EXCESS COSTS OF MEDICAL-CARE FOR PATIENTS WITH DIABETES IN A MANAGED CARE POPULATION

OBJECTIVE - To estimate the excess costs of medical care for patients with diabetes in a managed care population and to determine the propor tion of costs spent on treating the complications of diabetes. RESEARC H DESIGN AND METHODS - A comparison of 1-year (1994) costs of medical care in the 85,209 members of the diabetes registry of Kaiser Permanen te, Northern California, and in 85,209 age-and sex-matched nondiabetic control subjects. Costs were obtained from automated program database s. Costs specifically related to treating acute and long-term complica tions of diabetes were identified, and the excess costs attributable t o each complication in individuals with diabetes were calculated. RESU LTS - Excess expenditures in individuals with diabetes totaled $282.7 million, or $3,494 per person. Per person expenditures for members wit h diabetes were 2.4 times those for matched control subjects. The larg est proportion of total excess costs was for hospitalizations within t he health maintenance organization (38.5%). Nearly 38% of the total ex cess was spent treating the long-term complications of diabetes, predo minantly coronary heart disease and end-stage renal disease. CONCLUSIO NS - Diabetes is a costly condition by Virtue of its high prevalence a nd high per person costs. A large proportion of these costs are relate d to treating complications of diabetes. Available evidence indicates that several measures can reduce complication rates. Thus, effective d isease management programs that aim to prevent complications could pot entially lead to cost savings in managed care settings.