A new tool helps companies estimate costs and possible savings for diabetes care
Research Activities, April 2009
Developed by the Agency for Healthcare Research and Quality (AHRQ), the Diabetes Cost Calculator is designed to help companies better estimate how they can save money while still paying health care costs for employees who have diabetes.
Diabetes is one of the most common chronic conditions in the United States. More than 23 million Americans have diabetes and, of those, approximately 14 million are working-age adults. The direct medical costs for treating diabetes are $116 billion, not including the costs for people with undiagnosed diabetes, with an additional $58 billion spent for indirect costs such as missed workdays, according to data from the American Diabetes Association. In addition, according to AHRQ data, diabetes accounted for more than 70 million outpatient visits in the United States, a 96 percent increase between 1996 and 2006.
AHRQ'S Diabetes Cost Calculator will allow companies to estimate bottom-line costs for diabetes care and calculate the savings that could be realized through better management of the disease. The tool makes these estimates based on the type, location, and size of a business and other factors including:
- Number of people with diabetes.
- Annual diabetes-related medical costs.
- Annual diabetes-related productivity costs.
- Potential savings associated with better management of diabetes.
The potential savings can be adjusted based on the percentage of employees who are likely to be helped. For example, a 1 percent reduction in average hemoglobin levels, which help determine how well blood sugar has been controlled, could save an Illinois manufacturing company with 500 employees over $40,000 a year in direct health care expenses and lost productivity costs among its employees and dependents with diabetes. In another example, that same reduction in hemoglobin levels for a college in Mississippi with 1,000 employees could save over $100,000 by helping its employees and their dependents with diabetes better manage their diabetes care. AHRQ developed the Diabetes Cost Calculator in response to a request from the Mid-Atlantic Business Group on Health and in partnership with the National Business Coalition on Health.
To view the Diabetes Cost Calculator, go to http://www.ahrq.gov/populations/diabcostcalc.