OBJECTIVE—Diabetes is the fifth leading cause of death by disease in the U.S. Diabetes also contributes to higher rates of morbidity—people with diabetes are at higher risk for heart disease, blindness, kidney failure, extremity amputations, and other chronic conditions. The objectives of this study were 1) to estimate the direct medical and indirect productivity-related costs attributable to diabetes and 2) to calculate and compare the total and per capita medical expenditures for people with and without diabetes.

RESEARCH DESIGN AND METHODS—Medical expenditures were estimated for the U.S. population with and without diabetes in 2002 by sex, age, race/ethnicity, type of medical condition, and health care setting. Health care use and total health care expenditures attributable to diabetes were estimated using etiological fractions, calculated based on national health care survey data. The value of lost productivity attributable to diabetes was also estimated based on estimates of lost workdays, restricted activity days, prevalence of permanent disability, and mortality attributable to diabetes.

RESULTS—Direct medical and indirect expenditures attributable to diabetes in 2002 were estimated at $132 billion. Direct medical expenditures alone totaled $91.8 billion and comprised $23.2 billion for diabetes care, $24.6 billion for chronic complications attributable to diabetes, and $44.1 billion for excess prevalence of general medical conditions. Inpatient days (43.9%), nursing home care (15.1%), and office visits (10.9%) constituted the major expenditure groups by service settings. In addition, 51.8% of direct medical expenditures were incurred by people >65 years old. Attributable indirect expenditures resulting from lost workdays, restricted activity days, mortality, and permanent disability due to diabetes totaled $39.8 billion. U.S. health expenditures for the health care components included in the study totaled $865 billion, of which $160 billion was incurred by people with diabetes. Per capita medical expenditures totaled $13,243 for people with diabetes and $2,560 for people without diabetes. When adjusting for differences in age, sex, and race/ethnicity between the population with and without diabetes, people with diabetes had medical expenditures that were ∼2.4 times higher than expenditures that would be incurred by the same group in the absence of diabetes.

CONCLUSIONS—The estimated $132 billion cost likely underestimates the true burden of diabetes because it omits intangibles, such as pain and suffering, care provided by nonpaid caregivers, and several areas of health care spending where people with diabetes probably use services at higher rates than people without diabetes (e.g., dental care, optometry care, and the use of licensed dietitians). In addition, the cost estimate excludes undiagnosed cases of diabetes. Health care spending in 2002 for people with diabetes is more than double what spending would be without diabetes. Diabetes imposes a substantial cost burden to society and, in particular, to those individuals with diabetes and their families. Eliminating or reducing the health problems caused by diabetes through factors such as better access to preventive care, more widespread diagnosis, more intensive disease management, and the advent of new medical technologies could significantly improve the quality of life for people with diabetes and their families while at the same time potentially reducing national expenditures for health care services and increasing productivity in the U.S. economy.

Diabetes cost the U.S. an estimated $132 billion in 2002 in medical expenditures and lost productivity. Across the components of the health care system included in this study, per capita direct medical expenditures for the ∼12.1 million people diagnosed with diabetes in the U.S. are more than double the expenditures of otherwise similar people without diabetes. A total of $92 billion in direct medical expenditures are attributable to diabetes. Diabetes is associated with higher rates of lost work time, disability, and premature mortality. The resulting economic loss to the U.S. economy in 2002 alone is estimated to be $40 billion. This cost estimate documents the extraordinary national economic burden of diabetes. Even so, such estimates do not account for the losses attributable to pain and suffering incurred by people with diabetes, as well as to families and friends of those with diabetes.

The prevalence of diabetes increases with age and is higher among certain racial and ethnic minority populations. The growth, aging, and increasing racial and ethnic diversity of the U.S. population portends a substantial increase in the size of the population with diabetes. If diabetes prevalence rates remained constant over time, controlling for age, sex, race, and ethnicity, then based on Census Bureau population projections (1), the number of people diagnosed with diabetes could increase to ∼14.5 million by 2010 and to 17.4 million by 2020. The projected increase in the number of people with diabetes suggests that the annual cost in 2002 dollars of diabetes could rise to an estimated $156 billion by 2010 and to $192 billion by 2020. The actual cost in future years could be higher if the cost of health care outpaces the overall cost of living, or if the growing problem of obesity increases the prevalence of type 2 diabetes.

This national cost estimate represents an increase from estimates reported in earlier studies, reflecting the growing prevalence of diabetes in the U.S. and the increasing cost of health care services. Comparison of national cost estimates across studies is complicated by differences in the cost components included in each study, the continuing growth and aging of the U.S. population, and changes over time in the cost of health care services. The previous American Diabetes Association (ADA) study on the cost of diabetes estimated the national cost of diabetes in 1997 to be $98 billion (2).

Documenting the national economic impact of diabetes can inform priority setting in health care research and delivery, including prevention, diagnosis, and treatment of diabetes.

Unless specifically noted, this study uses prevalence-based cost-of-illness methods similar to the approach used by ADA (2,3). The following is an overview of the research design and methods used for this study, a discussion of important findings, and a summary of the implications of these findings, limitations of the study, and suggestions for future research.

The approach used to estimate the cost of diabetes follows, to the extent possible, the approach used in previous studies of the cost of diabetes and, in particular, ADA’s previous cost estimate (2). This approach has found acceptance in the general cost-of-disease literature. Deviations from the approach used previously by ADA (2) are noted and occur in some instances when the exact approach used in the earlier study could not be determined or when new data sources and analytical tools enable improvements to past approaches. Below is a summary of the approach used to estimate 1) the size of the population with diabetes, 2) health care use and total health care expenditures attributable to diabetes, and 3) the value of lost productivity attributable to diabetes.

Estimating the size of the population with diabetes

This national cost estimate is based on an estimate of 12.1 million people in the U.S. in 2002 who have been diagnosed with diabetes. This estimate of the magnitude of the diabetic population represents an increase of 1 million (9%) from year 2000 estimates and an increase of 1.8 million (17%) from year 1997 estimates. Based on results from the 2000 Census, it appears that during the period of 1990–2000, the U.S. population grew faster than projected by the Census Bureau. (The actual U.S. population in 2000, based on the 2000 Census, exceeded the Census Bureau’s pre-2000 projections of the U.S. population in 2000 by ∼6.8 million individuals [or 2.4% of the total population]. One implication is that pre-2000 estimates of the number of people with diabetes in the U.S. were biased downward because the sample weights used in surveys such as the National Health Interview Survey (NHIS) were based on Census Bureau population estimates.) It is based on self-reported prevalence of diabetes only; therefore, it does not account for the considerable number of people with diabetes who are unaware that they have the disease or do not report it. Indeed, the ADA estimates that as many as one-third of people with diabetes are unaware that they have the disease. Further, this estimate excludes women with gestational diabetes.

This cost estimate is based on prevalence rates derived from the combined 1998, 1999, and 2000 files of the NHIS. Combining 3 years’ worth of NHIS files created larger samples with which to estimate separate prevalence rates for each of 12 age-groups by sex and by four race/ethnicity designations. (The 12 age categories are 0–17, 18–24, 25–29, 30–34, 35–39, 40–44, 45–49, 50–54, 55–59, 60–64, 65–69, and ≥70 years. The four race/ethnicity categories are Hispanic, non-Hispanic white, non-Hispanic black, and non-Hispanic other.)

The NHIS collects data on ∼43,000 households of more than 106,000 people annually. The combined files for 1998–2000 create a sample of more than 320,000 people. People with diabetes are identified using the survey question that asks whether the survey participant has been told by a doctor that he or she has diabetes (other than gestational diabetes). Responses to the question are coded as “yes,” “no,” “borderline,” and “no response.” People responding “yes” are coded as having diabetes. People responding “borderline” are not counted as having diabetes in this analysis.

As shown in Figs. 1 and 2, diabetes prevalence rates increase with age. Prevalence rates vary substantially by race and ethnicity. They are higher for Hispanics and non-Hispanic blacks than for non-Hispanic whites. Furthermore, the rates for other populations (i.e., Asian Americans, American Indians, Pacific Islanders, etc.) are similar to those of non-Hispanic whites among females but are higher than the rates for non-Hispanic whites among males.

Applying these prevalence rates to the size of the U.S. population in each demographic group, as determined by the 2000 Census and projected to 2002 using Census Bureau estimates, produced the estimate of 12.1 million people diagnosed with diabetes.

If diabetes prevalence rates within a demographic group remained constant over time, then, based on Census Bureau population projections (1), the size of the population with diabetes will grow to ∼14.5 million by 2010 and to 17.4 million by 2020 (Table 1). Whereas the U.S. population is projected to increase by ∼17% between 2002 and 2020, the size of the population diagnosed with diabetes is projected to increase by 44% due, in large part, to the increase in the size of the elderly population and the increasing racial and ethnic diversity of the U.S. population. Changing demographic characteristics will contribute to an increase in the overall prevalence rate for diagnosed cases of diabetes from 4.2% in 2002 to a projected 5.2% in 2020.

