Andrew J. Palmer, MD: Allocating Resources Effectively for Patients in the United States and Around the World

Dr Andrew J. Palmer describes the costs of type 2 diabetes (T2DM) in the United States and worldwide. He also explains the importance of choosing treatments that are cost-effective and cost-saving for patients.
Published Online: June 22, 2013
In 2011, the cost of diagnosis and treatment of type 2 diabetes (T2DM) worldwide was estimated to be $465 billion, accounting for 11% of expenditures for people between the ages of 25 and 59. Medical costs associated with diabetes in the US exceeded $245 billion in 2012 alone, and by 2030, it is projected that the annual costs of diabetes will exceed $500 billion. Most of the expenditures tied to diabetes stems from complications of the disease, but the cost of hospital inpatient care accounts for nearly half (43%) and medications, 10%.
Prediabetes also incurs considerable costs to society, as it affects approximately 79 million Americans. The average annual cost per person with prediabetes in the US is approximately $2000, but the development of T2DM results in an average increase to $2500 per person per year. A 2009 publication found that the cost of illnesses associated with prediabetes exceeded $25 billion, and another study showed that the average cost of treatment for patients with prediabetes increased to about $3000 per year within 3 years of developing prediabetes. Costs of treatments for associated conditions rise rapidly at an average rate of 30% per person per year, and Palmer noted that when microvascular complications, such as diabetic retinopathy, arise, there is a 2- to 4-fold increase in costs, and macrovascular complications, such as arterial damage, can increase costs by a factor of 4.
Indirect costs of diabetes are often overlooked, but represent a massive component to the financial burden of T2DM, and when the effects of lost productivity at work and absenteeism are added into the equation, there is an average annual loss of $3813 per patient. In the US, annual indirect costs attributed to diabetes amount to $68.6 billion, with 1/5 of this cost resulting from reduced performance at work, including absence and reduced productivity while at work due to illness. Furthermore, 31% of indirect costs resulted from reduced labor force participation due to disability. Stratified by age range, the annual productivity loss per male in the US shows that indirect costs were highest among patients with T2DM in early adulthood (35 to 45 years of age). Those between the ages of 45 and 55 experienced a similar, but slightly smaller, loss in productivity. Early death is also a facet that must be factored into total indirect costs attributed to T2DM as it leads to a loss of national productivity that accounts for another 27% of indirect costs.
The appropriate management of diabetes includes more than just glycemic control. The management of high blood lipids and blood pressure are also important components to successful therapy. Screening patients for comorbidities, such as micro- and macrovascular complications, and encouraging lifestyle changes illustrate the multidisciplinary challenges of diabetes management.
While there are many screening activities and treatments that demonstrate clinical benefit in patients with diabetes, not all treatments are equally effective, nor are they equally cost-effective. Palmer emphasized that, “Cost effectiveness does not mean cost savings. Cost effectiveness means that there is an increase in costs, but the treatment is worth the cost.” In fact, several therapies exceed the designation of cost-effectiveness and actually save more costs overall, such as angiotensin converting enzyme inhibitors (ACEIs) and angiotensin receptor blockers (ARBs) for nephropathy, treatment with metformin in patients who are overweight or obese, and aggressive lifestyle modifications for patients with prediabetes.
Between 2002 and 2004, investigators carried out a study that analyzed the cost-effectiveness of bariatric surgery for 2234 US adults with T2DM who were covered by commercial insurances, and found that the cost surgery approached $30,000 per patient. In the first year, health care costs increased by about $600 per patient who had undergone bariatric surgery, but those costs decreased significantly by the second year, resulting in a cost-savings of $2139, and $4498 by year 3. However, Palmer cautioned, “We are unsure of the long-term effect of the impact on quality of life, length of life, and long-term costs.”
The management of diabetes remains a challenge for health care professionals and policy makers. The appropriate allocation of our limited resources to the most effective therapies for the right patient populations remains a substantial challenge amidst the growing prevalence of diabetes and its increasing costs, but effective distribution of these resources will help to drive optimal outcomes for these patients.

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