How new tech, treatments impact diabetes costs.
According to the Economic Cost of Diabetes study by the American Diabetes Association (ADA), the total estimated cost of diagnosed diabetes in the United States is $245 billion, including $176 billion in direct medical costs and $69 billion in reduced productivity. Individuals with diagnosed diabetes incur an average in medical expenditures of about $13,700 per year, of which about $7,900 is attributed to diabetes. Individuals with diagnosed diabetes, on average, have medical expenditures approximately 2.3 times higher than what expenditures would be in the absence of diabetes.
Given this, Managed Healthcare Executive asked Andrew S. Rhinehart, MD, chief medical officer, Glytec, Greenville, South Carolina, and Jay LaBine, MD, chief medical officer, Priority Health, Grand Rapids, Michigan, how new treatments, technologies and services might help reduce costs and improve the quality of care for diabetes patients.
Managed Healthcare Executive (MHE): How might emerging new treatments for diabetes improve the quality of care while reducing the costs of care?
Rhinehart: Scores of data show that improved glycemic control reduces the overall cost of care for people with diabetes. The cost of prescription medications and diabetes supplies accounts for merely 12% of the $245 billion spent annually. The majority of costs come from treating diabetes related to hospitalizations, complications, and indirect costs (i.e., increased absenteeism and reduced productivity while at work, reduced productivity for those not in the labor force, inability to work as a result of disease-related disability, and lost productive capacity due to early mortality). Preventing these complications, improving patients’ lives, and keeping individuals with diabetes healthier with the use of the newest and best therapies should in turn lower costs.
MHE: How can new technology impact costs and quality for diabetic patients?
LaBine: Smart devices offer many benefits to individuals who are responsible for consistent self monitoring. Utilizing technology such as phone and computer apps that log blood sugar and foods consumed, smart pumps that give insulin as the body needs it, and text and e-mail reminders to test or take medications will make it easier for diabetic patients to control and maintain their disease.
Rhinehart: By using today’s technologies, large amounts of data can be collected. Moving forward, providers need to better capitalize on this large data set by gleaning actionable insights through the use of predictive analytics and decision support software to assist with medication dosing.
MHE: What services should health plans offer that will help patients stick to treatment plans and adhere to lifestyle modifications?
Rhinehart: Many payers finally are understanding that paying for medications and provider office visits is not enough for patients with diabetes. To improve care, payers need to provide additional coverage for diabetes self-management education and support through a recognized diabetes education center, such as the American Association of Diabetes Educators or the ADA. Without proper education and support, patients are less likely to manage their own care outside of the hospital. Organizing patient incentive programs that motivate them to comply with therapy is another method that payers can use to help patients better manage their disease. These can be financial incentives (e.g., no copays for medications and testing supplies in addition to lower or no office visit copays) or support incentives through disease management provided either directly from the provider, payer, or from a third party, such as pharmacists providing medication therapy management
MHE: What else should healthcare executives know about diabetes care from a financial perspective?
Rhinehart: The most important thing to understand regarding diabetes is that early action is key. Although treatments, education, technologies, and support are expensive, study after study demonstrates that better glucose control improves outcomes and is cost effective. The cost of poor control increases logarithmically over time due to hospitalizations, complications, the need for more medications to treat these complications, morbidity, disability, decreased productivity, and the list goes on. It’s simple — diagnose early, educate, and treat aggressively to achieve proper glycemic control and reap the rewards.
LaBine: If can we can create programs that remove barriers, and align support at home and at work — we may be able to mitigate the long-term costs associated with diabetes.