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The Costs of Diabetes - And the Savings of Workplace Wellness Programs

Bethesda, MD - Two articles published today by Health Affairs analyze the potential success of strategies to curtail medical spending in the U.S.  One study evaluates the evidence on workplace wellness programs and finds that the medical savings outweigh the costs for employers.  The second breaks new ground by developing a Cost of Diabetes Model and assesses the national economic burden of that disease to have reached $218 billion.

Workplace Wellness Programs Can Generate Savings
By Katherine Baicker, David Cutler, and Zirui Song
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.2009.0626

Katherine Baicker is a professor of health economics at Harvard University's School of Public Health; David Cutler is an economics professor at Harvard University; and Zirui Song is a doctoral candidate at Harvard Medical School.

With investment in disease prevention and wellness viewed as promising ways to achieve better heath and lower medical costs, workplace-based wellness programs are much touted in policy discussions.  The authors conducted a critical review of more than 100 existing peer-reviewed analyses of employee wellness programs, many of which use health risk assessments and focus on obesity and smoking, the top two causes of preventable death in the United States. The authors found that these initiatives save employers money both through reduced health costs for their employees and reduced absenteeism.  For every dollar spent on wellness programs, about $3.27 was saved in medical costs and $2.37 was saved in reduced workplace absenteeism. "Encouraging (or even subsidizing) such programs...may have broad political appeal, perhaps in part because they operate with less direct government oversight and fewer government dollars," observed Katherine Baicker.  "They hold the promise of slowing health care cost growth without the specter of rationing care."

The Economic Burden of Diabetes  

By Timothy Dall, Yiduo Zhang, Yaozhu J. Chen, William W. Quick, Wenya G. Yang, and Jeanene Fogli
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.2009.0155

Timothy M. Dall is managing director, applied economics, and Yidou Zhang, Yaozhu J. Chen and Wenya G. Yang are senior associates, all at the Lewin Group; William W. Quick is executive medical director and Jeanene Fogli is director, Endocrinology, Metabolic Disease, and Cardiology, Medical and Scientific Affairs, both at i3 Research.

According to the American Diabetes Association, nearly 17.5 million people were diagnosed with that disease in 2007; another 6.3 million adults are living with undiagnosed diabetes.  The authors have created a Cost of Diabetes Model that combines information from peer-reviewed literature, analyses of national survey and medical claims databases, and government statistics. For 2007, they calculated that the national economic burden of diabetes and pre-diabetes was a staggering $218 billion, which included $153 billion in medical costs and $65 billion in reduced productivity.  This translated to approximately $700 per person. The $65 billion estimated productivity loss associated with diabetes came from higher levels of absenteeism, working at less than capacity, and early mortality.  In addition, the authors note that the Diabetes Prevention Program study shows that lifestyle changes (diet and exercise) can help delay or prevent the onset of diabetes.  The authors conclude, "The burden of diabetes to society is even higher when one considers intangible costs from reduced quality of life...underscore[ing] the urgency to better understand the cost-mitigation potential of prevention and treatment strategies."

 

ABOUT HEALTH AFFAIRS:

Health Affairs, published by Project HOPE, is the leading journal of health policy. Beginning in January 2010, the peer-reviewed journal appears each month in print, with additional Web First papers published weekly at http://www.healthaffairs.org/. The full text of each Health Affairs Web First paper is available free of charge to all Web-site visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund.

 

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