The number of Hispanics and other minority populations diagnosed with diabetes is projected to double between 2002 and 2020, whereas the number of non-Hispanic blacks and non-Hispanic whites diagnosed with diabetes is projected to increase by 50 and 27%, respectively.

Although there is no projected increase in the total number of people under age 45 years diagnosed with diabetes between 2002 and 2020, the projected increases for populations aged 45–64 and ≥65 years are 48 and 56%, respectively.

Health resource use attributable to diabetes

In addition to receiving health care services for medical conditions directly related to diabetes, people with diabetes are at greater risk for neurological disease, peripheral vascular disease, cardiovascular disease, renal disease, endocrine/metabolic complications, ophthalmic disease, and other chronic complications compared with individuals without diabetes. A portion of health care use associated with these medical conditions is attributable to diabetes.

The general principle for estimating the cost of diabetes in this analysis is straightforward. Health care use attributable to diabetes is determined by a comparison of the health care use patterns of individuals with and without diabetes, controlling for differences between the two populations in demographic characteristics that are potentially correlated with the use of health care services (e.g., age, sex, and race/ethnicity).

Three limitations of the source data, however, increase the complexity of the analysis design and calculations. These limitations are 1) absence of a single data source for all estimates, 2) small sample sizes for some items of interest, and 3) underreporting of diabetes as a comorbidity. The implications of these limitations and how we have addressed these limitations are summarized below.

  • No single source of data. Because no single data source representative of the U.S. population contains all of the information necessary to estimate the health care cost of diabetes, it is necessary to draw upon multiple data sources. Among some of these sources are differences in definitions for identifying people with diabetes and differences in levels of detail to categorize types of patient visits. One source of complete data required to estimate direct medical expenditures attributable to diabetes is claims from Group Health of Puget Sound (GHPS). This data source contains a diabetic flag in a disease registry, but the GHPS sample might not be representative of health care use patterns and costs for the entire U.S. population. The Medical Expenditure Panel Survey (MEPS) is closest to a single, nationally representative source of data in that it 1) identifies people with diabetes-related conditions, 2) measures health care use, and 3) provides cost information. However, MEPS is limited by the small sample size.

  • Small sample sizes for some items of interests. Disaggregating the U.S. population by age, sex, race, and ethnicity requires relatively large sample sizes to obtain reliable estimates of differences in use patterns by diabetes status when analyzing specific medical conditions associated with diabetes. The number of identified people with diabetes who participated in the most recent MEPS is insufficient to obtain reliable estimates of health care use for some chronic complications associated with diabetes and in some health care settings. The use of alternative data sources, such as the National Ambulatory Medical Care Survey, increases sample size but is hindered by the third major limitation—underreporting of diabetes as a comorbidity.

  • Underreporting of diabetes as a comorbidity. The literature reports that there is significant underreporting of diabetes as a comorbidity in health care databases. Unless the attending physician lists diabetes as a comorbidity on the patient’s medical record, the health care services provided to that patient are not linked to diabetes. Sources such as GHPS and MEPS allow one to identify whether a person has been diagnosed with diabetes but, as discussed above, their representativeness is often questioned (in the case of GHPS) or they have insufficient sample size.

These data limitations are addressed as follows. First, the study uses an eclectic approach that combines findings from empirical analysis of multiple data sources with findings reported in the literature. Second, for several national surveys completed annually, multiple years’ worth of data are pooled to increase sample size. Third, similar to previous studies, this study uses an attributable risk methodology to estimate use of health care services that can be attributed to diabetes.

The attributable risk methodology estimates the odds of having a particular medical condition by diabetes status, then combines these odds with estimates of the proportion of the population with diabetes to calculate an etiological fraction. The etiological fraction represents an estimate of the proportion of health care services for a particular medical condition that is attributable to diabetes. The etiological fraction is calculated based on the following:

\[E_{i}\ {=}\ \frac{P\ {\times}\ (R_{i}\ {-}\ 1)}{P\ {\times}\ (R_{i}\ {-}\ 1)\ {+}\ 1}\]

where Ei is the fraction of health care use for medical condition “i” that is attributable to diabetes, P represents the diabetes prevalence rate, and Ri is the relative risk of disease i (i.e., the odds ratio) for people with diabetes compared with people without diabetes.

Combining odds ratios estimated using the MEPS with diabetes prevalence rates estimated using the NHIS creates separate etiological fractions for the medical conditions listed in Fig. 3 for each demographic group modeled. This figure combines etiological fractions across the 12 age-groups by race/ethnicity and sex to present etiological fractions for the population aged <45, 45–64, and ≥65 years. The etiological fractions vary substantially by age to reflect the changing prevalence of diabetes and differences in the prevalence of specific medical conditions by age. For example, for the populations aged <45, 45–64, and ≥65 years, the proportions of all health care use associated with neurological disease that is attributable to diabetes are 6, 10, and 5%, respectively. The medical condition with the highest etiological fractions is cardiovascular disease, where the proportions of all health care visits attributable to diabetes for individuals aged <45, 45–64, and ≥65 years are 16, 20, and 17%, respectively.

Although not reported here, the etiological fractions vary substantially by race and ethnicity, with the fractions generally higher for Hispanics and non-whites compared with non-Hispanic whites. This finding is consistent with past research that shows ethnic disparities in both diabetes prevalence rates and the rates of diabetic complications (4).

Table 2 summarizes the data sources used to analyze each component of the cost analysis and summarizes the unit cost estimates. Sources of health care use data include the 1998–2000 files of the National Ambulatory Medical Care Survey, the 1998–2000 files of the National Hospital Ambulatory Medical Care Survey, the 1999 National Inpatient Sample, the 1999 National Nursing Home Survey, and the 1998 and 2000 files of the National Home and Hospice Care Survey.

For each of these files, the primary diagnosis is used to classify the health care visit (or inpatient day) into one of nine medical condition classifications: 1) diabetes without complications, 2) one of the seven chronic medical conditions above (i.e., neurological disease, peripheral vascular disease, cardiovascular disease, renal disease, endocrine/metabolic complications, ophthalmic disease, and other chronic complications), or 3) neither 1) nor 2), in which case the visit is classified as a “general medical condition.” (See the appendix for a list of diagnosis codes used to categorize visits and hospital inpatient days by medical condition.)

Health care use rates for each of the nine conditions in each health delivery setting are estimated by patient age, sex, and race/ethnicity. Combining these use rates with etiological fractions and estimates of population size for each demographic group produces national estimates of health care use attributable to diabetes for each medical condition.

The 1998 MEPS is the primary source for most estimates of the per-unit price of health care services. Price estimates are based on actual payment for services, not charges. Price estimates from other sources are used when such information is readily available for more recent years or when price estimates from the MEPS appear unreliable (e.g., because of small sample sizes in the MEPS). All price estimates for health care services are adjusted to 2002 dollars using the medical component of the consumer price index. The unit prices represent averages across all patients irrespective of diabetes status or reason for visit (neonatal inpatient stays were omitted from the calculation of average cost per day). To the extent that the unit price is higher when diabetes is a comorbidity, or that inpatient days and outpatient visits tend to be more expensive for the medical complications associated with diabetes, the average unit cost might underrepresent the true unit cost for services attributable to diabetes.

Estimates of the average annual cost of supplies for people using insulin and oral agents were calculated using cost data from The Source Prescription Audit, the 2002 Red Book (13), pharmaceutical companies, and suppliers of devices used by people taking insulin. Based on prevalence rates computed using the combined 1998–2000 files of NHIS and estimates of the population in 2002, the estimated number of people using oral agents for diabetes and the estimated number of people using insulin are 7.5 and 3.9 million, respectively. The percentage of people using insulin and oral agents varies substantially by age, reflecting the increasing proportion of cases involving type 2 diabetes among the population with diabetes in older age brackets. Not all people with diabetes use either insulin or oral agents, especially among the younger age brackets.

Productivity foregone

People with diabetes are at greater risk of temporary incapacity (defined as lost workdays and bed days), permanent disability, and premature mortality. The pecuniary value of lost productivity is calculated based on the average earnings of the person whose productivity is foregone. Bureau of Labor Statistics (BLS) estimates of year 2001 annual earnings by age and sex for the civilian noninstitutional population are used to estimate the average cost per day of missing work, the average cost per year of permanent disability, and the loss of expected lifetime earnings resulting from premature mortality (19,20). Earnings estimates for 2001 are inflated to 2002 dollars using the overall consumer price index.

