Complete Nurse's Guide to Diabetes Care, 3rd Edition

Chapter 21:

Economic Costs of Diabetes

Geralyn Spollett, MSN, C-ANP, CDE,1 and Christina Stark, FNP-C2

1Spollett is an adult nurse practitioner at Yale Diabetes Center, New Haven, CT. 2Stark is a family nurse practitioner at Beacon Internal Medicine, Portsmouth, NH.

Diabetes is a costly disease. The expenditure of health-care dollars, the reduction in productivity with an increase in disability, and other indirect expenses are estimated to be five times greater among people with diabetes than health-related expenses among the general population. According to a 2013 American Diabetes Association (the Association) statement, direct and indirect expenditures attributable to diagnosed diabetes in the U.S. were estimated at $245 billion in 2012.1 Although this is a conservative estimate that does not reflect many of the associated costs of diabetes care, it does represent a significant increase of nearly 41% over the $174 billion cost in 2007.1 This increase in cost is driven not by increased per-patient spending, but rather by increased prevalence of patients with diabetes.2 Data regarding the cost of diabetes care can also be found on the Association’s website ( International Diabetes Federation (IDF) data indicate that the U.S. has the highest rates of diabetes-related expenditures worldwide.3

Diabetes is the seventh leading cause of death by disease in the U.S. According to the IDF, in 2015, there were 29.3 million adults age 20–79 years old in the U.S. living with diabetes, or 12.8% of the total U.S. population. They estimate that 28% of these people, roughly 8.3 million, are yet to be diagnosed, and they project that this number will increase by more than 16% to 35.1 million by 2040.3 A study conducted in 2006 projected that the prevalence of diagnosed diabetes would more than double to include 12% of the population by 2050.4 According to these IDF figures, this prediction already had been surpassed in 2015, indicating that rates of diabetes prevalence are increasing more rapidly than previously estimated. The cost of care for this increased population will place a significant burden on the health-care budget.

Lost productivity, based on lost workdays, restricted activity days, prevalence of permanent disability, and mortality attributable to diabetes cost the U.S. economy an estimated $58 billion in 2007.5 By 2012, this cost had grown to $69 billion.1 These figures may be underestimated, however. Men and women with diabetes are less likely to be in the labor force than those without diabetes because a higher proportion of individuals with diabetes have disabilities, such as vision loss, kidney failure, and amputations, that prohibit full-time or part-time employment. For example, the Centers for Disease Control and Prevention (CDC) report that ~65,700 nontraumatic lower-limb amputations are performed each year in people with diabetes.

Currently, the age-group with the largest incidence of diabetes is made up of individuals >55 years old. The prevalence of diabetes continues to increase with age. The number of individuals ≥65 years with diabetes currently is estimated to be ~8.8 million.1 This population represents a high proportion of diabetes-associated costs; 65% of inpatient, home health, hospice, and nursing or residential care, and 60% of diabetes-related prescription medication costs are incurred by those ≥65 years. This age-group also has the highest premature mortality rates and has higher incidences of diabetes-associated complications. Nearly 70% of patients with diabetes who are covered by government insurance, the majority by Medicare, are ≥65 years.1

Certain ethnic and racial minority groups are disproportionately affected by diabetes, and the growth rates of disease within these groups continue to rise. This includes their children, who have an increasing incidence of type 2 diabetes (T2D). A U.S. citizen born in the year 2000 is predicted to have a 40% lifetime risk of developing diabetes. This rate is even higher for Hispanic men and women and non-Hispanic black women.6 This estimate has major implications for our nation’s workforce; the increasing number of individuals with diabetes will affect productivity and further increase the indirect costs attributable to diabetes. The economic burden of diabetes will only become greater over time; the Association reported that in 2012, the number of individuals newly diagnosed with diabetes was estimated at 1.7 million cases per year.1

The number of people with diabetes continues to grow in epidemic proportions as the rate of obesity, a factor in the development of T2D, rises. The U.S. ranks third in number of adults with diabetes, behind China and India.3Worldwide ~1.9 billion people are overweight or obese, and most of the world’s population lives in countries where more people die of overweight and obesity than underweight.7 In the U.S., 68.5% of adults are overweight, and more than one-third (34.9%) are obese.

