Prevention Makes Common "Cents". Diabetes


Diabetes is a group of diseases in which blood glucose (sugar) levels are elevated either because of failure to make adequate amounts of the hormone insulin or failure of cells to respond to insulin. Diabetes results from interaction between inherited, autoimmune, and environmental factors.

There are two principal forms of diabetes that account for the majority of cases.

  • Type 1 diabetes-often called "insulin-dependent diabetes mellitus" or juvenile-onset diabetes, develops when the body's immune system destroys pancreatic beta cells, the cells in the body that make the hormone insulin that regulates blood glucose. Thus the pancreas can no longer produce insulin. This form of diabetes usually strikes children and young adults, and requires them to take several insulin injections a day to survive. Type 1 diabetes may account for 5 to 10 percent of all diagnosed cases of diabetes. (65)
  • Type 2 diabetes-is sometimes termed "adult-onset diabetes" or "non-insulin dependent diabetes mellitus," even though some affected individuals require insulin for control of the disease. Type 2 diabetes usually begins as insulin resistance, a disorder in which cells do not use insulin properly. As it progresses, the pancreas gradually loses its ability to produce insulin. Type 2 diabetes often appears after age 40, although it is now being diagnosed increasingly in children and adolescents. This form of diabetes accounts for 90 to 95 percent of all diagnosed cases of diabetes.(66)

In addition, some women develop diabetes during pregnancy. This form of diabetes is called gestational diabetes, and affects 2 to 5 percent of all pregnancies. After pregnancy, 5 to 10 percent of women with gestational diabetes are found to have Type 2 diabetes and women who have had gestational diabetes are at increased risk for developing Type 2 diabetes in the next 5 to 10 years.(67)Other less common types of diabetes result from specific genetic conditions, surgery, drugs, malnutrition, infections and other illnesses. Taken together, these causes account for 1 to 5 percent of all diagnosed cases of diabetes.

The Prevalence of Diabetes

Diabetes affects a substantial proportion of the U.S. adult population. In 2000, it was estimated that 17 million people-6.2 percent of the population had diabetes.(68) This included 11.1 million people with diagnosed diabetes and 5.9 million people whose diabetes was undiagnosed. Of this number, 7.8 million were men and 9.1 million were women. One million new cases of diabetes in people aged 20 years or older are diagnosed each year, and diabetes was the 6th leading cause of death in 1999.

While increases in the prevalence of diabetes have been documented in the past, more research is needed to determine the extent to which the prevalence of diabetes is changing, and the factors that are contributing to such changes. Most research suggests that overweight and obesity, and lack of physical activity, are associated with an increased risk for diabetes. However, it is possible that an association between recent increases in the prevalence of obesity and overweight and the prevalence of diabetes may not be immediately apparent but only observed over the long term.(69)

Risk factors for Type 1 diabetes include autoimmune, genetic and environmental factors. Type 2 diabetes is associated with older age, obesity, family history of diabetes, prior history of gestational diabetes, impaired glucose tolerance, physical inactivity and race/ethnicity. African Americans, Hispanic/Latino Americans, American Indians and some Asian Pacific Islanders are at particularly high risk for Type 2 diabetes.(70)

Increasingly, health care providers are finding more and more children and teens with Type 2 diabetes, which is usually found in people over age 40. Although there are no national data, it is estimated that Type 2 diabetes represents 8 to 45 percent of all patients with diabetes currently diagnosed in large U.S. pediatric centers. However, this may represent an underestimate and the incidence may likely be rising. African American, Hispanic/Latino American, and American Indian children who are obese and who have a family history of Type 2 diabetes are at especially high risk.(71)The CDC has estimated that one in three persons born in the U.S. in 2000 has a life-time risk of developing diabetes, unless significant changes occur in patterns of eating and exercising, and that 39 million people in the U.S. could have diabetes by 2050.

The Effects of Diabetes

Untreated or poorly treated diabetes can result in death or significant disability, including heart disease and stroke, kidney failure, blindness and lower limb amputations. More than 60 percent of non-traumatic lower-limb amputations occur among diabetics. Diabetes is the leading cause of new cases of blindness for adults aged 20-74, and is the leading cause of treated end-stage renal disease accounting for 43 percent of new cases. Other complications of diabetes include: high blood pressure, nervous system damage, dental disease, complications of pregnancy, acute life threatening events caused by biochemical imbalances, and susceptibility to other illnesses and worse prognosis over the course of these illnesses.(72)

Union Pacific

Union Pacific's vision is to be the healthiest company in America. Over 27,000 employees have participated in Union Pacific's Health Risk Assessment and participated in follow-up programs when appropriate. Union Pacific's long-term wellness program goals include: continue decrease in lifestyle related health care claims, enhance employee productivity, improve employer relations and decrease injuries and absenteeism.

The Health Track Program includes a Health Risk Assessment, follow-up intervention programs which are stage based, a Smoking Cessation Program called Butt Out and Breathe, which includes a pharmacological assistance benefit, over 500 contracted Fitness Facilities across our system, an incentive program tied to the Company's incentive program and research study participation. Health Screenings, an occupational health nurse network in our major repair facilities and support of local management and Executive Staff of the Company facilitate the program.

Evidence of the program's cost-effectiveness include: over a 10% decrease in Health Care Costs due to Lifestyle Related Factors equating to a $53.6 million dollar difference in 2001; smoking prevalence at Union Pacific has dropped from 40% to 28% in the last 10 years; and Union Pacific has won a number of national awards in the last several years for its health programs.

