The Economic Costs of Diabetes

Abstract

Diabetes care involves three types of economic consequences: (1) direct costs, resources used to prevent, detect, diagnose, and treat diabetes; (2) indirect costs resulting from loss of productivity, absenteeism, early retirement, disability, and death; and (3) intangible costs from the effect of diabetes on quality of life. The economic costs of diabetes have involved two areas: (1) the cost of illness, which initially only compared direct and indirect costs between people with diabetes and without diabetes, and (2) the cost of interventions through cost-effectiveness analysis. The cost of illness approach is a descriptive type of study relating all costs to a specific disease and involves two approaches: top-down or burden of disease studies and person-based, bottom-up studies. Top-down studies involve the direct costs of illness, including inpatient care, outpatient services, and nursing home care, and have particularly focused on the progressive and lifetime costs of complications and comorbidities. Bottom-up studies involve societal costs and quality-of-life measures. Costs of illness studies include cross-sectional and incidence-based approaches. The former have confirmed the impact of diabetes per capita and the large proportional impact of diabetes on health systems, while incidence-based studies have shown the incremental medical care costs of diabetes before and after diagnosis, showing that the rise in medical spending begins well in advance of the diagnosis of diabetes, accelerates as diagnosis approaches, immediately afterwards, and steeply increases among patients with complications. The global cost of diabetes for 2019 was estimated at 760 billion US dollars, accounting for 1–8% of the global gross domestic product, and its main drivers are poor glycemic control, medications, hospitalizations, macrovascular/microvascular complications, and individual characteristics, including the number of medical visits and comorbidities. People with diabetes have medical expenditures two to three times higher than people without diabetes, accounting for one in four health care dollars. Compared to people without diabetes, people with diabetes receive more medical services, including outpatient visits, hospital admissions, accidents, and emergency department attendances. Hospital admissions account for two-thirds of costs, of which a large proportion are avoidable and related to deficiencies in outpatient care. The economic analysis of interventions includes comparisons of health care utilization and costs between cohorts of patients with good glycemic control and patients without improvement documenting significant savings within 1 or 2 years of improvement and cost-effectiveness analysis of intensive glycemic and metabolic control. Achieving glucose, cholesterol, and blood pressure targets in patients with type 2 diabetes leads to substantial gains in clinical outcomes, a lower incidence of diabetes complications, and quality-adjusted life years (QALYs). Randomized clinical trials in patients with type 1 and type 2 diabetes have shown significant increases in direct costs but substantial reductions in the risk and cost of complications and more time free of complications. Underlying factors driving the rising costs of diabetes include deficiencies in health systems and changing demographics associated with increased life expectancy and aging. To make matters worse, many patients with diabetes struggle to pay medical bills or to pay them at all. To reduce the out-of-pocket costs of prescription drugs, patients resort to several strategies including self-treatment, avoiding taking medications, or asking doctors to prescribe lower-priced medications with negative consequences to their health. Albeit still limited in scope, the study of diabetes costs confirms the increasing impact of the disease on people with diabetes, their families, national health systems, and societies and represents a call for action to respond in a comprehensive manner to all phases in the natural history of the disease, at the primary and secondary prevention levels, and stresses the importance of improving the quality of diabetes care to reduce human suffering and economic waste.

Paradigms of Medical Care

• “We must do everything, no matter the cost.”

• “We must do everything at the lowest possible cost.”

• “We must add value to resources.”

Introduction

The Value of Health Care.

Achieving high value for patients must become the main goal of health care delivery, with value defined as the health outcomes achieved per dollar spent [1, 2]. For a medical condition like diabetes, no single outcome captures the results of care [1]. Outcomes in health care are multidimensional and interactive. Clinicians traditionally are concerned with the clinical outcomes of treatment (Bootman et al. 1996); many of them conceive that economic resources are nonlimited or at least should be and that patients’ views and opinions are secondary to their wisdom and expertise. During the last three decades, health care payers and administrators have focused on the economic outcomes of health care decisions, and patients are becoming increasingly knowledgeable and involved in health care (Bootman et al. 1996). They want to know how their quality of life will be affected or about the satisfaction of other patients with the proposed treatment. Clinical, economic, and patient outcomes are closely linked. The true value of health care interventions and programs can only be assessed if all three dimensions of outcomes are measured and considered (Bootman et al. 1996). When aligned and measured, the three outcomes represent health politics [3].

