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HomeHealthcareDiabetic CareThe True Costs of Diabetes

The True Costs of Diabetes

By Carl Marshbanks, C.E.O, XtremedX LLC

Living with a chronic disease like diabetes isn’t just physically and mentally taxing. it also very expensive. The costs of diabetes present large financial problems to patients and their families, and to health systems, insurers, and the entire community.


# Americans with Diabetes/Pre-Diabetes – 110 million

Total Annual Costs – $327 billion

According to the CDC (Centers for Disease Control and Prevention):

If current trends continue, 1 in 3 Americans will develop diabetes sometime in their lifetime.

Diabetes in the United States

  • More than 34 million people of all ages (about 1 in 10) have diabetes, and 88 million adults (1 in 3) have prediabetes (110 million total).
  • Diabetes complications are increasing for young adults aged 18 to 44 and middle-aged adults aged 45 to 64.
  • Diabetes is more common among Asian, non-Hispanic Black, and Hispanic people than non-Hispanic White people.
  • Nearly 1 in 5 adolescents aged 12 to 18 years and 1 in 4 young adults aged 19 to 34 have prediabetes.

According to the ADA (American Diabetes Association):

The economic cost of diabetes has increased by 26 percent in the last five years. People with diagnosed diabetes incur average medical expenditures of $16,752 per year. More than half of that amount ($9,600) is directly related to diabetes. On average, people with diagnosed diabetes have medical expenditures approximately 2.3 times higher than what expenditures would be in the absence of diabetes.

The High Cost of Diabetes

Diabetes is the most expensive chronic condition in our nation.

  • $1 out of every $4 in US health care costs is spent on caring for people with diabetes.
  • $237 billion is spent each year on direct medical costs and another $90 billion on reduced productivity ($327 billion total).
  • The total economic cost of diabetes rose 60% from 2007 to 2017.
  • 61% of diabetes costs are for people 65 years or older, which is mainly paid by Medicare.
  • 48% to 64% of lifetime medical costs for a person with diabetes are for complications related to diabetes, such as heart disease and stroke.

Premise Health has recently reported that Employers indirectly take on a major part of this medical cost burden. Lost income due to missed workdays and reduced productivity create a costly snowball effect.

According to another study by the ADA, the $90 billion cost of reduced productivity can be broken down by the following:

  • $3.3 billion: Increased absenteeism.
  • $26.9 billion: Reduced productivity while at work for the employed population.
  • $2.3 billion: Reduced productivity for those not in the labor force.
  • $37.5 billion: Inability to work as a result of disease-related disability.
  • $19.9 billion: Lost productive capacity due to early mortality.

U.S. spending on diabetes-related medications increased from $43.9 billion to $51.5 billion from 2015 to 2016. One in 7 healthcare dollars is spent treating the condition and associated complications.

A recent report from the American Diabetes Association found the largest components of medical expenditures are:

  • Hospital inpatient care (30% of the total medical cost) ($98.1 billion)

*Every 1.2 seconds, someone is diagnosed with a foot ulceration.

*Costs the year following a foot ulceration – $44,200.

*# Lower extremity amputations per year – 130,000 (230 per day).

*Avg In-patient costs for amputation – $100,000.

*According to Johns Hopkins University, the lifetime cost of an amputation is over $500,000.

  • Prescription medications to treat complications of diabetes (30%) ($98.1 billion).
  • Anti-diabetic agents and diabetes supplies (15%) ($49.1 billion).
  • Physician office visits (13%) ($42.5 billion).
  • Miscellaneous / Care-Giver Assistance (12%) ($39.2 billion)

Among states, California has the largest population with diabetes and thus the highest costs, at $39.47 billion. Texas ($25.60 billion), Florida ($24.80 billion), and New York ($21.23 billion) round out the top four states in terms of total annual cost.

This costs breakdown highlights the tremendous burden that diabetes imposes on society. Additional areas of concern include intangibles from pain and suffering, care provided by non-paid caregivers, and the multiple health burdens associated with undiagnosed diabetes.

Other factors to consider include the high diabetic-related associations with retinopathy, obesity, arthritis, and other medically chronic conditions.

Increases in medical spending associated with type 2 diabetes begin well in advance of a diagnosis. But once a diagnosis is made, those expenses rise drastically. This means it is important for physicians to identify people with prediabetes early while supporting preventive efforts such as a CDC/ADA-recognized lifestyle change program.

Carl Marshbanks, M.B.A.

Carl Marshbanks is the C.E.O. for XtremedX LLC., a Medical Device Company located in Greenville, SC. XtremedX is developing a new device to early detect Diabetic Foot Ulcerations (DFU). XtremedX focuses on developing products that will improve the quality of patient’s lives, and greatly reduce overall healthcare costs.

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