Lost workdays and bed days

The economic impact of temporary incapacity due to diabetes can be measured by both workdays lost and number of bed days, because both capture physical limitation due to diabetes that results in lost productivity. These data are obtained from the NHIS, in which respondents report workdays lost and bed days during the previous year due to illness. Lost workdays are defined as days in which a person misses work at a job or business because of diabetes or diabetes-related injury (excluding maternity leave). Bed days are defined as days in which a person is kept in bed more than half of the day because of diabetes or diabetes-related injury (including days while an overnight patient at a hospital). Lost workdays are subtracted from bed days to prevent overcounting if a person has both a lost workday and a bed day.

An estimate of workdays lost due to diabetes is found by comparing average days lost by diabetes status for each age-group and by sex. Controlling for age, men with diabetes have 3.1 more lost workdays and 7.9 more bed days per year, on average, than men without diabetes. Women with diabetes had 0.6 more lost workdays and 8.1 more bed days, on average, than women without diabetes. However, these estimates likely underestimate lost workdays to the extent that men and women with diabetes are less likely to be in the labor force than men and women without diabetes.

The pecuniary value of a workday is defined as average earnings for the person incurring the lost workday. Average earnings differ by age-group and sex, but the average earnings for people with diabetes who are between the ages of 18 and 64 is estimated at $168 per day. Following the approach used by Yassin et al. (21), the cost per bed day is defined as 40% of the cost of a lost workday.

Disability

People with diabetes are at greater risk for amputations, loss of vision, and other physical problems that can limit their earning potential or preclude them from gainful employment. Ideally, estimating lost earnings would entail comparing the average earnings of all people with diabetes to the average earnings of people without diabetes, controlling for differences in demographic characteristics and other factors that affect earning potential but that are unrelated to diabetes. A comparison of gross average earnings would capture both differences in labor force participation patterns and the possibility that an individual with diabetes will be in a lower-paying job. Unfortunately, there are no recent data that provide reliable information with which to estimate average earnings by diabetes status while controlling for demographic and other factors affecting earning potential.

Consequently, following the approach previously used by the ADA (2), data from the Social Security Administration are used to estimate the prevalence of total number of permanently disabled workers attributable to diabetes. The Social Security Disability Insurance (SSDI) program provides benefits to disabled workers and their spouses or children (whether or not they are disabled), retired workers and their dependent family members, and survivors of deceased workers. Individuals aged 18–64 years who receive SSDI benefits are included in the estimate of lost productivity attributed to diabetes-related disability. The Social Security Administration Office of Research, Evaluation, and Statistics compiles information on the total number of people with disabilities by specified condition. Therefore, using information on the number of disabled workers as a percentage of the total number of beneficiaries from Table 1 in the Annual Statistical Report on the Social Security Disability Insurance Program, 2000, we adjusted the Social Security Administration data to reflect the number of disabled workers by specified condition.

As of January 2002, there were an estimated 122,000 people aged 18–64 years receiving SSDI benefits where diabetes is listed as the primary basis of disability and another 109,000 people aged 18–64 years receiving SSDI benefits where diabetes is listed as the secondary basis of disability. This study attributes to diabetes 100% of the cases where diabetes is the primary basis of disability and 50% of the cases where diabetes is the secondary basis of disability. The number of cases where diabetes is a contributing factor to the disability, but where diabetes is not listed as the primary or secondary diagnosis, was unavailable. Also, the number of unemployed people with diabetes who are not receiving SSDI but who would be employed in the absence of diabetes is unknown. An estimated 176,475 person-years of permanent disability in 2002 are attributable to diabetes. Each case of permanent disability results in an average lost earnings of $42,462 per year. The national cost estimate excludes the cost to family and friends caring for a person with permanent disabilities attributable to diabetes.

Mortality

Data from the 1998 Multiple Cause of Death File (22) were used to determine the total number of deaths attributable to diabetes. The file reports causes of death, along with economic, geographic, and demographic information for deaths of all U.S. citizens occurring within the U.S.

Mortality-related productivity costs are the estimated value of lost future earnings from paid market and unpaid household labor resulting from premature death due to diabetes or diabetes-related diseases. The estimated loss in annual earnings is based on estimates of the proportion of the population in the labor force, estimates of annual mean earnings from the BLS, and estimates of the mean value of housekeeping services. The estimated value of lost housekeeping services for individuals not in the labor force is 40% of average earnings for people of similar age and sex who are in the work force and 20% of annual earnings for individuals in the labor force. Estimates of the present value of lifetime future earnings are based on human capital methodology, which assumes that earnings reflect the contribution workers make to the value of goods and services and that the present value of expected future earnings is an estimate of the value of human capital (23). The mortality-related productivity loss estimate incorporates both the number and timing of premature deaths attributable to diabetes.

Using 2001 earnings estimates from the Bureau of Labor Statistics, we updated the present value of future earnings (PVFE) estimates from Haddix et al. (24). The PVFE for 2002, including unpaid household work, was estimated assuming a 4% real discount rate. The average PVFE estimate for all diabetes-attributed mortality cases is $116,928, although the actual cost estimate differs by age and sex.

Health resource use attributable to diabetes

From estimates of per capita health care use and the size of the population, by demographic group, this study estimates total health care use for each demographic group. Applying the etiological fractions for the corresponding demographic groups results in estimates of health resource use attributable to diabetes.

Table 3 shows estimated health care use by type of service aggregated into three broad age-groups. The attributable health care use due to diabetes is greatest for the population aged ≥65 years, despite this population having slightly fewer people with diabetes than the population aged 45–64 years. For instance, office-based physician encounters attributable to diabetes for people over age 65 years is more than double the office-based physician encounters for people between 45 and 64 years. Use of emergency department, home health, and hospice care services is also substantially higher for the population over age 65 years compared with the population between age 45 and 64 years and the population under age 45 years.

Tables 46 provide information on health care use attributable to diabetes by medical condition and type of service. Table 4 shows total use of services by type of medical condition attributable to diabetes, Table 5 shows each medical condition’s proportion of total use attributable to diabetes, and Table 6 shows the proportion of total U.S. use attributable to diabetes. Examination of these three tables reveals the following trends:

  • Most of the health care use attributable to diabetes is for the treatment of general medical conditions, i.e., visits or inpatient days where the primary diagnosis is neither diabetes nor one of the seven chronic complications analyzed. For example, 63% of hospital inpatient days attributable to diabetes fall under the category of general medical conditions.

  • Of the seven chronic complications analyzed, cardiovascular disease accounts for the largest proportion of health care use attributable to diabetes. For example, in 2002, an estimated 4 million hospital inpatient days were attributable to diabetes where the primary diagnosis is related to cardiovascular disease. This constitutes 24% of total hospital days attributable to diabetes and 19% of total U.S. inpatient days when the primary diagnosis was related to cardiovascular disease.

  • Diabetes accounts for a sizable increase in the use of health care services. An estimated 18% of home health visits in the U.S. are attributable to diabetes. Approximately 15% of nursing home services and 14% of hospice care services in the U.S. are attributable to diabetes.

Health care expenditures attributable to diabetes

Health care expenditures attributable to diabetes are those costs incurred by the population with diabetes above what would be expected if this population did not have diabetes. Of the estimated $91.8 billion in health care expenditures attributable to diabetes, $47.6 billion (52%) is for services provided to people ≥65 years of age. An estimated $31.6 billion (34%) is for services provided to people age 45–64 years, whereas the remaining $12.6 billion (14%) is for services provided to people under age 45 years (Table 7). Home and hospice care expenditures attributable to diabetes are incurred primarily by the population ≥65 years of age.

Table 8 shows estimates of attributable health care expenditures by medical condition and type of service. Expenditures for health care events with a primary diagnosis of uncomplicated diabetes and diabetes-related supplies are estimated to be $23.2 billion for 2002, which accounts for 25% of all health care attributable expenditures. At over $44 billion (or 48% of total attributable expenditures), general medical conditions comprise the largest component of expenditures attributable to diabetes. Together, the seven chronic conditions associated with diabetes account for the remaining 27% of attributable expenditures, with cardiovascular disease being the single largest contributor.

Total U.S. expenditures for health care services analyzed in this study are estimated at $865 billion (Table 9), which is 58% of the total U.S. health care expenditures of approximately $1.5 trillion in 2002 (25). (Centers for Medicare and Medicaid Services [CMMS] estimated national health care expenditures of $1.3 trillion in the year 2000, which is adjusted to 2002 using CMMS’s projection of an 8% increase in annual cost of health care services in the U.S. resulting from rising medical costs and an increased use of services.) Cost components not included in this analysis include such things as school-based and public health clinics, dental care, podiatric care, optometry care and vision products (with the exception of ophthalmology services, which are included), research, over-the-counter medicines, and other areas. CMMS estimates expenditures in 2000 to be $60 billion for dental care, $44 billion for government public health activities, and $44 billion for investment (i.e., research and construction). Martin et al. (26) estimate expenditures in 1998 to be $16 billion for vision products and other medical durables (e.g., hearing aides, medical equipment rentals, etc.) and $122 billion for over-the-counter medicine and sundries.