The intrinsic desire to improve patients’ perspectives contrasts with the reality of translating the results of evidence-based medicine to all patients and their involved costs. Diabetes costs include the costs of disease at several levels: from individuals to the family, health providers, payers, institutions and society, and the clinical, economic, and patient outcomes obtained by glucose and metabolic control on the natural history of disease. Above all, the patient’s vision prevails, as does their longing to receive timely medical care to satisfy their needs for physical and emotional support.

Economics in Health Care: The Basics

Economics is about getting better value from the deployment of scarce resources [4]. Since the 1960s, economists have turned their attention to health services and have considered the economic aspects of different alternatives in the financing, planning, and management of health care [4]. Costs are important in economics, but not more than benefits. Cost is a measure of sacrifice in that since resources are finite, deploying them means a lack of availability for other purposes [4]. Clinicians are usually not aware of the economic resources they consume and the cost of those resources [4]. Health economics is about opportunity cost and benefits because keeping costs down means maximizing the benefits and efficiency of health care [4]. From this perspective, the view that health services (diabetes care in this case) should be about meeting total needs results in confused thinking and romanticism in health care planning [5]. There are not and never will be enough resources to cover all the costs of diabetes care [6]. If this notion of scarcity of resources is accepted, the logic of comparing the costs and benefits of an intervention is more appealing [6]. Resources devoted to an intervention mean less resources available to another. From this perspective, costs should be addressed in terms of benefits sacrificed for the best alternative use of resources: opportunity costs [6]. In some cases, a cost analysis can provide useful information but does not consider the relative effectiveness of treatment alternatives, and a cost-benefit approach should be advocated, weighing the benefits and costs of different patterns of care [5]. In other cases, when scarce resources should be devoted to one intervention rather than another, a cost-benefit analysis should be undertaken [6]. One final issue of health economics is ethical: clinical practice requires resources for diagnosis, monitoring, and treatment. The inevitability of considering cost can be perceived for resources over which clinicians have control, but it is not easy when several categories (sources of resources) are not available [7]. Allocation of scarce resources is an everlasting problem despite any utopian dreams of unlimited care for everyone and a variety of efforts and proposals assuming that that dream will become a reality [8]. This issue involves moral questions about justice and equity and implications for quality of life [8, 9]. To summarize, Drummond et al. proposed a series of basic notions of health economics for clinicians wishing to acquire a grasp in the field, including [10]: (1) human wants are unlimited but resources are finite, (2) economics is about benefits, but it is also about costs, (3) health care delivery is only one way of improving the health of the population, (4) choices in health care should always involve value, and (5) reducing inequality always comes with a price [10].

Economic analysis has become an integral component of health programs all over the world. In 2021, the World Health Organization (WHO) reported that global spending on health more than doubled in real terms over the last two decades, reaching 8.5 trillion USD in 2019, or 9.8% of the global gross domestic product [11]. In the same report, the WHO describes the inequalities in the distribution of economic resources: high-income countries account for 80%, of which 70% comes from the government, while low-income countries are highly dependent on out-of-pocket spending (44%), and external aid (29%) [11]. Most concerning is the fact that the share of health in government spending increased in upper-middle and high-income countries, stagnated in lower-middle-income countries, and declined in low-income countries [11]. Out-of-pocket spending is a financial burden for people with diabetes, even in developed countries [12, 13], and is largely unaccounted for in studies about diabetes costs. The high frequency of comorbidities will increase the financial burden of people with diabetes and discourage the continued use of medications that prevent disease progression [14].

To summarize, economic analysis of costs is essential for the following reasons:

• 1. They are limited and finite, even in developed countries.

• 2. In countries like the United States, health expenditures have surpassed inflation rates without accompanying reductions in the burden from the leading causes of morbidity and mortality.

• 3. The competing demands of other programs influencing health (education, employment, nutrition).

• 4. Persistent deficiencies in the use of economic resources and waste despite scarcity. Increasing resources does not necessarily result in improvements in the quality of health care; it may also reduce it.

Interestingly, developed countries pioneered the design of methods to estimate the costs of disease, measure the results of interventions, and devise strategies to contain the ascending costs of health care.

Economic Analysis and Financial Analysis.

Economic analysis consists of the estimate of the net value (the direct and indirect costs) of diseases, whereas financial analysis refers to the comparison of alternative resources, or the “opportunity cost.” From the medical and patients’ perspectives (when not out-of-pocket), costs would be irrelevant. In the “real world” of limited resources, administrators or payers have to decide. To make these decisions, it is essential to have information about the consequences (outcomes) of different interventions, in terms of not only clinical but also economic effectiveness.

