Type 2 diabetes is the most common form of diabetes.
(Did you know type 2 diabetes is largely preventable?)
Type 2 diabetes affects about 1 in 10 people in the US.
(Why so many? Type 2 diabetes is largely preventable.)
1.5 million Americans are diagnosed with diabetes every year.
(So many new cases when type 2 diabetes is largely preventable.)
Type 2 diabetes increases the risk for many other serious health problems.
(That is terrible, because type 2 diabetes is largely preventable.)
And, oh yeah – type 2 diabetes is largely preventable!

Americans are overweight and physically inactive, and it is costing us!  In March of 2018, the American Diabetes Association released new research estimating the total costs of diagnosed diabetes to have been $327 billion in 2017.  This cost includes $237 billion (72.5 percent) in direct medical costs and $90 billion (27.5 percent) in reduced productivity.  This is a 26 percent increase from 2012, when the cost was last examined and found to be $245 billion.

Key Findings:

  • $16,752 per year = average medical cost for people with diagnosed diabetes
  • $9,601 = medical costs directly attributed to diabetes
  • Diabetics have 2.3 times more medical expenses than non-diabetics

The largest components of medical expenses are:

  • Hospital inpatient care (30 percent of the total medical cost)
  • Prescription medications to treat complications of diabetes (30 percent)
  • Anti-diabetic agents and diabetes supplies (15 percent)
  • Physician office visits (13 percent)

Indirect costs of diabetes include:

  • Increased absenteeism ($3.3 billion)
  • Reduced productivity while at work ($26.9 billion)
  • Reduced productivity for those not in the labor force ($2.3 billion)
  • Inability to work as a result of disease-related disability ($37.5 billion)
  • Lost productive capacity due to early death ($19.9 billion)


While diabetes itself is expensive, oftentimes the complications of diabetes are where the real cost drivers occur.  The complications of type 2 diabetes include:

  • Heart disease – Heart attack and stroke are the leading causes of death among people with diabetes. High blood glucose levels cause damage to nerves and blood vessels over time, and plaque buildup is another byproduct of high glucose levels. These factors increase your risk for heart disease and stroke — at least two times that of someone without diabetes.
  • Kidney failure – Of the 100,000 people diagnosed with kidney failure in the U.S. each year, nearly 44 percent of cases are caused by complications of diabetes.
  • Eye problems – 40 to 45 percent of people with diabetes have some amount of diabetic retinopathy, an eye condition caused by damage to the blood vessels in the retina and the leading cause of blindness in the U.S. Other diabetes complications include cataracts and glaucoma.
  • Amputations – Complications of the foot are one of the most serious and costly effects of diabetes. In fact, every 30 seconds a lower limb is amputated as a consequence of diabetes.  That’s 2,880 limbs per day!
  • Death – Diabetes remains the seventh leading cause of death in the United States in 2015, with 79,535 death certificates listing it as the underlying cause of death, and a total of 252,806 death certificates listing diabetes as an underlying or contributing cause of death.


McGohan Brabender clients in our data analytics system spent over $26.3 million dollars on direct costs associated with diabetes.  That is 4 percent of total health care costs attributed to type 2 diabetes. Add to that another 27.5% associated with reduced productivity, for a total of nearly $34 million dollars.  That is an average of almost half a million dollars per client spent on type 2 diabetes!

For McGohan Brabender clients, the average cost per diabetic patient for costs associated directly with diabetes and not including co-morbidities was $3,338.  This is an increase of 9.2 percent in cost per patient from the prior 122-month period.  There were 2.9 percent more members diagnosed with diabetes from the prior period, for a total of 7,880 members.  This equates to 7 percent of the population having been diagnosed with diabetes.


MB clients in our data analytics system spent a little over $17 million on diabetic prescriptions and supplies in the past 12-month period with an average cost per patient of $2,458.  And while this is a decrease of 1.6 percent in spend from the prior period, there was a 0.7 percent increase in the number of members using the diabetic drugs and/or supplies.  Reporting shows there are 6,954 members currently taking a prescription for and/or using supplies associated with diabetes.

While the cost of medication and supplies is expensive, it is vitally important that members take their medications.  As mentioned above, the associated risks of diabetes, including losing a limb, kidney failure, heart disease, eye problems and even death are far more expensive than the cost of medications.  We show an overall medication compliance rate of 60 percent for members within our data analytics system.  That means 40 percent of diabetics are not taking their medications.   That means 40 percent are at a greater risk for amputation, heart disease, kidney failure, blindness or even death.  Based on the risk scores of those non-compliant members, they are found to be 5 percent more expensive than compliant diabetics, mostly due to the expense of the complications associated with their diabetes.


Poor diet and physical inactivity contribute to the rise in type 2 diabetes, but we can stop it.  Prediabetes is a condition in which your blood sugar is above the normal range, but not yet high enough to be considered diabetes.  This is your warning sign – DANGER AHEAD.  And this is where it needs to be caught!  Prediabetes is an indication that you could develop type 2 diabetes if you don’t make some lifestyle changes.  More than a third of American adults—around 86 million—have prediabetes, and 90 percent of them don’t know it. Know your numbers:

  • Fasting blood sugar level from 100 to 125 is considered prediabetes
  • Fasting blood sugar level of 126 or higher indicates type 2 diabetes

People with prediabetes who make a lifestyle change can cut their risk of developing type 2 diabetes by as much as 58 percent.


Type 2 Diabetes Risk Factors

Much like the other chronic conditions we have discussed, most of the risk factors for type 2 diabetes include lifestyle decisions such as poor diet, excess weight and physical inactivity.  Take this quiz to find out if you are at risk for type 2 diabetes.

For employers, ensuring your members have an annual physical with their primary care physician is a first step in catching many chronic conditions including diabetes, before they become permanent.  Ask your McGohan Brabender account manager about the best ways to implement this idea.