This analysis focuses on those areas where health care use patterns have been shown to differ by diabetes status. Therefore, it is unknown what portion of the remaining 42% of U.S. health care costs can be attributed to diabetes. Components of the health care system not analyzed in this study, but where health care use patterns might differ by diabetes status include dentistry, podiatry, optometry, and licensed dietitians. It is known, for example, that people with diabetes are at higher risk for periodontal disease than the general population, but these data are not incorporated here. Thus, it is likely that this estimate of health care costs attributable to diabetes underestimates the true amount.

Of the health care components analyzed, more than $1 in $10 spent on health care services in the U.S. is attributable to diabetes. Expenditures attributable to diabetes are greatest for hospital inpatient stays ($40.3 billion), followed by nursing home care ($13.9 billion) and visits to physician offices ($10 billion). The cost of oral agents to lower blood glucose, insulin, and insulin-related supplies totaled approximately $12 billion. Diabetes is responsible for a substantial proportion of total U.S. expenditures for certain health care services, e.g., 18% of home health expenditures, 15% of nursing home expenditures, and 14% of hospice care expenditures.

The estimated cost to provide health care services to people with diabetes exceeded $160 billion in 2002 (for those components of the health care system included in this study). This includes costs attributable to diabetes as well as non-diabetes-related costs. Although people with diagnosed diabetes comprise only slightly more than 4% of the U.S. population, of the components of the health care system included in this study, almost $1 of every $5 spent on health care in the U.S. is for a person with diabetes.

Because the prevalence of type 2 diabetes increases with age, the population with diabetes tends to be older compared with the population without diabetes. Consequently, people with diabetes incur a substantial proportion of long-term care services. For example, more than $1 in $4 spent for nursing home, home health, and hospice care is spent to provide services to someone with diabetes.

Dividing health care expenditures by the size of the population with and without diabetes creates estimates of per capita expenditures (Table 10). On average, people with diabetes incurred approximately $13,243 in health care expenditures in 2002 across the health care components included in this study. People without diabetes incurred approximately $2,560 in expenditures, for a ratio of ∼5 to 1. This comparison is slightly higher than ratios estimated by ADA (2) and Rubin et al. (27), who found a fourfold difference in average annual health care expenditures for people with diabetes compared with others. However, this ratio somewhat overstates the impact of diabetes on per capita costs because the demographic composition of the population with diabetes differs substantially from the demographic composition of the population without diabetes. The population with diabetes tends to be older, on average, than the population without diabetes.

We derived an age-adjusted annual per capita expenditure of $5,642 to control for differences in demographic characteristics of the population with diabetes compared with the nondiabetic population, yielding a ratio of ∼2.4-to-1 for health care expenditures among people with and without diabetes. This ratio prevails, roughly, across cost components, ranging from a high of 2.7 to 1 for home health services to a low of 2 to 1 for emergency services.

Indirect costs attributable to diabetes

At an annual cost of $7.5 billion, more than 176,000 cases of permanent disability in 2002 are attributable to diabetes (Table 11). This cost estimate represents a sizeable decrease from the cost of disability in the 1998 report (2), which used the present value of lost lifetime earnings to estimate the cost of disability. We use average annual lost earnings, estimated at $42,462 per case, to represent the productivity loss associated with the disability. Disability cases where diabetes is listed as the primary cause accounts for more than two-thirds of total cases attributed to diabetes. Cases where cardiovascular disease is listed as the primary cause of disability accounts for 7% of all cases attributed to diabetes.

The estimated number of deaths attributable to diabetes is derived from instances where the primary cause of death is diabetes, renal disease, cerebrovascular disease, or cardiovascular disease. The etiological fractions used to estimate health care use attributable to diabetes are applied to the estimates of the number of deaths—by age, sex, race/ethnicity, and primary cause of death—to estimate deaths attributable to diabetes. Estimated lost years of life are based on comparing timing of premature death to life expectancy (28).

In 2002, an estimated 186,000 deaths were attributable to diabetes (Table 12). An estimated 19% of all deaths for which cardiovascular disease is listed as the primary cause of death are attributed to diabetes, and this accounts for 108,000 (58%) of all deaths attributable to diabetes.

This finding is consistent with the major findings of a study by DeStefano and Newman (29), which finds that coronary heart disease is the leading cause of mortality among people with diabetes. DeStefano and Newman find that for younger people (i.e., men under age 45 years and women under age 55 years), people with diabetes had a 13-fold greater risk of coronary heat disease mortality than people without diabetes when controlling for other coronary heart disease risk factors. The Centers for Disease Control and Prevention reports that adults with diabetes have heart death rates that are two to four times higher than those of adults without diabetes (30). An estimated 2,000 deaths with renal disease as the primary cause are attributed to diabetes. Geiss et al. (31) found that age-adjusted renal mortality rates for people with diabetes are more than 2.5 times the rates for people without diabetes.

National cost of diabetes

Combining estimates of health care expenditures and productivity losses attributable to diabetes yields an estimate of the national cost of diabetes (Table 13). In 2002, the estimated cost of diabetes was approximately $132 billion, of which approximately $92 billion (70%) was additional health care expenditures and $40 billion (30%) was lost productivity due to disability and early mortality. Institutional care (i.e., hospital inpatient care and nursing home care) was the largest component of health care costs and comprised 41% of the national cost of diabetes. Outpatient care, at $20 billion in 2002, comprised 15% of the national cost of diabetes. At $17.5 billion, the cost of outpatient medication and supplies comprised 13% of the national cost of diabetes.

As the U.S. population grows in size, ages, and becomes more racially and ethnically diverse, the size of the population diagnosed with diabetes will grow, even if current patterns in diabetes prevalence remain unchanged. Using current diabetes prevalence rates applied to Census Bureau population projections, the national cost of diabetes could grow to $156 billion by 2010 (in 2002 dollars) and to $192 billion by 2020 (Fig. 4). Direct medical costs could increase from $92 billion in 2002 to $138 billion in 2020, whereas indirect costs from lost productivity could increase from $40 billion in 2002 to $54 billion in 2020. The actual future cost of diabetes is likely to be substantially higher than these projected amounts if the prevalence of diabetes continues to grow—especially for type 2 diabetes, which is correlated with the growing problem of obesity in the U.S.—even after controlling for changing demographic characteristics.

Health care spending in 2002 for people with diabetes is more than double what spending would be without diabetes. This costs the U.S. economy an estimated $92 billion in higher health care expenditures. Lost productivity attributed to diabetes resulting from lost workdays, lost home services, permanent disability, and premature mortality is estimated at $40 billion. Compared to people without diabetes, people with diabetes and their families bear a disproportionate share of health care expenditures.

This cost estimate is conservative and likely understates the true burden of diabetes for the following reasons:

  • This estimate omits the cost of intangibles such as pain and suffering, the cost of care provided by informal caregivers, and administrative costs of insurers.

  • The cost components included in this analysis account for only 58% of the estimated $1.5 trillion in U.S. health care expenditures in 2002. For example, over-the-counter medications and sundries, which Martin et al. (26) estimate at $122 billion in 1998, are omitted from the cost estimate. Whereas the areas of health care expenditures analyzed are those where health care use patterns have been shown to differ by diabetes status, there are several areas omitted from the analysis where people with diabetes probably use services at higher rates than people without diabetes, e.g., dental care, optometry care, and the use of licensed dietitians.

  • The average price per health service used could differ by diabetes status. If health care conditions classified as “general medical conditions” (e.g., pneumonia) are more severe for people with diabetes than without diabetes, then the cost estimate would be too low. The study controls for differences in health care use attributable to diabetes, e.g., the number of hospital inpatient days, but does not control for differences in mix of health care professionals seen (e.g., if people with diabetes are more likely to see a specialist instead of a primary care physician).

  • In this study, people with undiagnosed diabetes are categorized with the nondiabetic population. If per capita use of health care services is greater for people with undiagnosed diabetes than for people without diabetes, the health care costs attributable to diabetes will be underestimated.

Future research might investigate the cost of diabetes in these areas omitted from the present analysis.