Costs.

Medical care involves three types of costs: (1) direct medical costs: directly attributed to the disease and its management, involving screening, prevention, diagnosis, and treatment and including medical visits, medications, and hospital admissions; (2) direct nonmedical costs; (3) indirect morbidity and mortality costs to patients, their families, and society; and (4) intangible costs, short-term and long-term consequences of disease for patients, their families, and society (years of life lost, loss of opportunity for spouses and children [15].

Types of Economic Analysis

Economic evaluation is about costs and consequences (Drummond et al. 2015). It provides a framework to make the best use of clinical evidence through an organized approach to the available alternatives on health, health care costs, and other valuable effects. Economic and clinical evaluations are not alternative approaches; they are essential components to achieving the desired outcomes (Drummond et al. 2015). The evaluation of new or existing health care interventions involves five steps: (1) efficacy: the capacity to achieve its stated goals in optimal circumstances, (2) effectiveness: the demonstration that an intervention does more good than harm, (3) efficiency or cost-effectiveness: the combined assessment of the effectiveness of the health care intervention and the economic resources required to deliver the intervention, (4) availability: matching the supply of services to the persons who require them, (5) distribution: examination of who gains and who loses by choosing to allocate resources to an intervention instead of another [16].

Efficiency Measures

Three methods are used to assess the economic consequences of interventions: cost-benefit analysis (CBA), cost-effectiveness analysis (CEA), and cost-utility analysis:

• Cost-benefit analysis is defined as all of the costs required to achieve a benefit (a clinical outcome) [15, 17]. A main challenge in cost-benefit analysis is the ability to account for all the costs and benefits in monetary units.

• Cost-effectiveness analysis is defined as a series of analytical and mathematical procedures that support selecting an intervention [15, 17]. It can be measured in monetary units or clinical outcomes. The main challenge consists of establishing the magnitude of the clinical benefit.

• Cost-utility analysis is defined as the total cost to achieve a unit of quantity or quality of life. Measurement units are quality-adjusted life years (QALYs) and disability-adjusted life years (DALYs) [15, 17]. The rationale for using QALYs is that it allows for comparisons of different therapies regardless of health problems or diseases [9].

The Study of the Costs of Diabetes.

Every disease involves three types of costs: direct costs, resources used for prevention, screening, diagnosis, and treatment; indirect costs from loss of productivity, absenteeism, early retirement, disability, and early death; and intangible costs from the effect of disease on the quality of life of people. The study of the financial costs of diabetes has covered two complementary fields: (1) cost of illness studies, which initially focused on comparisons of direct costs between people with diabetes and without diabetes and which increasingly include outcomes and (2) comparative analysis of interventions. Costs of illness studies are descriptive, cross-sectional, or longitudinal, relate all costs to a specific disease, and involve two approaches: top-down, or burden of disease, and bottom-up, or person-based. Top-down studies include the direct costs of illness (inpatient, outpatient, nursing home) between people with and without diabetes and have particularly focused on the progressive and lifetime costs of complications and comorbidities. Bottom-up studies involve societal costs and quality-of-life measures. Cross-sectional studies have confirmed the impact of direct diabetes costs on a country’s gross domestic product and per capita and the large proportional impact of diabetes on health systems, while incidence-based studies have shown the incremental medical care costs of diabetes before and after diagnosis, showing that the rise in medical spending associated with diabetes begins well in advance of the diagnosis of diabetes, accelerates as diagnosis approaches, immediately after diagnosis, and steeply increases for patients with complications. The study of the financial consequences of diabetes is a recent topic that started with cost-of-illness studies and moved forward to include cost-effectiveness analyses of individual interventions, economic analyses of randomized controlled trials, and systematic reviews. The first studies about the cost of illness were carried out in Sweden, the United Kingdom, and the United States in the 1980s. The initial studies about the cost of diabetes complications started to appear in the 1990s along with evidence about the benefits of metabolic control on the risk of microvascular and macrovascular complications. In the last two decades, the number and scope of studies about diabetes have escalated to include cost-of-disease and cost-effectiveness studies. Table 3.1 depicts a chronological summary of studies about the costs of disease in diabetes, starting with the classical report by Jönsson in Sweden. Beyond depicting the direct and indirect costs of diabetes, over the years, cost of illness studies have been enriched by the inclusion of other relevant variables in the outcomes, like comorbidities, avoidable hospital admissions, and patient outcomes:

Table 3.1 Studies about the costs of diabetes

The Economic Burden at the Global Level.

