Medical costs of managed care in patients with type 2 diabetes mellitus

The main objective of this study was to analyze the principal treatment cos t drivers in patients with type 2 diabetes mellitus in a managed care setti ng. The study used retrospective integrated (linked) medical and pharmacy c laims data for the calender year 1995. The data were obtained from, and in cooperation with, the Hawaii Medical Service Association, Honolulu, Hawaii. The medical claims data included paid claims for services and procedures f or diabetes and commonly associated comorbidities. Claims and associated co sts for pharmacotherapy administered to the patient population were recorde d in the pharmacy data. Patients aged greater than or equal to 65 years wer e excluded because Medicare claims were unavailable for the type 2 diabetic population. The sample used in this study included 5171 patients. An ordin ary least squares regression model was employed to identify principal cost drivers among the identified cohort to the managed care system. Independent variables in the analysis consisted of the presence or absence of a number of commonly observed comorbidities associated with diabetes mellitus (hype rtension, hyperlipidemia, cardiovascular diseases, congestive heart failure , renal disorders, retinopathy, neurologic disorders, and any cardiac or no ncardiac comorbidity combinations), pharmacologic therapy variables (insuli n, oral medication, or both), a number of significant events (hospitalizati on, dialysis, hemoglobin A,, testing, and eye examination), patient enrollm ent category (fee-for-service vs a capitated system), and patient age and s ex. The dependent variable was the natural logarithm of total medical costs of treatment for diabetes and commonly observed comorbidities. Results sho wed that among comorbidity variables, the 3 largest treatment cost drivers for patients with type 2 diabetes were the presence of neurologic disorders , renal disorders, and any comorbidity combination (cardiac or noncardiac o r both), in decreasing order of significance. Similarly, higher costs of tr eatment were associated with episodes of hospitalization, use of antidiabet ic medication, dialysis services, and hemoglobin A,, testing. Whether the p atient was being treated under a capitated provider payment system or a fee -for-service system did not have any significant impact on the medical cost s of diabetes-related treatment. Age was positively associated with these c osts, indicating that older patients were more likely to incur higher costs to the system. The overall explanatory power of the model was 40%. In summ ary, unless diabetes is properly managed and glucose levels monitored, some component of an integrated health system (hospital vs pharmacy) necessaril y bears financial risk. An understanding of the underlying cost distributio n for a chronic disease could help in targeting interventions, integrating disease-management services, and managing the formal structure of the healt h plan being considered.