The estimated national cost of diabetes was calculated using prevalence-based cost-of-illness methods with data from 1998 through 2002. For some components of the cost estimate (e.g., the cost of supplies), multiple data sources were analyzed and the results were compared to ensure robust results. One change from the approach used in ADA’s 1998 study was to combine multiple years of national health use databases to increase sample size and allow for finer disaggregation of the U.S. population—both of which would improve the accuracy of the findings, because the prevalence of diabetes and the use of health care services varies substantially by age-group, sex, and race/ethnicity. Greater disaggregation also allows for more accurate projections of the national cost of diabetes in future years as the U.S. population grows, ages, and becomes more racially and ethnically diverse. However, if lifestyle trends in the U.S. (such as the growing problem of obesity) increase diabetes prevalence rates, future costs could grow in excess of those extrapolated based on current prevalence rates.

Although this study includes the same cost components of ADA’s 1998 study (2), the change in estimated diabetes-attributed costs between 1997 and 2002 for some cost components reflects a refinement in the cost estimates as opposed to an actual change in true costs. As discussed previously, the 1998 study estimated disability-related costs at $32.5 billion in 1997, compared with the current study, which estimates disability-related costs at $7.5 billion. Much of the decrease in attributed costs is the result of using foregone expected annual expenditures instead of foregone expected lifetime earnings to estimate the pecuniary cost of lost productivity, which may have been an inadvertent overstatement in the previous report. This large decrease in attributed costs is offset by substantially higher cost estimates for certain health care components such as nursing home care, home health care, and physician office-based care.

One factor contributing to the large increase in attributed cost for nursing home care is the higher estimated cost per day in nursing homes ($169 per day used in this study vs. $79 per day [$97 per day in 2002 dollars] used in the 1998 study). This study estimates a much higher cost of home health care services, with an estimated 18% of total U.S. home health care services costs attributed to diabetes compared with an estimated 0.2% of the total U.S. cost of home health care services attributed to diabetes in the 1998 study. Martin et al. (26) estimated national expenditures of approximately $30 billion for home health care in 1997, compared with the estimate of $19 billion in the 1998 report (2).

Eliminating or reducing the health problems caused by diabetes through factors such as better access to preventive care, more widespread diagnosis, more intensive disease management, and the advent of new medical technologies could significantly improve the quality of life for people with diabetes and their families, while at the same time potentially reducing national expenditures for health care services and increasing productivity in the U.S. economy.

In conclusion, the cost of diabetes, both direct medical expenditures and the costs of foregone productivity, is estimated to have been $132 billion in 2002. This represents a substantial cost burden to society and, in particular, to those in-dividuals with diabetes and their families. Nevertheless, this estimate is conservative and probably underestimates the true cost of the disease.

Figure 1—

Proportion of female population with confirmed diabetes in 2002.

Figure 1—

Proportion of female population with confirmed diabetes in 2002.

Figure 2—

Proportion of male population with confirmed diabetes in 2002.

Figure 2—

Proportion of male population with confirmed diabetes in 2002.

Figure 3—

Etiological fractions, adjusted for race/ethnicity, sex, and finer age-groupings. CVD, cardiovascular disease; GMC, general medical conditions; PVD, peripheral vascular disease; OCC, other chronic complications.

Figure 3—

Etiological fractions, adjusted for race/ethnicity, sex, and finer age-groupings. CVD, cardiovascular disease; GMC, general medical conditions; PVD, peripheral vascular disease; OCC, other chronic complications.

Figure 4—

Projected impact of changing demographic characteristics on the national cost of diabetes: 2002–2020 (in 2002 billions of dollars).

Figure 4—

Projected impact of changing demographic characteristics on the national cost of diabetes: 2002–2020 (in 2002 billions of dollars).

Table 1—

Projections of the U.S. population diagnosed with diabetes (in millions)

200220102020% Increase from 2002 to 2020
Total population 288 307 335 17 
Diagnosed with diabetes 12.1 14.5 17.4 44 
Overall diabetes prevalence rate 4.2% 4.7% 5.2% 24 
Race/ethnicity     
 Hispanic 1.4 2.0 2.9 107 
 Non-Hispanic white 8.1 9.1 10.3 27 
 Non-Hispanic black 2.0 2.5 3.0 50 
 Non-Hispanic other 0.6 0.9 1.2 100 
Sex     
 M 5.8 7.1 8.6 48 
 F 6.3 7.4 8.8 40 
Age (years)     
 <45 2.1 2.0 2.1 
 45–64 5.2 7.0 7.7 48 
 ≥65 4.8 5.5 7.5 56 
200220102020% Increase from 2002 to 2020
Total population 288 307 335 17 
Diagnosed with diabetes 12.1 14.5 17.4 44 
Overall diabetes prevalence rate 4.2% 4.7% 5.2% 24 
Race/ethnicity     
 Hispanic 1.4 2.0 2.9 107 
 Non-Hispanic white 8.1 9.1 10.3 27 
 Non-Hispanic black 2.0 2.5 3.0 50 
 Non-Hispanic other 0.6 0.9 1.2 100 
Sex     
 M 5.8 7.1 8.6 48 
 F 6.3 7.4 8.8 40 
Age (years)     
 <45 2.1 2.0 2.1 
 45–64 5.2 7.0 7.7 48 
 ≥65 4.8 5.5 7.5 56 

Census Bureau (1) population projections adjusted using calibration factors that align Census Bureau projections for the year 2000 with actual Census 2000 counts.

Table 2—

Source of health resource use and price estimates

Cost componentSource of use dataSource of price dataUnit price (2002 dollars)
Institutional care    
 Hospital day 1999 NIS 1998 MEPS 2,385 
 Nursing home day 1999 NNHS Kiplinger (5169 
Outpatient care    
 Office-based physician encounter 1998–2000 NAMCS 1998 MEPS 160 
  Emergency department visit 1998–2000 NHAMCS 1998 MEPS 452 
 Ambulance service 1998–2000 NHAMCS AAA 247 
 Hospital outpatient and free-standing ambulatory surgical center visit 1998–2000 NHAMCS 1998 MEPS 561 
 Outpatient medication 1998–2000 NAMCS, 1998–2000 NHAMCS 1998 MEPS 47 
 Home health visit 1998, 2000 NHHCS, 1998–2000 NHIS 1998 MEPS 89 
 Hospice care day 1998, 2000 NHHCS Hospice Association of America (6107 
Indirect costs    
 Lost workday 1998–2000 NHIS BLS 168 
 Restricted activity day 1998–2000 NHIS BLS 67 
 Premature mortality (lost lifetime earnings) Social Security Administration (7BLS 116,928 
 Permanent disability (lost annual earnings) 2002 Social Security Administration Data (8BLS 42,462 
Supplies    
 Insulin use (supplies include glucose monitoring supplies, insulin delivery supplies, and insulin) and average annual cost of use 1998–2000 NHIS, 2002 The Source Prescription Audit, LifeClinic (9, 10), Fertig et al. (11), Frost and Sullivan (122002 Red Book (13), 2002 The Source Prescription Audit, Scott-Levin, 2002 AllegroMedical et al. (14), 2002 MiniMed (151,778 
 Use of oral agents and average annual cost of use 1998–2000 NHIS, Luna and Feinglos (16), 2002 The Source Prescription Audit, CDC (17), NIDDK (182002 Red Book (13666 
Cost componentSource of use dataSource of price dataUnit price (2002 dollars)
Institutional care    
 Hospital day 1999 NIS 1998 MEPS 2,385 
 Nursing home day 1999 NNHS Kiplinger (5169 
Outpatient care    
 Office-based physician encounter 1998–2000 NAMCS 1998 MEPS 160 
  Emergency department visit 1998–2000 NHAMCS 1998 MEPS 452 
 Ambulance service 1998–2000 NHAMCS AAA 247 
 Hospital outpatient and free-standing ambulatory surgical center visit 1998–2000 NHAMCS 1998 MEPS 561 
 Outpatient medication 1998–2000 NAMCS, 1998–2000 NHAMCS 1998 MEPS 47 
 Home health visit 1998, 2000 NHHCS, 1998–2000 NHIS 1998 MEPS 89 
 Hospice care day 1998, 2000 NHHCS Hospice Association of America (6107 
Indirect costs    
 Lost workday 1998–2000 NHIS BLS 168 
 Restricted activity day 1998–2000 NHIS BLS 67 
 Premature mortality (lost lifetime earnings) Social Security Administration (7BLS 116,928 
 Permanent disability (lost annual earnings) 2002 Social Security Administration Data (8BLS 42,462 
Supplies    
 Insulin use (supplies include glucose monitoring supplies, insulin delivery supplies, and insulin) and average annual cost of use 1998–2000 NHIS, 2002 The Source Prescription Audit, LifeClinic (9, 10), Fertig et al. (11), Frost and Sullivan (122002 Red Book (13), 2002 The Source Prescription Audit, Scott-Levin, 2002 AllegroMedical et al. (14), 2002 MiniMed (151,778 
 Use of oral agents and average annual cost of use 1998–2000 NHIS, Luna and Feinglos (16), 2002 The Source Prescription Audit, CDC (17), NIDDK (182002 Red Book (13666 

American Ambulance Association (AAA) estimate of the national average cost for a basic life support transport, adjusted to 2002 dollars;

actual estimate varies by age-group and sex;

estimated annual cost per user.