Measuring the global costs of diabetes confirmed the magnitude of the problem and revealed persistent limitations in objective measurement [66,67,68]. In 2015, a systematic review by Seuring et al. reported large variations in methods and cost estimates and the absence of control groups in most studies, resulting in large differences in direct and indirect costs. In their review, direct costs ranged from $242 USD on out-of-pocket expenditures in Mexico to $11,917 USD for direct costs in the United States. Indirect costs show similar variations: from $45 USD in Pakistan to $16,914 USD in the Bahamas [66]. Interestingly, and in stark contrast with high-income countries, a substantial part of the cost burden comes out-of-pocket. Regression analysis revealed that direct costs are positively associated with the gross domestic product of each country and that the United States has particularly high costs [66]. In 2017, Bommer et al. published the results of the first global cost-of-illness study building on the methods of the IDF Diabetes Atlas, in which the estimated cost of diabetes in 2015 amounted to $1.31 trillion USD, or 1.8% of the world gross domestic product (GDP) [67]. In their report, indirect costs represented 34.7% of the total, due to labor-force dropout (48.5%), absenteeism (3.9%), presenteeism (2.1%), and death [67]. Morbidity-associated factors dominate in high-income countries, whereas premature mortality accounts for most of the indirect costs in middle-income and low-income countries [68]. Substantial regional variations were observed in the economic costs of diabetes: North America had the largest absolute burden, sub-Saharan Africa had the lowest costs, and South Asia was in the middle. High-income countries contribute the most of the economic burden of which 36.5% are indirect costs, and low-income countries bear the lowest burden with an average of 0.7% of GDP [68]. Last but not least, in 2020, the International Diabetes Federation updated its report about global direct diabetes expenditures based on prevalence estimates, United Nations population estimates, World Health Organization health expenditure per capita, and ratios of health expenditure for people with diabetes and without diabetes [68]. The global cost of diabetes for 2019 in adults aged 20–79 years was estimated at 760 billion USD, with 68.7% of the spending on people aged 50–79 years, and is expected to grow to $825 billion USD by 2030 and $845 billion USD by 2045 [68]. Like in previous reports, wide variations in expenditures were observed. The United States has the largest expenditure estimated at $294.6 billion, followed by China and Brazil with USD $109.0 billion and USD $52.3 billion, respectively, and afterwards by Germany (43.8), Japan (23.5), Mexico (17.0), France (16.9), the United Kingdom (14.1), Canada (12.3), and the Russian Federation (10.6) [68]. The main drivers of higher direct costs are poor glycemic control, medications, ambulatory care, hospitalizations, diabetic foot ulcers, cardiovascular disease, end-stage kidney disease, and individual characteristics, including the number of medical visits and the number of comorbidities. In the United States, for example, diabetes costs reached $404 billion USD in 2017. People with diabetes have medical expenditures 2.3 times higher than people without diabetes, accounting for one in four health care dollars. Accurate and comprehensive information on the global economic burden of diabetes will assist clinicians and policy makers in making informed decisions, obtaining resources for activities to prevent or slow its progression, and evaluating the benefits of these interventions [68]. Cost-of-illness studies have been very useful to confirm the increasing economic burden of diabetes at a health-system, national and global level, but do not provide an indication of the value obtained for the money spent [69]. Strategies to analyze the effectiveness of interventions are needed.

Cost-effectiveness of Interventions.

Except for politicians and clinicians, it is universally recognized that the economic resources available to meet the demands for health care are limited [70]. Measuring effectiveness in clinical practice should be outcome-oriented, with length and quality of life as the ultimate objectives [70]. Economic analyses are used to describe the costs of health care programs and to ensure that value is obtained for the money spent [71]. The economic analysis of interventions in diabetes started in the 1990s and evolved from economic models to compare the costs and benefits of medications in delaying the progression of advanced complications [72], cost-effectiveness analysis of controlled clinical trials like the Diabetes Control and Complications Trail (DCCT) [73, 74], the United Kingdom Prospective Diabetes Study (UKPDS) [75,76,77,78,79,80,81], the Steno-2 Study [82], and comparisons of health care use and costs between real and simulated cohorts of patients with good glycemic control and patients without improvement [83,84,85,86,87,88,89,90].