In breaking down the total cost of $245 billion reported in 2012, $176 billion were direct costs that went to excess medical expenditures for diabetes, and the remaining $69 billion was attributed to the loss of productivity. The largest expenditure categories included nearly $76 billion on hospital inpatient care (43% of total), $31 billion in prescription medications to treat the complications of diabetes (18% of total), and $20 billion in antidiabetic agents and diabetes supplies (12% of total) (see Table 21.1).1

Table 21.1—Health-Care Expenditures Attributed to Diabetes in 2012


Cost (in millions)

Hospital inpatient days


Nursing home days




Physician office care


Emergency department


Ambulance services


Hospital outpatient


Home health






Diabetic supplies


Other antidiabetic agents


Prescription medications


Other equipment and supplies (includes eyewear, hearing devices, orthopedic items, etc.)


Total costs



Use of health-care resources is higher among individuals with diabetes than in the general population. People with diabetes are at greater risk for a host of medical complications that are directly or indirectly related to diabetes. Various neurological, cardiovascular, peripheral, vascular, renal, endocrine, and ophthalmic diseases can be associated with diabetes, and underlying diabetes may worsen their presentation or progression. The number of inpatient stays, nursing home occupancies, and home health-care visits are all higher in the population with diabetes. It is also estimated that inpatient days and outpatient visits for treatment of diabetes and its comorbidities tend to be more expensive than those for other disease states. The complexities of caring for individuals with multiple illnesses, complications, and medications that require frequent and periodic monitoring, observation, and follow-up make diabetes a costly disease. These comorbidities not only increase care costs, but also limit the earning potential of the person with diabetes, resulting in higher health-care bills and reduced income with which to pay them.

Of the $245 billion spent in 2012 on diagnosed diabetes, $69 billion was a result of lost productivity, considered the indirect cost of the disease, and $21.6 billion was spent on unemployment resulting from permanent disability (paid for by the Social Security Disability Insurance program, which assists disabled workers by providing benefits to them, their spouses, or their children). Reduced productivity at work because of diabetes resulted in $20.8 billion in indirect costs. Lost productivity because of premature death associated with diabetes cost an estimated $18.5 billion. The average cost per early death is $75,100. Absenteeism from work accounted for $5 billion, or 25 million days lost of work.1

In an Association analysis of the $71 billion increase in diabetes spending from 2007 to 2012, several contributing factors were identified:1

• The prevalence of diabetes has increased by 27%, resulting in a higher number of people requiring care.

• Patients with diagnosed diabetes are getting older, which leads to increased cost of care.

• The use of prescription medications for treating diabetes and associated complications, as well as advanced treatment for cardiovascular disease, has increased.

• The cost of medical services and goods is rising more rapidly than the rate of inflation.

For every $10 spent on health care, $1 was spent directly on diabetes and its complications, and $1 in every $5 spent on health care was spent on the care of people with known diabetes. The Association reports that the 2012 cost figures may be conservative because they do not account for costs incurred by nonphysician providers (other than podiatrists), which means that the cost of dentistry and optometry services were not included in analysis.

The 2012 mortality rates for various health problems associated with diabetes are similar to those reported in 2007. Diabetes was responsible for 28% of deaths resulting from cerebrovascular disease, for 16% of cardiovascular deaths, and for 55% of deaths resulting from renal disease (Table 21.2). Dialysis, coronary bypass surgeries, stroke, and cardiac rehabilitation are expensive tertiary care interventions aimed at extending life. As evidenced by the rate of mortality in these areas, people with diabetes, many of whom have cardiovascular, renal, or cerebrovascular complications, use a high proportion of health-care dollars and resources. These costs do not factor in pain and suffering, family sacrifice and support, care by nonpaid caregivers, or excess medical costs associated with undiagnosed diabetes. The costs of clinical training programs, health-care administration, and research and development of new infrastructures do not figure into the total expenditure.