CDC, Centers for Disease Control and Prevention; NAMCS, National Ambulatory Medical Care Survey; NHAMCS, National Hospital Ambulatory Medical Care Survey; NHHCS, National Home and Hospital Care Survey; NIS, National Inpatient Sample; NIDDK, National Institute of Diabetes and Digestive and Kidney Diseases; NNHS, National Nursing Home Survey.

Table 3—

Health care use attributable to diabetes in the U.S., by age and type of service, 2002 (in thousands)

Type of serviceAge (years)
Total
<4545–64≥65
Institutional care     
 Hospital inpatient days 2,183 5,802 8,927 16,912 
 Nursing home days 15,141 32,805 34,406 82,352 
Outpatient care     
 Office-based physician encounters 11,555 16,718 34,365 62,638 
 Emergency department encounters 334 971 3,478 4,782 
 Hospital outpatient and free-standing ambulatory surgical center encounters 46 2,399 3,467 5,912 
Home health visits 1,493 5,899 36,820 44,212 
Hospice care days 48 430 4,616 5,094 
Type of serviceAge (years)
Total
<4545–64≥65
Institutional care     
 Hospital inpatient days 2,183 5,802 8,927 16,912 
 Nursing home days 15,141 32,805 34,406 82,352 
Outpatient care     
 Office-based physician encounters 11,555 16,718 34,365 62,638 
 Emergency department encounters 334 971 3,478 4,782 
 Hospital outpatient and free-standing ambulatory surgical center encounters 46 2,399 3,467 5,912 
Home health visits 1,493 5,899 36,820 44,212 
Hospice care days 48 430 4,616 5,094 
Table 4—

U.S. health care use attributable to diabetes by medical condition (in thousands)

ServiceDiabetesChronic complications
General medical conditionsTotal
NeurologicalPeripheral vascularCardiovascularRenalMetabolicOphthalmicOther
Institutional care           
 Inpatient days 856 460 313 4,084 410 16 89 10,680 16,912 
 Nursing home days 25,296 7,948 941 12,628 2,600 107 161 32,663 82,352 
Outpatient care           
 Physician office visits 9,930 652 336 13,064 980 1,171 1,502 175 34,826 62,638 
 Emergency visits 309 65 31 690 166 19 41 3,456 4,782 
 Hospital outpatient visits 1,357 47 49 1,367 111 93 109 16 2,763 5,912 
 Home health visits 16,924 1,077 1,000 6,973 803 33 77 103 17,221 44,212 
 Hospice care days 121 39 698 52 4,175 5,094 
ServiceDiabetesChronic complications
General medical conditionsTotal
NeurologicalPeripheral vascularCardiovascularRenalMetabolicOphthalmicOther
Institutional care           
 Inpatient days 856 460 313 4,084 410 16 89 10,680 16,912 
 Nursing home days 25,296 7,948 941 12,628 2,600 107 161 32,663 82,352 
Outpatient care           
 Physician office visits 9,930 652 336 13,064 980 1,171 1,502 175 34,826 62,638 
 Emergency visits 309 65 31 690 166 19 41 3,456 4,782 
 Hospital outpatient visits 1,357 47 49 1,367 111 93 109 16 2,763 5,912 
 Home health visits 16,924 1,077 1,000 6,973 803 33 77 103 17,221 44,212 
 Hospice care days 121 39 698 52 4,175 5,094 
Table 5—

Share of total U.S. health care use attributable to diabetes by medical condition

ServiceDiabetesChronic complications
General medical conditionsTotal
NeurologicalPeripheral vascularCardiovascularRenalMetabolicOphthalmicOther
Institutional care           
 Inpatient days 24 63 100 
 Nursing home days 31 10 15 40 100 
Outpatient care           
 Physician office visits 16 21 56 100 
 Emergency visits 14 72 100 
 Hospital outpatient visits 23 23 47 100 
 Home health visits 38 16 39 100 
 Hospice care days 14 82 100 
ServiceDiabetesChronic complications
General medical conditionsTotal
NeurologicalPeripheral vascularCardiovascularRenalMetabolicOphthalmicOther
Institutional care           
 Inpatient days 24 63 100 
 Nursing home days 31 10 15 40 100 
Outpatient care           
 Physician office visits 16 21 56 100 
 Emergency visits 14 72 100 
 Hospital outpatient visits 23 23 47 100 
 Home health visits 38 16 39 100 
 Hospice care days 14 82 100 

Data are %.

Table 6—

Proportion of total U.S. health care use attributable to diabetes for various conditions

Service*DiabetesChronic complications
General medical conditionsTotal
NeurologicalPeripheral vascularCardiovascularRenalMetabolicOphthalmicOther
Institutional care           
 Inpatient days 100 19 10 13 
 Nursing home days 100 15 12 19 20 13 15 
Outpatient care           
 Physician office visits 100 20 14 
 Emergency visits 100 20 13 17 
 Hospital outpatient visits 100 22 14 12 
 Home health visits 100 19 12 11 18 
 Hospice care days 100 19 10 11 13 14 
Service*DiabetesChronic complications
General medical conditionsTotal
NeurologicalPeripheral vascularCardiovascularRenalMetabolicOphthalmicOther
Institutional care           
 Inpatient days 100 19 10 13 
 Nursing home days 100 15 12 19 20 13 15 
Outpatient care           
 Physician office visits 100 20 14 
 Emergency visits 100 20 13 17 
 Hospital outpatient visits 100 22 14 12 
 Home health visits 100 19 12 11 18 
 Hospice care days 100 19 10 11 13 14 

Data are %.

*

Differences across service types in the proportion of total health care use attributable to diabetes occur because the etiological fraction for a particular medical condition differs by demographic group, and the demographic characteristics of patients receiving services differ by type of service.

Table 7—

Health care expenditures attributable to diabetes in the U.S., by age and type of service, 2002 (in millions of dollars)

Type of serviceAge (years)
Total
<4545–64≥65
Institutional care     
 Hospital inpatient days 5,207 13,838 21,293 40,337 
 Nursing home days 2,552 5,528 5,798 13,878 
Outpatient care     
 Office-based physician encounters 1,851 2,678 5,505 10,033 
 Emergency department encounters 151 439 1,572 2,162 
 Hospital outpatient and free-standing ambulatory surgical center encounters 26 1,345 1,944 3,315 
 Home health visits 133 524 3,273 3,930 
 Hospice care days 46 492 543 
Other expenditures     
 Ambulance services 28 40 77 146 
 Outpatient medication 756 1,991 2,769 5,516 
 Oral agents 533 2,318 2,157 5,009 
 Insulin and delivery supplies 1,355 2,891 2,745 6,991 
Total 12,596 31,640 47,626 91,861 
Type of serviceAge (years)
Total
<4545–64≥65
Institutional care     
 Hospital inpatient days 5,207 13,838 21,293 40,337 
 Nursing home days 2,552 5,528 5,798 13,878 
Outpatient care     
 Office-based physician encounters 1,851 2,678 5,505 10,033 
 Emergency department encounters 151 439 1,572 2,162 
 Hospital outpatient and free-standing ambulatory surgical center encounters 26 1,345 1,944 3,315 
 Home health visits 133 524 3,273 3,930 
 Hospice care days 46 492 543 
Other expenditures     
 Ambulance services 28 40 77 146 
 Outpatient medication 756 1,991 2,769 5,516 
 Oral agents 533 2,318 2,157 5,009 
 Insulin and delivery supplies 1,355 2,891 2,745 6,991 
Total 12,596 31,640 47,626 91,861 
Table 8—

Health care expenditures attributable to diabetes, by medical condition and type of service, 2002 (in millions of dollars)

Medical conditionInpatient daysOffice visitsOutpatient visitsEmergency visitsNursing home daysHome health visitsHospice care daysOtherTotal
Diabetes 2,043 1,591 761 140 4,263 1,504 13 12,916 23,231 
Neurological symptoms 1,096 104 26 29 1,339 96 52 2,748 
Peripheral vascular disease 746 54 27 14 159 89 31 1,121 
Cardiovascular disease 9,740 2,093 767 312 2,128 620 74 1,892 17,626 
Renal complications 977 157 62 75 438 71 92 1,879 
Endocrine/metabolic complications 38 188 52 18 126 426 
Ophthalmic complications 11 241 61 92 422 
Other complications 212 28 19 27 14 318 
General medical conditions 25,473 5,578 1,549 1,562 5,504 1,531 445 2,447 44,091 
Total 40,337 10,033 3,315 2,162 13,878 3,930 543 17,662 91,861 
Medical conditionInpatient daysOffice visitsOutpatient visitsEmergency visitsNursing home daysHome health visitsHospice care daysOtherTotal
Diabetes 2,043 1,591 761 140 4,263 1,504 13 12,916 23,231 
Neurological symptoms 1,096 104 26 29 1,339 96 52 2,748 
Peripheral vascular disease 746 54 27 14 159 89 31 1,121 
Cardiovascular disease 9,740 2,093 767 312 2,128 620 74 1,892 17,626 
Renal complications 977 157 62 75 438 71 92 1,879 
Endocrine/metabolic complications 38 188 52 18 126 426 
Ophthalmic complications 11 241 61 92 422 
Other complications 212 28 19 27 14 318 
General medical conditions 25,473 5,578 1,549 1,562 5,504 1,531 445 2,447 44,091 
Total 40,337 10,033 3,315 2,162 13,878 3,930 543 17,662 91,861 

Includes ambulance services, outpatient medications, oral agents, insulin, and supplies.