The evidence collected from clinical trials about intensive therapy has been shown to reduce the risk and advance of diabetes complications [74]. Economic analysis and models have been used to evaluate the cost-effectiveness of intensive therapy for people with type 1 and type 2 diabetes [73,74,75,76,77,78,79,80,81,82,83,84,85,86,87,88,89,90]. An economic analysis of the DCCT estimated the costs of therapy to be two to three times higher than those of conventional therapy [74]. The results of a Monte Carlo simulation model showed that intensive therapy could reduce 41% the risk of blindness, from 34 to 20%, the risk of end-stage renal disease by 71%, from 24 to 7%, and 43% the risk of amputations, from 7 to 4% [73]. The final analysis compared additional costs from intensive management with savings resulting from preventing or delaying chronic complications: $2000.00 USD per patient with blindness per year, $31,000.00 USD per patient with amputation per year, $45,000.00 USD per patient with end-stage renal disease per year. According to the DCCT, intensive therapy for type 1 diabetes delays 15.5 years in the occurrence of chronic complications and would extend 5.1 years the life expectancy of these patients [73]. Implementing intensive rather than conventional therapy for all the people with type 1 diabetes in the United States would result in a gain of 920,000 years of sight, 691,000 years free from end-stage renal disease, 678,000 years free from lower extremity amputation, and 611,000 years of life at an additional cost of 4.0 billion USD over the lifetime [73]. These were the estimated costs to deliver intensive diabetes care in 1996. The question is if they are affordable in 2022 with the increasing prevalence of type 2 diabetes and the escalating costs of treatment for type 1 diabetes (see below)?

Economic analysis was not initially included in the study design of the UKPDS. However, data were collected throughout the study and were supplemented by cross-sectional surveys of non-patient health care use and quality of life [75]. The evaluations of tight versus less tight blood pressure control [76, 77], intensive versus less conventional blood glucose control [78, 79], and metformin [80] showed that each intervention was highly cost-effective and that all could be provided at modest total costs. Estimation of the cost of all consultations, visits, hospital admissions, and procedures showed that diabetes complications are associated with substantial immediate and long-term health care costs, not only in the year in which an event occurs but also in permanently raising the average level of inpatient and outpatient costs in subsequent years [81]. In the Steno-2 study, an intensified multifactorial approach was compared with a routine multifactorial intervention for 7.8 years in high-risk individuals with type 2 diabetes and microalbuminuria [82]. At the end of follow-up, individuals randomized to intensified therapy survived for a median of 7.9 years longer, and incident cardiovascular disease was delayed by 8.1 years with a relative risk reduction of 45% and an absolute risk reduction of 20% [82]. The risk of nephropathy, retinopathy, and heart failure was significantly reduced in the intensified therapy group [82]. Information on direct health care costs was retrieved from health registries, and the costs in two groups of 80 patients each were compared. No statistically significant differences were found in total direct costs between the two groups during a 21-year follow-up period. In the intensified therapy group, yearly expenses for prescription drugs were higher than in the conventional therapy group, while in contrast, yearly expenses for primary care and hospital admissions were lower in the intensified therapy group. The difference was driven by the increased costs for admissions related to cardiovascular disease [82]. After 8 years, the yearly costs per individual increased steeply in the conventional treatment group but remained unchanged in the intensified treatment group, albeit after 15 years, the yearly costs in the conventional treatment group started to increase [82]. The results of the study reflect that cardiovascular disease and mortality are delayed by about 8 years in the intensified therapy group, which increases life expectancy by 7.9 years and postpones the occurrence of cardiovascular disease by 8.1 years [82].

Simultaneous reports about the benefits of improving glycemic and overall diabetes control confirmed that they were cost-saving and cost-effective. A historical cohort study conducted in 1992–1997 in a health maintenance organization from the United States showed that mean total costs were $685 to $950 USD less each year in the improved cohort for 1994–1997 [83]. Cost savings in the improved cohort were statistically significant among patients with higher baseline HbA1c levels, and beginning in the year following improvement, the use of services was consistently lower in the improved cohort [83]. In England and Wales, a summary of characteristics of patients with type 2 diabetes from the National Diabetes Audit was used to assess the impact of achieving treatment targets for HbA1c, total cholesterol, and blood pressure on clinical outcomes and health care costs across general practitioner practices [84]. Using the UKPDS Outcomes to estimate long-term health outcomes and health care costs, achieving HbA1c, cholesterol, and blood pressure targets led to a lower incidence of diabetes-related complications, in addition to 0.4–0.6 QALYs and 0.6 years of life gained over a lifetime for each additional target met [84]. The projected health care cost savings arising from fewer diabetes complications as the result of achieving one, two, or three targets compared to none were £859, £940, and £1037 over a patient’s lifetime. Interestingly, a typical patient in the lowest-performing decile was projected to gain between 201 and 231 years of life if all patients achieved all three targets [84].

