Billions Spent on Diabetes Treatment, But How Much May Be Avoidable?

NEWTOWN, Conn., March 29, 2016 /PRNewswire-USNewswire/ -- A new analysis of health care data indicates that about $16 billion annually is spent to treat potentially avoidable complications of diabetes. Identifying the causes and preventing the development of these complications are powerful opportunities to improve care and lower costs in the health care system, especially considering the prevalence of diabetes in the United States. In 2012, 9.3 percent, or 29.1 million Americans had diabetes, and an estimated 1 out of 3 people are expected to develop the disease in their lifetime.

Researchers at the Health Care Incentives Improvement Institute (HCI³) evaluated administrative claims data for 9,957 adults with diabetes who had commercial insurance and 6,817 who had Medicaid coverage. They processed the claims data through PROMETHEUS Analytics^©, a software solution that separates costs of "typical" care from costs associated with potentially avoidable complications. These complications are events that negatively affect patients, and that may be controllable by the clinicians delivering care to the patients. In a diabetic population, potentially avoidable complications can range from a skin infection to acute pancreatitis or even amputations. And the HCI³ analysis found that such complications are costly and common in both Medicaid and private insurance members.

"When health care leaders can zero in on where unnecessary costs are coming from, and identify which are caused by potentially avoidable complications, they're in a great position to start making changes that are going to be better for patients' physical and financial health," says François de Brantes, coauthor of the study and executive director of HCI³.

Data showed the majority of diabetes patients experience at least one potentially avoidable complication, costing an average of $1,043 per year for patients with private insurance and $1,869 for those with Medicaid. Such costs represent almost 23 percent of diabetes care costs among the commercially insured population and 28 percent under Medicaid. Extrapolating these data to the national population of adults with diabetes, the researchers calculated $6.5 billion dollars annually in care for potentially avoidable complications suffered by people with private insurance, and $10.3 billion for those with Medicaid.

Measuring potentially avoidable care costs is just one step toward improving quality and affordability of care, says de Brantes, but it's a crucial one. "Without the spotlight on problem areas, there's no progress. Data insights make it possible to alter payment models so they reward excellence, or to modify some clinical practices."

The report is Identifying Sources of Variation in Diabetes Episodes of Care with PROMETHEUS Analytics. It is available online at http://bit.ly/diabetes-PACs, and includes analysis of additional forms of inefficient care, potentially avoidable services and gaps in diabetes care.

About HCI³
Health Care Incentives Improvement Institute, Inc. (HCI³®) is a not-for-profit organization that aims to create significant improvements in the quality and affordability of health care through evidence-based incentive programs and support of payment reform models. Its nationally recognized programs, Bridges to Excellence® and PROMETHEUS Payment^® have been at the forefront of payment reform, and the new PROMETHEUS Analytics® offers transformational insights for payers and providers.

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SOURCE Health Care Incentives Improvement Institute (HCI3)

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