Table 9—

Total health care expenditures by diabetes status, 2002 (in millions of dollars and % of U.S. total)

Cost componentPopulation with diabetes
Population without diabetesU.S. total
Attributable to diabetes
Incurred by people with diabetes
Millions of dollars% of U.S. totalMillions of dollars% of U.S. total
Hospital inpatient 40,337 76,245 18 354,970 (millions of dollars) 431,216 (millions of dollars) 
Nursing home 13,878 15 25,860 28 67,915 93,775 
Physician’s office 10,033 18,433 13 118,484 136,917 
Hospital outpatient 3,315 5,911 12 42,330 48,240 
Emergency 2,162 4,424 44,952 49,375 
Outpatient medication 5,516 9,636 15 55,074 64,710 
Home health 3,930 18 6,230 28 15,873 22,103 
Hospice care 543 14 1,020 26 2,960 3,981 
Ambulance services 146 281 10 2,433 2,714 
Insulin and delivery supplies 6,991 100 6,991 100 NA 6,991 
Oral agents 5,009 100 5,009 100 NA 5,009 
Total health care costs 91,861 11 160,041 19 704,991 865,032 
Cost componentPopulation with diabetes
Population without diabetesU.S. total
Attributable to diabetes
Incurred by people with diabetes
Millions of dollars% of U.S. totalMillions of dollars% of U.S. total
Hospital inpatient 40,337 76,245 18 354,970 (millions of dollars) 431,216 (millions of dollars) 
Nursing home 13,878 15 25,860 28 67,915 93,775 
Physician’s office 10,033 18,433 13 118,484 136,917 
Hospital outpatient 3,315 5,911 12 42,330 48,240 
Emergency 2,162 4,424 44,952 49,375 
Outpatient medication 5,516 9,636 15 55,074 64,710 
Home health 3,930 18 6,230 28 15,873 22,103 
Hospice care 543 14 1,020 26 2,960 3,981 
Ambulance services 146 281 10 2,433 2,714 
Insulin and delivery supplies 6,991 100 6,991 100 NA 6,991 
Oral agents 5,009 100 5,009 100 NA 5,009 
Total health care costs 91,861 11 160,041 19 704,991 865,032 
Table 10—

Annual per capita health care expenditures by diabetes status, 2002

Cost componentWith diabetesUnadjusted
Adjusted*
Without diabetesRatio with to without diabetesWithout diabetesRatio with to without diabetes
Hospital inpatient $6,309 $1,289 4.9 $2,971 2.1 
Nursing home 2,140 247 8.7 991 2.2 
Physician’s office 1,525 430 3.5 695 2.2 
Hospital outpatient 489 154 3.2 215 2.3 
Emergency 366 163 2.2 187 2.0 
Home health 516 58 8.9 190 2.7 
Hospice 84 11 7.9 39 2.1 
Ambulance services 23 2.6 11 2.1 
Outpatient medication 797 202 3.9 341 2.3 
Insulin & delivery supplies 579 NA NA NA NA 
Oral agents 414 NA NA NA NA 
Total health care costs $13,243 $2,560 5.2 $5,642 2.4 
Cost componentWith diabetesUnadjusted
Adjusted*
Without diabetesRatio with to without diabetesWithout diabetesRatio with to without diabetes
Hospital inpatient $6,309 $1,289 4.9 $2,971 2.1 
Nursing home 2,140 247 8.7 991 2.2 
Physician’s office 1,525 430 3.5 695 2.2 
Hospital outpatient 489 154 3.2 215 2.3 
Emergency 366 163 2.2 187 2.0 
Home health 516 58 8.9 190 2.7 
Hospice 84 11 7.9 39 2.1 
Ambulance services 23 2.6 11 2.1 
Outpatient medication 797 202 3.9 341 2.3 
Insulin & delivery supplies 579 NA NA NA NA 
Oral agents 414 NA NA NA NA 
Total health care costs $13,243 $2,560 5.2 $5,642 2.4 
*

Adjusted to reflect demographic composition of the population with diabetes.

Table 11—

Morbidity costs attributable to diabetes, 2002

Cause of permanent disabilityAttributed disability cases% of total attributed casesValue of lost productivity (billions of dollars)
Diabetes 121,893 69 5.2 
Cardiovascular disease 12,110 0.5 
Renal disease 3,887 0.2 
Other diagnoses 38,584 22 1.6 
Total 176,475 100 7.5 
Cause of permanent disabilityAttributed disability cases% of total attributed casesValue of lost productivity (billions of dollars)
Diabetes 121,893 69 5.2 
Cardiovascular disease 12,110 0.5 
Renal disease 3,887 0.2 
Other diagnoses 38,584 22 1.6 
Total 176,475 100 7.5 
Table 12—

Mortality costs attributable to diabetes, 2002

Primary cause of deathDeaths attributed to diabetes (thousands)% of total U.S. deathsTotal lost years (thousands)Value of lost productivity (millions of dollars)
Diabetes 72 100 1,080 10,622 
Renal disease 31 273 
Cerebrovascular disease 12 54 305 
Cardiovascular disease 108 19 1,357 10,358 
Grand total 186 NA* 2,522 21,558 
Primary cause of deathDeaths attributed to diabetes (thousands)% of total U.S. deathsTotal lost years (thousands)Value of lost productivity (millions of dollars)
Diabetes 72 100 1,080 10,622 
Renal disease 31 273 
Cerebrovascular disease 12 54 305 
Cardiovascular disease 108 19 1,357 10,358 
Grand total 186 NA* 2,522 21,558 
*

Grand total comprises mortality for reasons other than diabetes, renal disease, cerebrovascular disease, and cardiovascular disease.

Table 13—

Total cost of diabetes, 2002

Cost componentTotal cost attributable to diabetes (millions of dollars)Components’ proportion of total cost (%)*
Health care expenditures 91,861 70 
 Institutional care 54,215 41 
  Hospital inpatient care 40,337 31 
  Nursing home care 13,878 11 
 Outpatient care 20,130 15 
  Physician office-based care 10,033 
  Emergency care 2,162 
  Ambulance services 146 
  Hospital outpatient care 3,315 
  Home healthcare 3,930 
  Hospice care 543 
 Outpatient medication and supplies 17,516 13 
  Outpatient medication 5,516 
  Insulin and delivery supplies 6,991 
  Oral agents 5,009 
Indirect costs due to lost productivity 39,810 30 
 Lost work days 4,503 
 Restricted activity days 6,256 
 Mortality 21,558 16 
 Permanent disability 7,494 
Total cost 131,672 100 
Cost componentTotal cost attributable to diabetes (millions of dollars)Components’ proportion of total cost (%)*
Health care expenditures 91,861 70 
 Institutional care 54,215 41 
  Hospital inpatient care 40,337 31 
  Nursing home care 13,878 11 
 Outpatient care 20,130 15 
  Physician office-based care 10,033 
  Emergency care 2,162 
  Ambulance services 146 
  Hospital outpatient care 3,315 
  Home healthcare 3,930 
  Hospice care 543 
 Outpatient medication and supplies 17,516 13 
  Outpatient medication 5,516 
  Insulin and delivery supplies 6,991 
  Oral agents 5,009 
Indirect costs due to lost productivity 39,810 30 
 Lost work days 4,503 
 Restricted activity days 6,256 
 Mortality 21,558 16 
 Permanent disability 7,494 
Total cost 131,672 100 
*

Cost component percentages do not necessarily sum to category totals because of rounding.