The cost-effectiveness analysis of a hypothetical cohort of people with type 2 diabetes showed that the incremental cost-effectiveness ratio for intensive glycemic control was $41,384 USD per QALY; for intensified blood pressure control, the cost-effectiveness ratio was −$1959 USD per QALY; and the cost-effectiveness ratio for reduction of serum cholesterol level was $51,889 per QALY and increasing with age [85]. Individualized control is cost-saving, primarily due to lower medication costs and decreased life expectancy due to an increase in complications, but also produces more QALYs due to fewer episodes of hypoglycemia and medications [86].

The Evidence about Cost-Effectiveness in Diabetes Management.

Starting in 2000, 2010, and 2020, three systematic reviews in which diabetes interventions were stratified confirmed their positive impact in the following categories: (1) clearly cost-saving, including preconception care, intensive hypertension control with ACE inhibitors or angiotensin receptor blockers to prevent end-stage renal disease, comprehensive foot care and patient education to prevent and treat foot ulcers, telemedicine for diabetic retinopathy screening compared with office screening; (2) clearly cost-effective interventions included intensive lifestyle interventions to prevent type 2 diabetes, universal opportunistic screening in high-risk populations, intensive glycemic control (targeting HbA1c <7%) as implemented in the UKPDS study, multicomponent interventions involving behavior change/education and pharmacological therapy for hyperglycemia, hypertension, dyslipidemia, microalbuminuria, nephropathy/retinopathy, secondary prevention of cardiovascular disease with aspirin, early detection of complications and bariatric surgery for individuals with type 2 diabetes, statin therapy for secondary cardiovascular prevention, diabetes self-management education and support, counseling and treatment for smoking cessation, screening every 3 years for type 2 diabetes, integrated, patient-centered care, self-monitoring of blood glucose three times per day among people using insulin, intensive glycemic management for type 2 diabetes, collaborative care for depression [87,88,89]. The last frontier in cost-effectiveness analysis is the estimation of the health utility impact of diabetes complications [90]. Neuwahi et al. combined the Health Utilities Mark 3 data on 15,252 patients with type 2 diabetes from the Action to Control Cardiovascular Risk in Diabetes (ACCORD) and Look AHEAD (Action for Health in Diabetes) trials, classified complications and estimated utility decrements [90]. The largest, statistically significant health utility decrements reported were for stroke, amputation, congestive heart failure, dialysis, reduced glomerular filtration rate, angina, and myocardial infarction [90]. Health utility estimates can be used to improve population-based models and to inform policy makers about the benefits, costs, and cost-effectiveness of type 2 screening, prevention, and treatment programs [90].

The Economic Burden of the Disease on Persons with Diabetes and Their Families

The opening statement of the classic article by Ed Wagner’s group about chronic disease is probably one of the few “permanent paradigms” in medicine, and an inescapable truth: “in chronic illness, day-to-day responsibilities (including costs) fall most heavily on patients and their families” [91]. The indirect and intangible costs of diabetes are underestimated, their burden increases over the years, and comorbidities impose additional charges. The costs of chronic care, for cardiovascular diseases and cancer, are becoming a serious burden for patients [92]. Diabetes is not an exception, and patients are increasingly suffering signs of financial strain as out-of-pocket costs ascend [92]. The burden of financial hardship from medical bills among individuals with chronic disease results in financial distress, food insecurity, and cost-related medication nonadherence [93], but it is largely unaccounted for in the analysis of diabetes costs. Berkowitz et al. published the results of a cross-sectional analysis of data from 9696 individuals with a variety of chronic diseases including diabetes, in which 23.4% reported cost-related medication underuse, 18.8% reported food insecurity, and 11.0% reported both [94]. The high overall prevalence of food insecurity and cost-related medication underuse highlights one of the main barriers to successful diabetes management [94], but these realities are vetoed in academic forums, where the advantages of new and costly medications are championed regardless of their costs. The ugly reality has to be recognized and addressed: national spending on glucose-lowering medications among adults with diabetes increased 240% by $40.6 billion from 2005–2007 to 2015–2017 in the United States of which insulin and noninsulin medications contributed $26.6 billion (169%) and $12.0 billion, respectively [95]. For insulin, the increase was mainly associated with higher expenditures from analogs (156%); for noninsulin medications, the increase was the result of higher costs of new medications (88%), while the cost of older medications decreased by 34% [95]. Most importantly, the increase in insulin spending came from higher costs per user (out-of-pocket costs) [95]. Having to use multiple insulin doses, the status of people with type 1 diabetes is more alarming [57]. A retrospective analysis of direct costs for children and adolescents with type 1 diabetes showed that mean annual costs increased from $11,178 USD in 2012 to $17,060 USD in 2016, driven primarily by the increase in the costs of insulin, from $3285 USD to $6255 USD, and technology, from $1747 USD to $4581 USD [57]. The authors of this study conclude that the short-term burden of costs could be offset by future savings and that cost-effective analyses should be undertaken to support optimal care [57]. The bottom line is that within 5 years, the direct costs for children and adolescents with diabetes increased by 34.5%, or 7% per year, by comparison with the average annual inflation rate of 1.96% [57]. As already mentioned, the costs of insulin were mainly responsible, increasing by 52.5% in 5 years, or 10% per year!

