New Analysis Shows Diabetes Costs Employers $245 Billion Annually

17 Mar, 2023 F.J. Thomas


Sarasota, FL ( – When it comes to weight, there are basically two camps of thinking. One is that metabolic issues that cause weight gain such as diabetes is a disease. The other belief is that weight and accompanying issues are simply a matter of discipline, that if you eat right and exercise you will stay healthy. 

As with many things in life, the truth about weight and health can sometimes lie somewhere in the middle. That said, what is irrefutable is that the U.S. is seeing an unprecedented increase in not only obesity, but in the number of adults that have multiple chronic diseases such as diabetes. In fact, diabetes is the 7th leading cause of death in the U.S., according to the CDC. More than 37 million people have diabetes, and additionally 1 in 5 don’t know they have the condition. 

Diabetes is a chronic health condition in which the body does not make enough insulin or can’t use the insulin that it does make to regulate sugar levels in the body. As a result, the high levels of sugar can damage the heart, the eyes, and kidneys. In extreme cases, blood flow can be compromised and nerves can be damaged, resulting in neuropathy and amputation of limbs. Additionally, diabetes can impede the healing process, ultimately affecting outcomes in surgeries. It can also greatly influence weight gain. 

There are three basic types of diabetes. Type 1, usually diagnosed in children through young adults, and believed to be the result of an autoimmune reaction. Type 1 accounts for 5 to 10 percent of people with diabetes. Lifelong daily use of insulin is required for type 1 and there is no cure. Type 2 usually develops over years and can be managed with healthy eating and exercise, and losing weight. Gestational diabetes develops in pregnant women. Gestational diabetes does not only increase the risk of type 2 later on in life for the mother and child, but it also increases the obesity in children. 

Prediabetes is when the sugar levels are high but not high enough to be diagnosed with type 2 diabetes. In the U.S. around 96 million adults have prediabetes. Around 80 percent of adults with prediabetes are unaware of their condition. If left unchecked, prediabetes can easily progress into type 2 diabetes. 

According to recent data from direct healthcare provider Nomi Health, diabetes costs employers around $245 billion annually. Around $175 billion is spent every year on medical and pharmacy costs. The indirect costs such as employee absenteeism, reduced productivity and diabetes-related disability are approximately $70 billion. The analyst estimate that a new diabetes diagnosis occurs every 21 seconds. 

With an increase in the number of chronic diseases, the researchers from Nomi estimate that the cost of care for a diabetic is increasing at double that of a non-diabetic. The rate of increase for diabetic care has steadily increased 20 percent every year resulting in an average cost of $20,000 per member in 2020 to 2021. Additionally, employers spent 252 percent more for diabetics with kidney disease in the same period, with an average cost of $68,325 per member. 

Employers aren’t the only ones to feel the brunt of the disease. In fact according to the report, diabetics pay 240 percent more out of pocket than non-diabetics for medical bills, and around 450 percent more for medications. 

“Diabetes is an urgent and costly epidemic that is only getting worse. As diagnoses skyrocket, so do the associated costs for both employers and patients. We must turn these spend insights into meaningful action,” Nomi Health Co-founder and CEO Mark Newman said. “From making insulin covered as a pre-deductible preventive medication to supporting diabetic employees with tools to help manage their disease, employers can help bend the cost curve and make a real impact.”

Nomi utilized Artemis benefit analytic platform, which they acquired last year, to analyze data from their Trends in Spend Tracker. The analysts reviewed over a half million actual claims to determine the cost trending associated with diabetes. 


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    About The Author

    • F.J. Thomas

      F.J. Thomas has worked in healthcare business for more than fifteen years in Tennessee. Her experience as a contract appeals analyst has given her an intimate grasp of the inner workings of both the provider and insurance world. Knowing first hand that the industry is constantly changing, she strives to find resources and information you can use.

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