APPENDIX

Chronic complications of diabetesICD-9 MEPS codes
Neurological symptoms  
 Myasthetic syndromes in diseases classified elsewhere (amyotrophy) 358.1 
 Other specified idiopathic peripheral neuropathy 356.8 
 Mononeuritis of upper and lower limbs 354, 355 
 Arthropathy associated w/neurological disorders (Charcot’s arthropathy) 713.5 
 Peripheral autonomic neuropathy 337.1 
 Polyneuropathy in diabetes 357.2 
 Neuralgia, neuritis, and radiculitis, unspecified 729.2 
 Diabetes with neurological complications 250.6 
 Occlusion of cerebral arteries 434 
 Hemorrhagic stroke 430–432 
 Late effects of cerebrovascular disease 438 
 Occlusion of stenosis of pre-cerebral arteries 433 
 Other and ill-defined cerebrovascular disease 437 
 Acute, but ill-defined, cerebrovascular disease 436 
 Transient ischemic attack 435 
Peripheral vascular disease  
 Atherosclerosis 440 
 Embolism and thrombosis, structure of artery 444, 447.1 
 Other peripheral vascular disease 443 
 Other disorders of circulatory system 459 
 Phlebitis and thrombophlebitis, portal vein thrombosis, and thrombolism and venous thrombolism 451, 452 
 Other venous embolism and thrombolism 453 
 Varicose veins of lower extremities 454 
 Gangrene and amputations 785.4, 885–887, 895–897 
 Chronic ulcer of skin 707 
Cardiovascular disease  
 Aortic and other aneurysms 441, 442 
 Hypotension 458 
 Angina 413 
 Conduction disorders and cardiac dysrhythmias 426–427 
 Atherosclerotic cardiovascular disease 429.2 
 Cardiomegaly 429.3 
 Cardiomyopathy 425 
 Other acute and subacute forms of ischemic heart disease 411 
 Heart failure 428 
 Diabetes w/peripheral circulatory disorders 250.7 
 Myocardial degeneration 429.1 
 Myocardial infarction 410, 412 
 Other chronic ischemic heart disease 414 
 Hypertension 401–405 
Renal Complications  
 Infections of kidney 590 
 Other disorders of bladder 596 
 Cystitis 595 
 Renal sclerosis, unspecified 587 
 Glomerulonephritis, nephrotic syndrome, nephritis, nephropathy 580–583 
 Proteinuria 791.0 
 Renal failure and its sequelae 584, 586, 588 
 Other disorders of kidney and ureter 593 
 Urinary tract infection 599.0 
 Diabetes and renal complications 250.4 
 Chronic renal failure (end-stage renal disease) 585 
Endocrine/metabolic complications  
 Dwarfism-obesity syndrome 259.4 
 Glycogenosis and galactosemia 271.0, 271.1 
 Disorders of iron metabolism 275.0 
 Hypercholesterolemia 272.0 
 Hyperchylomicronemia 272.3 
 Hyperkalemia 276.7 
 Hypertriglyceridemia 272.1 
 Macroglobulinemia 273.3 
 Lancereaux’s disease 261 
 Lipidoses 272.7 
 Other specified endocrine disorders 259.8 
 Other and unspecified hyperlipidemia 272.4 
 Mixed hyperlipidemia 272.2 
 Renal glycosuria 271.4 
Ophthalmic complications  
 Other retinal disorders 362 
 Vascular disorders of the iris and ciliary body 364.0, 364.4 
 Disorders of the optic nerve and visual pathways 377 
 Diabetes with ophthalmic complications 250.5 
 Cataract 366 
 Glaucoma 365 
 Visual disturbance, low vision, blindness 368–369 
Other complications  
 Bacteremia, bacterial infection, Coxsackie virus 079.2, 790.7 
 Candidiasis of skin and nails 112.3 
 Chronic osteomyelitis of the foot 730.17 
 Other and unspecified noninfectious  gastroenteritis and colitis 558.9 
 Impotence of organic origin 607.84 
 Infective otitis externa 380.1 
 Degenerative skin disorders 709.3 
 Candidiasis of vulva and vagina 112.1 
 Cellulitis 681, 682 
 Diabetes with other specified manifestations 250.8 
 Diabetes with unspecified complication 250.9 
 Other bone involvement in disease classified  elsewhere 731.8 
Chronic complications of diabetesICD-9 MEPS codes
Neurological symptoms  
 Myasthetic syndromes in diseases classified elsewhere (amyotrophy) 358.1 
 Other specified idiopathic peripheral neuropathy 356.8 
 Mononeuritis of upper and lower limbs 354, 355 
 Arthropathy associated w/neurological disorders (Charcot’s arthropathy) 713.5 
 Peripheral autonomic neuropathy 337.1 
 Polyneuropathy in diabetes 357.2 
 Neuralgia, neuritis, and radiculitis, unspecified 729.2 
 Diabetes with neurological complications 250.6 
 Occlusion of cerebral arteries 434 
 Hemorrhagic stroke 430–432 
 Late effects of cerebrovascular disease 438 
 Occlusion of stenosis of pre-cerebral arteries 433 
 Other and ill-defined cerebrovascular disease 437 
 Acute, but ill-defined, cerebrovascular disease 436 
 Transient ischemic attack 435 
Peripheral vascular disease  
 Atherosclerosis 440 
 Embolism and thrombosis, structure of artery 444, 447.1 
 Other peripheral vascular disease 443 
 Other disorders of circulatory system 459 
 Phlebitis and thrombophlebitis, portal vein thrombosis, and thrombolism and venous thrombolism 451, 452 
 Other venous embolism and thrombolism 453 
 Varicose veins of lower extremities 454 
 Gangrene and amputations 785.4, 885–887, 895–897 
 Chronic ulcer of skin 707 
Cardiovascular disease  
 Aortic and other aneurysms 441, 442 
 Hypotension 458 
 Angina 413 
 Conduction disorders and cardiac dysrhythmias 426–427 
 Atherosclerotic cardiovascular disease 429.2 
 Cardiomegaly 429.3 
 Cardiomyopathy 425 
 Other acute and subacute forms of ischemic heart disease 411 
 Heart failure 428 
 Diabetes w/peripheral circulatory disorders 250.7 
 Myocardial degeneration 429.1 
 Myocardial infarction 410, 412 
 Other chronic ischemic heart disease 414 
 Hypertension 401–405 
Renal Complications  
 Infections of kidney 590 
 Other disorders of bladder 596 
 Cystitis 595 
 Renal sclerosis, unspecified 587 
 Glomerulonephritis, nephrotic syndrome, nephritis, nephropathy 580–583 
 Proteinuria 791.0 
 Renal failure and its sequelae 584, 586, 588 
 Other disorders of kidney and ureter 593 
 Urinary tract infection 599.0 
 Diabetes and renal complications 250.4 
 Chronic renal failure (end-stage renal disease) 585 
Endocrine/metabolic complications  
 Dwarfism-obesity syndrome 259.4 
 Glycogenosis and galactosemia 271.0, 271.1 
 Disorders of iron metabolism 275.0 
 Hypercholesterolemia 272.0 
 Hyperchylomicronemia 272.3 
 Hyperkalemia 276.7 
 Hypertriglyceridemia 272.1 
 Macroglobulinemia 273.3 
 Lancereaux’s disease 261 
 Lipidoses 272.7 
 Other specified endocrine disorders 259.8 
 Other and unspecified hyperlipidemia 272.4 
 Mixed hyperlipidemia 272.2 
 Renal glycosuria 271.4 
Ophthalmic complications  
 Other retinal disorders 362 
 Vascular disorders of the iris and ciliary body 364.0, 364.4 
 Disorders of the optic nerve and visual pathways 377 
 Diabetes with ophthalmic complications 250.5 
 Cataract 366 
 Glaucoma 365 
 Visual disturbance, low vision, blindness 368–369 
Other complications  
 Bacteremia, bacterial infection, Coxsackie virus 079.2, 790.7 
 Candidiasis of skin and nails 112.3 
 Chronic osteomyelitis of the foot 730.17 
 Other and unspecified noninfectious  gastroenteritis and colitis 558.9 
 Impotence of organic origin 607.84 
 Infective otitis externa 380.1 
 Degenerative skin disorders 709.3 
 Candidiasis of vulva and vagina 112.1 
 Cellulitis 681, 682 
 Diabetes with other specified manifestations 250.8 
 Diabetes with unspecified complication 250.9 
 Other bone involvement in disease classified  elsewhere 731.8 

ICD-9, International Classification of Diseases, Ninth Revision.

Support for this study was provided by ADA, the National Institute of Diabetes and Digestive and Kidney Diseases, and the ADA Industry Advisory Council.

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This report was prepared by Paul Hogan, Tim Dall, and Plamen Nikolov of the Lewin Group, Inc., Falls Church, Virginia.

Address correspondence and reprint requests to Matt Petersen, American Diabetes Association, 1701 N. Beauregard St., Alexandria, VA 22311. E-mail: mpetersen@diabetes.org.

A table elsewhere in this issue shows conventional and Système International (SI) units and conversion factors for many substances.