Considering the acute and long-term health risks of poor glycemic control, it is vital that people with type 1 (and type 2) diabetes have uninterrupted access to insulin (and antidiabetics), yet millions of people with diabetes around the world still struggle to procure medications [96]. Patients are clearly aware of and conceptualize the experience of being without insulin as a “life or death” emergency and have described multiple insulin access barriers including unaffordable health care, institutional unresponsiveness, and personal life transitions [96]. In the face of these adversities, patients resort to several strategies, including omitting medications, asking for lower-priced medications, or self-treatment [97, 98]. Unable to consistently rely on the health care system to facilitate insulin access, patients turn to non-traditional and dangerous alternatives [96]. The negative consequences of these actions have been confirmed but are inexorably linked to the preeminence of social determinants of health in the continuity of diabetes management over a lifetime. The situation is even worse in many low- and middle-income countries which are unable to provide “comprehensive diabetes care” established by international guidelines, and consequently, diabetes care is delivered at a minimal level [99]. To address this reality, Gregory et al. developed a 30-year type 1 care model that looked at the onset of complications, mortality, financial costs, and quality-of-life measures associated with achieving HbA1c levels for “minimal” and “intermediate” care in six countries with varying income levels and geographic locations (Mali, Tanzania, Pakistan, Bolivia, Sri Lanka, and Azerbaijan) [99]. Minimal care was defined as receiving human insulin once or twice per day, two syringes per week, routine clinical care and hospital admissions, and no screening for complications [99]. Intermediate care consisted of a basal bolus regimen for human insulin delivery, 2–3 capillary blood glucose testing per day, point-of-care HbA1c testing, screening for complications, diabetes education, and 24-h emergency call services [99]. The expected outcome for minimal care was an HbA1c range of 12–14% and from 8.0 to 9.5% for intermediate care [99]. According to their model, the cumulative 30-year incidence of complications was much lower for “intermediate” care than “minimal care” [99]. For many people with diabetes all over the world, even intermediate diabetes care is inaccessible or unaffordable.

Conclusions Achieving glucose, cholesterol, and blood pressure targets in patients with diabetes leads to substantial gains in clinical outcomes, a lower incidence of diabetes complications, and quality-adjusted life years (QALYs). Randomized clinical trials significantly increase direct costs but substantially reduce the risk and cost of complications and increase the time free of complications. Underlying factors driving the rising costs of diabetes include deficiencies in health systems, changing demographics associated with increased life expectancy and aging, and the persistence of the status quo. Simmons and Wenzel accurately claimed that in many cases, diabetes inpatients are a case of lose, lose, lose [35]. Health systems unable or unwilling to reinforce multidisciplinary outpatient management can only expect to see increases in the financial and health burden of preventable hospitalizations [36]. To make matters worse, many patients with diabetes struggle to pay medical bills or to pay them at all. To reduce the out-of-pocket costs of prescription drugs, patients resort to several strategies including self-treatment, avoiding taking medications, or asking doctors to prescribe lower-priced medications with negative consequences for their health. Clinical trials have shown that diabetes interventions are cost-saving or cost-effective; achieving these results in the real world is a great challenge. Albeit limited in scope, the study of diabetes costs confirms the increasing impact of the disease on people with diabetes, their families, national health systems, and societies, and represents a call for action to respond in a comprehensive manner to all phases in the natural history of the disease at the prevention level (primary and secondary), at the health care level, and stress the importance of improvements in disease management. The crisis of diabetes costs is worsening; the time to act is now [100].