Table 21.2—Mortality Costs Attributed to Diabetes in 2012

Table 21.2—Mortality Costs Attributed to Diabetes in 2012

*Grand total comprises mortality for reasons other than diabetes, renal disease, cerebrovascular disease, and cardiovascular disease.

Source: From the American Diabetes Association.1


The person with diabetes can expect to spend $13,700 per year on medical expenditures, approximately $8,000 of which is directly attributable to diabetes. In comparison with individuals without diabetes, medical costs are approximately 2.3 times higher for those with the disease. Similarly, European studies have found that medical expenditures of people with diabetes are roughly twice those of a matched population without diabetes.8

Financial costs of treating and controlling diabetes influence the ability of patients to self-manage the disease. Insurance premiums, whether employer supported or privately funded, are costly, and many patients have plans with high deductibles. Those who are uninsured or do not have a prescription clause in their insurance find the cost of medications and testing supplies prohibitive. Even those with medication support find the copay for drugs in the second and third tier a financial burden. In the age-group >65 years, the management of T2D can place an undue burden on the finances of individuals living on fixed incomes.

The out-of-pocket (OOP) cost for health care is declining, but it still remains high for a large percentage of patients with diabetes. The reduction in OOP costs is attributable to Medicaid cost-containment strategies and the introduction of Medicare Part D in 2006, which covers prescription drug costs. Despite these improvements, 23% of patients with diabetes still face a high OOP burden, meaning that family spending on health care makes up >10% of total family income.9

An analysis of the National Health Interview Survey data found that 23% of participants with chronic diseases, including diabetes, reported cost-related medication underuse. This indicates that almost a quarter of patients with chronic conditions are unable to take their medications as prescribed because of excessive cost. Cost-related medication underuse was defined by not filling, or delayed filling, of a medication because of cost, as well as skipping medication or taking less to save money.10 Cost-related medication use, along with food insecurity, has been associated with poor glycemic control.11

Patients with T2D on average are prescribed seven or eight medications for disease-related treatment: two or three oral hypoglycemic agents, two or three antihypertensive drugs, a cholesterol-lowering medication, and aspirin (Tables 21.3 and 21.4). If the patient has another chronic illness, such as asthma, or must be treated for chronic complications associated with diabetes, such as peripheral or autonomic neuropathy or renal disease, the total number of daily medications easily can reach 10 to 12. In addition, the patient may need to purchase testing supplies, glucose tablets, or other products for health problems associated with diabetes complications, such as special footwear.

Table 21.3—Example of Monthly Medication Costs for Treating Type 2 Diabetes


1-Month supply

Retail cost*

Oral agents

Glipizide ER (generic) 10 mg b.i.d.



Metformin (generic) 1,000 mg b.i.d.



Pioglitazone 45 mg q.d.



Januvia 100 mg q.d.



Invokana 100 mg q.d.





1 carton (3 pens, 18 mg/3 mL)



1 kit (4 pens, 2 mg/pen)



Lisinopril 5 mg q.d.



Amlodipine 5 mg q.d.



Hydrochlorothiazide 25 mg q.d.



Other cardiovascular

Atorvastatin 20 mg q.d.



Enteric coated aspirin 81 mg q.d.

100 (over the counter)


*Costs listed reflect an averaging of retail prices from two major pharmacy chains.

Table 21.4—Example of Costs Associated with Insulin Use


1-Month supply

Retail cost*

Insulin analogs glargine, glulisine, levemir, lispro, aspart

One 10 ml vial


Insulin syringes

Box of 100


Glucose tabs

Tube of 50


Glucose test strips

Bottle of 50



Box of 100


Meter kit (lancing device included)

1 kit


*Costs listed reflect an averaging of retail prices from two major pharmacy chains. In some cases, the cost was identical and that is then the listed price.


Prevention and early detection of diabetes is the first step to lowering health-care costs. The skyrocketing overweight and obesity statistics indicate that an ever-increasing population is at significant risk for diabetes. If the goal is to lower economic costs related to diabetes, then nations around the world, and the U.S. in particular, must take a more aggressive stance in addressing the problems underlying the rise in obesity.

