Financial Wellness

Healthcare Costs and Diabetes- Guidance for Employers

Diabetes is a disease caused by elevated blood sugar with medical complications, which are costly and devastating. According to the Centers for Disease Control and Prevention (CDC), the number of diabetics in the United States has grown to nearly 26 million, a 10 percent increase in the past 2 years.

What is more alarming is that, according to the CDC, over 79 million adults in the U.S. are classified as pre-diabetic, a precursor of diabetes. This is a 33 percent increase in the past 2 years. According to the CDC, it is predicted that 25 to 33 percent of the U.S. adult population will have diabetes in 2050. These increasing costs may end up costing employers in the ling run. (1,2,3)

So why are so many Americans developing pre-diabetes and diabetes?

The prevalence of diabetes is directly related to increased weight and age. With the epidemic of obesity, currently two-thirds of the U.S. population is either overweight or obese. In addition, the average age of the U.S. population is steadily getting higher secondary to people living longer and the baby boom generation now all above the age of 50.

How will this impact employers?

Well, it turns out that the cost of health care for people with diabetes is 230 percent more expensive than for people without diabetes according to the American Diabetes Association.(4) This statistic has been confirmed by a recent report from United Healthcare, which compiled data from 10 million members and found that the average annual health care costs in 2009 for a person with known diabetes were about $11,700 compared with about $4,400 for the non-diabetic public - 260 percent more expensive.

In fact, by the end of this decade it is estimated that medical care for pre-diabetes and diabetes will account for ten percent of the total healthcare spend in the U.S. Employers will bare a significant portion of this financial burden.

Why is care for diabetes so expensive?

To start, the actual medical care required to treat diabetes is costly. Furthermore, the complications of diabetes are very serious and enormously expensive to treat. These conditions include heart disease, kidney disease, eye disease, nerve disease, and many other conditions.

So what can employers do to address this issue?

The solution for this issue requires a three-pronged approach - screening, prevention, and disease management. The necessary tools are currently available for employers to tackle all three. Let's take a closer look at what these initiatives are and why all three are necessary.

Screening :

  • Almost 30 percent of persons with diabetes are not aware they have it.(5) Therefore, screening for diabetes is critical to diagnose the large population of persons who are undiagnosed. Furthermore, screening also identifies the much larger population of persons with pre-diabetes, a precursor of diabetes.
  • Employers can screen their entire employee population for diabetes easily and inexpensively with a simple blood finger stick.


  • Modest weight loss achieved by lifestyle coaching can prevent persons with pre-diabetes from every developing diabetes. In fact, a large, nationally recognized study published in the prestigious New England Journal of Medicine demonstrated that achieving a modest 7% weight loss goal resulted in a 58 percent% reduction in the incidence of diabetes in a high-risk population that had pre-diabetes.(6)
  • Employees with pre-diabetes must be encouraged to enroll in diabetes prevention program with a focus on proper nutrition and exercise.

Disease Management:

  • By all measures, diabetes is sub-optimally managed by physicians in the United States. Poorly controlled blood sugar and lack of routine maintenance care leads to an accelerated risk of complications and increased healthcare costs. Several key diabetes studies have demonstrated that proper disease management intervention not only significantly improves HEDIS scores but also reduces healthcare claims for those patients enrolled in the program.
  • Employers' investments in diabetes disease management programs show promise in delivering both short term and long-term health and financial benefits.

In summary, diabetes is an epidemic that will significantly impact the cost of healthcare for employers in the near future. There exists well thought out strategies for addressing this issue that demonstrate a clear return on investment.


1. Narayan KM, Boyle JP, Geiss LS, Saaddine JB, Thompson TJ: Impact of recent increase in incidence on future diabetes burden U.S., 2005-2050. Diabetes Care 2006, 29(9):2114-2116.

2. Magliano DJ, Shaw JE, Shortreed SM, Nusselder WJ, Liew D, Barr ELM, Zimmet PZ, Peeters A: Lifetime risk and projected population prevalence of diabetes. Diabetologia 2008, 51(12):2179-2186.

3. U.S. Census Bureau. National Population Projections Released 2008 (Based on Census 2000).

4. American Diabetes Association: Economic costs of diabetes in the U.S. in 2007. Diabetes Care 2008, 32:596-615.

5. 2005-2008 National Health and Nutrition Examination Survey.

6. Diabetes Prevention Program Research Group N England Journal of Medicine 2002; 346:393-403 February 7, 2002.

About the Author

Jonathan Spero, MD, is CEO of InHouse Physicians and board certified in Internal Medicine. Dr. Spero is an expert in the field of targeted employee wellness programs with measureable ROIs. InHouse Physicians is a global employee health and wellness provider delivering innovative cost containment solutions to corporations around the world.

InHouse Physicians high touch employee health services include a wide range of offerings such as cost effective worksite health centers, evidence based "pre- disease" wellness initiatives, health screenings plus analytics, flu vaccinations, and travel medicine.

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