Multiple-Choice Questions

• 1. Value of health care is defined as:

  • (a) Health care at the highest cost

  • (b) Health outcomes appreciated by pharmaceutical companies

  • (c) Health outcomes appreciated by physicians

  • (d) Health outcomes achieved per dollar spent

  • (e) Health outcomes achieved per dollar saved

• 2. The true value of health care can be assessed:

  • (a) Only if clinical outcomes are considered

  • (b) Only if economic outcomes are considered

  • (c) Only if patients’ outcomes are considered

  • (d) None of the above

  • (e) All of the above

• 3. Health economics is about

  • (a) Getting better value from the deployment of endless resources

  • (b) Getting better value from the deployment of scarce resources

  • (c) Learning about the use of economic resources

  • (d) Saving resources at all cost

  • (e) The use of resources to obtain the most advanced technology and medications

• 4. Opportunity costs are defined

  • (a) As benefits sacrificed for the best alternative

  • (b) As benefits obtained for the most expensive alternative

  • (c) As benefits obtained for the most clinically effective alternative

  • (d) As risks avoided for the best alternative

  • (e) As risks avoided for the future scarcity of an intervention

• 5. By comparison with people without diabetes, direct health care costs in people with diabetes

  • (a) Are equal

  • (b) Are lower

  • (c) Are one time higher

  • (d) Are two to three times higher

  • (e) Are ten times higher

• 6. Out-of-pocket spending:

  • (a) Is higher in developed countries

  • (b) Is the same all over the world

  • (c) Is lower in low-income countries

  • (d) Is higher in low-income countries

  • (e) Is irrelevant

• 7. Indirect medical costs include:

  • (a) Medical visits, medications, hospital admissions

  • (b) Patients and family expenditures

  • (c) Years of life lost, loss of opportunity for spouses and children

• 8. Direct medical costs include:

  • (a) Medical visits, medications, hospital admissions

  • (b) Patients and family expenditures

  • (c) Years of life lost, loss of opportunity for spouses and children

• 9. Intangible medical costs include:

  • (a) Medical visits, medications, hospital admissions

  • (b) Patients and family expenditures

  • (c) Years of life lost, loss of opportunity for spouses and children

• 10. Cost-effectiveness analysis is defined as:

  • (a) All the costs required to achieve a clinical outcome

  • (b) Analytical and mathematical procedures supporting an intervention

  • (c) Total costs to achieve a unit of life saved

  • (d) Total costs to achieve a unit of quality of life

  • (e) The cost to achieve a medical outcome as appraised by clinicians

Glossary

Modified from [101,102,103].

Cost

The value of resources engaged in a service.

Cost-benefit analysis

An analysis to consider the economic and social costs of medical care and the benefits of reduced loss of net earnings for preventing death or disability. A method for comparing the value of the outcome of all resources consumed (costs) by an intervention against the value (benefits) of the outcome.

Cost-effectiveness analysis

A method designed to assess the comparative impact of expenditures on different health interventions. Identifying, measuring, and comparing the significant costs and consequences of alternative interventions to determine the degree to obtain the desired objectives or outcomes.

Cost-effectiveness ratio

A comparison between alternatives, the difference in cost divided by the difference in effectiveness.

Cost-utility analysis

Economic evaluation in which the outcomes of alternative interventions are expressed in single “utility-based” units of measurement. The most appropriate approach when quality of life is an important outcome.

Direct costs

Diagnosis and treatment costs borne by the health system, the community, and patient families.

Health economics

Monetary or humanistic trade-offs between wants, needs, and the scarcity of resources to fulfill these wants.

Incremental costs

Difference between marginal costs of alternative interventions.

Indirect costs

Lost productivity caused by disease to the individual, the family, the society, or the employer.

Intangible costs

Costs of pain, grief, suffering, loss of leisure time, years of life lost.

Outcomes

The results and value of medical interventions. Multidimensional and dependent on three perspectives: clinical, economic, patients’. The true value of health care interventions can only be assessed if all three dimensions of outcomes are measured and considered.

Pharmacoeconomic research

Identification, measurement, and comparison of costs (resources consumed) and consequences (clinical, economic, humanistic) of pharmaceutical products and services.

Pharmacoeconomics

Description and analysis of the costs of drug therapy to health care systems and society.

Quality-adjusted life years

Adjustment measure that reduces life expectancy, reflecting the existence of chronic conditions causing impairment, disability, and/or handicap as assessed from health surveys, hospital discharge data, or others.

Total costs

All costs incurred in producing a set of services.