CMHC Pulse Blog

Around $1.3 billion of gross domestic product is allotted to diabetes care globally, according to research  from the University of Göttingen and Harvard T.H. Chan School of Public Health. The substantial economic burden of the condition continues to grow, with the average annual cost of care in the U.S. rising 13% between 2012 and 2017. Current analysis of the high expenditure and prevalence suggests the need for policies and programs that prevent and treat diabetes. Improved treatment strategies could lead to notable economic benefits and the redirection of scarce health care resources towards other areas of need.

 Two recent studies published in Diabetes Care elucidate the direct and indirect costs associated with various aspects of the condition and the increasing economic burden affecting the U.S. population.

Economic Costs of Diabetes in 2017

In March 2018, the American Diabetes Association (ADA) released a report detailing the fiscal impact of diabetes on the U.S. economy. Labeling it the most costly chronic illness in the country, the report updates previous estimates of the economic burden and quantifies health resource use and productivity loss associated with the condition.


Using a prevalence-based approach that combined population demographics with diabetes prevalence, epidemiological data, health care cost, and economic data, the research team analyzed national surveys, Medicare files, and one of the most extensive commercial insurance databases in the U.S. The total estimated cost of diagnosed diabetes expenses was $327 billion in 2017, including $237 billion in direct medical costs and $90 billion in lost productivity. 

Hospital in-patient care and prescription medications were the largest components of medical expenditures, amounting to 30% of total medical costs each. The data revealed that one of every four health care dollars is spent on a patient with diagnosed diabetes, while one of seven health care dollars is directed towards diabetes treatment. Yearly medical expenses of diagnosed diabetes were found to be over $16,000 on average, with $9,601 directly attributed to diabetes – 2.3 times higher expenditure than people without diabetes. 

The inability to work as a result of disease-related disability and reduced productivity at work resulted in the highest in-direct costs associated with the condition, totaling $37.5 billion and $26.9 billion respectively. Other in-direct costs included increased absenteeism, reduced productivity for the unemployed, and lost productive capacity due to early mortality ($19.9 billion for the 277,000 premature deaths attributed to diabetes). 

The economic burden of diabetes  increased by 26% from 2012 to 2017 due to increased prevalence and increased cost per person associated with diabetes, according to study findings. Growth in spending was found primarily among the population aged 65 and older which directly contributes to the rising economic cost of the Medicare program and indicates the pressing need to make diabetes a national priority.

Diabetes Cost by Population

The ADA’s report also includes a detailed breakdown of costs per specific population, which reveals the highest per capita health expenditures in non-Hispanic black ethnic groups. Compared to non-Hispanic white populations, per capita hospital inpatient costs were 23% higher among non-Hispanic blacks and 29% lower among Hispanics. Additionally, non-Hispanic blacks had 65% more emergency room visits than the diabetic population as a whole. In general, total per capita health costs were higher among men than women, totaling $10,060 and $9,110 respectively. 

The majority of the population with diabetes covers its health care costs with government insurance (including Medicare, Medicaid, and military) amounting to 67.3% of total cost. While uninsured diabetic patients have 60% fewer reported physician visits and are prescribed 52% fewer medications than the insured population, they have 168% more emergency department visits than people with insurance coverage. 

The Economic Burden of Elevated Blood Glucose Levels in 2017

 A concurrent study  published in April of this year aimed to update national estimates of the economic burden of prediabetes, undiagnosed diabetes, as well as gestational diabetes.  Combined with the updated report, these new statistics provide a more detailed picture of the nationwide burden associated with elevated blood glucose levels.

 Executive director of IHS Markit, Timothy M. Dall, and colleagues analyzed an extensive set of clinical and observational data to determine prevalence, use, and costs associated with the subsets of diabetic conditions. The team analyzed medical claims to calculate patient expenditure compared to non-diabetic patients, and estimated reduced employment and productivity associated with diabetes based on national surveys and a systematic review of published studies.

 According to their analysis, diabetes cost the American population $404 billion in 2017 – a significantly larger number than the ADA’s report estimate. The inclusion of prediabetes, gestational diabetes, and undiagnosed diabetes statistics into the calculations increased the total annual expenditure by $76.8 billion. Individuals with undiagnosed diabetes had a per capita estimated cost of $4,250 annually, while those with prediabetes accounted for $500. Medical expenses related to gestational diabetes added $5,800 per pregnancy to total cost.

In total, the economic burden of diabetes amounts to $404 billion per annum , with an individual cost of $1,240 per American in higher medical costs and lost productivity nationwide. These findings indicate an additional fiscal burden associated with other diabetic conditions such as prediabetes, gestational, and undiagnosed diabetes. 

Current estimates reveal the significant socio-economic burden diabetes has on the medical community and the population at large. Both studies present alarming statistics, underscoring the importance and urgency of adopting more comprehensive screening methods as well as improving prevention and treatment methods across the globe. 



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