Improving diabetes care outcomes, thereby decreasing the incidence of chronic complications, can reduce the devastatingly high socioeconomic burden of diabetes. Research such as that from the Diabetes Control and Complications Trial and the U.K. Prospective Diabetes Study has demonstrated the importance of glycemic control in reducing the rates of many chronic complications, such as renal and eye disease. Each 10% increase in glycated hemoglobin A1c(A1C) is associated with a 20% increase in the rate of microalbuminuria and a 56% increase in the rate of retinopathy.12

Because cardiovascular disease accounts for ~50% of deaths attributable to diabetes, control of cardiovascular risk factors will reduce health-care costs and increase productivity among individuals with diabetes. Improved blood pressure control has a significant impact on preventing vascular and renal disease and may be equal to glycemic control in preventing chronic complications. Lipid screening and treatment of dyslipidemias can prevent myocardial and cerebrovascular mortality. Smoking cessation is critical to preserving cardiovascular health. More time and energy needs to be dedicated to informing people with diabetes of the high health risks associated with smoking.

Countries that have adopted diabetes care programs that include prevention strategies taught by health-care teams at the national, provincial, or county levels were able to improve the quality of care and optimize human and economic resources.13 Technological innovations such as the emergence of telemedicine have the potential to improve outcomes and reduce disparities in diabetes care.14 For the U.S. to adequately meet the economic challenge of preventing and treating diabetes in the next decade, the current health-care delivery system will need to shift care practices toward more fully encompassing the lifestyle issues and cardiovascular risk factors that contribute so heavily to the incidence of diabetes.


1. American Diabetes Association. Economic costs of diabetes in the U.S. in 2012. Diabetes Care 2013;36:1033–1046

2. Cefalu WT, Petersen MP, Ratner RE. The alarming and rising costs of diabetes and prediabetes: a call for action! Diabetes Care 2014;37:3137–3138

3. International Diabetes Federation. IDF Diabetes Atlas. 7th ed. 2015. Available from Accessed 6 February 2017

4. Narayan NK, et al. Impact of recent increase in incidence on future diabetes burden: U.S., 2005–2050. Diabetes Care 2006;29:2114–2116

5. American Diabetes Association. Economic costs of diabetes in the U.S. In 2007. Diabetes Care 2008;31:596–615

6. Gregg EW, et al., Trends in lifetime risk and years of life lost due to diabetes in the USA, 1985-2011: a modelling study. Lancet Diabetes Endocrinol 2014;2:867–874

7. World Health Organization. Obesity and overweight. June 2016.Available from Accessed 6 February 2017

8. Mata-Cases M, et al. Direct medical costs attributable to type 2 diabetes mellitus: a population-based study in Catalonia, Spain. Eur J Health Econ 2016;17:1001–1010

9. Li R, et al. Changes over time in high out-of-pocket health care burden in U.S. adults with diabetes, 2001–2011. Diabetes Care 2014;37:1629–1635

10. Berkowitz SA, Seligman HK, Choudhry NK. Treat or eat: food insecurity, cost-related medication underuse, and unmet needs. Am J Med 2014;127:303–310 e3

11. Berkowitz SA, et al. Material need insecurities, control of diabetes mellitus, and use of health care resources: results of the Measuring Economic Insecurity in Diabetes study. JAMA Intern Med 2015;175:257–265

12. Vijan S, Hofer TP, Hayward RA. Estimated benefits of glycemic control in microvascular complications in type 2 diabetes. Ann Intern Med 1997;127:788–795

13. Gagliardino JJ, Williams R, Clark CM Jr. Using hospitalization rates to track the economic costs and benefits of improved diabetes care in the Americas: a proposal for health policy makers. Diabetes Care 2000;23:1844–1846

14. Weinstock RS, et al. Glycemic control and health disparities in older ethnically diverse underserved adults with diabetes: five-year results from the Informatics for Diabetes Education and Telemedicine (IDEATel) study. Diabetes Care 2011;34:274–279