OBJECTIVES:

Care for people with diagnosed diabetes accounts for more than a fifth of health care expenditure in the United States, and the American Diabetes Association estimated that the economic costs of diabetes increased by $71 billion (41%) to $245 billion during 2007 – 2012. While, hospital inpatient care drives the majority of health care spend, limited insight exist into how type 2 diabetes (T2D) patients utilize health care services across care sites. A better understanding of the actual care pathway and costs of T2D patients is essential to optimize care redesign initiatives.

This study aimed to compare utilization and costs for different cohorts of T2D patients across care settings.

METHODS:

This study was a cross-sectional analysis of Medicare claims data from 195,409 fee-for-service T2D beneficiaries aged ≥65 years from the 5% random sample of Medicare beneficiaries in 2014. The diabetes complications severity index (DCSI) was used to assign comorbidity conditions.

RESULTS:

Patients with a primary or secondary diagnosis of diabetes were on average three-fold more likely to utilize inpatient and hospital outpatient services than non-T2D patients. The average annual cost per T2D beneficiary (versus non-T2D beneficiaries) was higher in the majority of care settings (with the exception of the physician office) including the hospital outpatient ($29,159, 5.9-fold), inpatient ($185,435, 10.7-fold), skilled nursing facility ($105,083, 8.0-fold), home health ($35,609, 4.1-fold) and hospice ($39,150, 8.6-fold). Number of comorbidities dramatically increased overall costs in the T2D cohort with 67% of overall expenditure from less than 25% of patients with 2 or more comorbidities.

CONCLUSIONS:

Medicare beneficiaries with T2D incur significantly higher Medicare expenditures compared with unmatched non-T2D patients across all care settings except the physician office. Frequency of comorbidities is a major driver of higher expenditures and care redesign programs should involve care management targeting high-risk patients with multiple chronic conditions.