

Such recent increases within the past three years require further addressing within the industry, as diabetes is noted as the seventh leading cause of death nationwide. Within the past three decades, the number of diagnosed diabetes cases has increased from 5 million to 21 million, say Shakiba and Frost.

"Moving forward, it will be important to continue to analyze these spending trends to see what else we can learn about how the way we manage diabetes contributes to its costs," confirms Frost.

Two years prior to the aforementioned financial findings, a report from the American Diabetes Association confirmed the costs associated with instances of diagnosed diabetes had increased by 41 percent within five years. The total annual cost at this time was reported at $245 billion.

Additionally, a second report from The American Diabetes Association last year previously confirmed findings echoing similar results. Such research claimed prediabetes in 2012 cost healthcare $44 billion with undiagnosed diabetes costing healthcare $33 billion. $78 billion in lost work productivity was associated with physician and hospital visits, prescription drug costs, and a variety of associated health conditions, such as hypertension.

Although the economic burden associated with the vastly large cost and implications of caring for those with diabetes is ostensibly massive, perhaps greater efforts of improving quality care can foster healthier beneficiaries and a financially advantageous healthcare system.

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