To contact Union Pacific for more detailed information, see:

The Costs of Diabetes

A comparison of national cost estimates over time is difficult because of changes in the U.S. population and changes in the cost of health care services. The American Diabetes Association (ADA) estimated the national cost of diabetes in 1997 to be $98 billion.(73)  The ADA has updated this estimate for 2002 to $132 billion. This includes $91.8 billion in direct medical expenditures ($23.2 billion for diabetes care, $24.6 billion for chronic complications attributable to diabetes, and $44.1 billion for excess prevalence of general medical conditions.), with inpatient days, nursing home care and office visits making up the biggest expenditure categories by service setting. Indirect expenditures totaled $39.8 billion and resulted from lost workdays, restricted activity days, mortality and permanent disability due to diabetes. CDC research has shown that people with diabetes lost 8.3 days per year from work, accounting for 14 million disability days, compared to 1.7 days for people without diabetes.(74) The ADA study examined total U.S. expenditures for major health care services, including inpatient, hospital outpatient, emergency, physician office, nursing home, home health and hospice care, and determined that these services cost a total of $865 billion, and that $160 billion or 18.5 percent of this total was incurred by people with diabetes. Per capita medical expenditures totaled $13,243 for people with diabetes and $2,560 for people without diabetes. When differences in age, sex, and race/ethnicity are adjusted for, people with diabetes had medical expenditures that were 2.4 times higher than expenditures that would have been incurred by the same group if they had not had diabetes.(75)

There are no known methods for preventing Type 1 diabetes. Research studies have found that lifestyle changes, such as altering diet, increasing moderate physical activity and lowering body weight by 5 to 7 percent, can prevent or delay the onset of Type 2 diabetes. (76) Studies have also shown that medications have been successful in preventing diabetes in some population groups.

Figure 4. Total Cost of Diabetes

Figure 4.Source of data: Ref. 73.

Once diagnosed, effective management of diabetes is key to preventing its complications. Controlling glucose, blood pressure and blood lipids reduce health risks. Preventive care can also reduce eye disease, reduce the risk of amputation and allow for the early detection and treatment of diabetic-related kidney disease. The American Diabetes Association reports that people with diabetes who control their disease by keeping their blood sugar down cost employers only $24 a month, compared with the $115 a month for people with diabetes who do not control their blood sugar.(77)

Numerous studies have found that disease management programs have substantial benefits for people with diabetes, in terms of improving health outcomes and the quality of life.(78)  Particular interventions are associated with improved outcomes. Screening and timely intervention with laser photocogulation reduces the incidence of severe vision loss as a consequence of diabetes and has been called cost-effective. According to a 1996 study, the currently recommended screening and treatment for eye disease in persons with diabetes cost $1,757 per life-year of sight saved or $3,190 per quality-adjusted life year gained (1990 dollars).(79) Similarly, yearly foot exams for high risk patients, which have increased dramatically in the past decade, reduce the risk of lower extremity amputation.(80)

Health plans and providers are increasingly looking to disease management programs as a means for improving care and controlling costs. The American Association of Health Plans reports that virtually all health plans now offer at least one disease management program.(81) Often these programs focus on diabetes. For example, Cor Solutions Medical, a privately held disease management contractor, works with diabetics, primarily over the phone, answering questions, reminding them of routine medical appointments and helping patients manage their disease. Its CEO states that its approach cuts the cost for caring for a diabetic by up to 20 percent per month, while improving rates of diagnostic testing and annual foot exams.


The goals of Caterpillar's Healthy Balance Program include: motivate positive change in modifiable health risk behaviors; reduce health risks, improve long-term health status; promote self-efficacy and informed decision-making; reduce healthcare and related costs; achieve exceptional participation via strong incentives. The program has a high participation and retention rate: 93% of incented employees and 62% of spouses. Key features of the Healthy Balance Program include: strong incentives; top-down management support; spouses included; continuous evaluation/improvement. Components of the program include: both demand reduction and behavior change components; low-cost confidential health assessment; personalized health education messages; stratification: low/high risk, periodic assessment based on risk; individualized interventions, targeted to health risks and readiness-to-change; intensive high risk/chronic condition interventions, including disease management phone counseling; serial tracking, ongoing monitoring/adjustment of interventions; coordination with related interventions (on-site classes, referral to community programs, etc.); self-care book and quarterly newsletters; toll-free health information line and audio library; Internet website with links to sites with scientifically validated information; and ongoing evaluation of claims, health assessments; communication of summary results to employees.

Caterpillar predicts that the Healthy Balance Program will lead to long term savings of $700 million by 2015. To date, the program has reduced the aggregate health risk score by 6% for the "low-risk" population and 14% for "high-risk" subjects. This decline in aggregate risk represents improvement in major risk factors: physical activity, cigarette smoking, stress, fat and fiber consumption, etc. Participants who completed the high-risk program reduced their doctor office visits by 17%, and hospital days by 28%.

To contact Caterpillar for more detailed information, see:

Despite growing evidence that diabetes disease management programs result in improved health outcomes, opportunities exist to improve the effectiveness of these interventions. A disease management program typically is a bundle of services, designed to improve the care delivered and compliance with recommended treatments and behaviors. Because of the multi-pronged approach, it is challenging to disentangle the value of each component part of a disease management program.(82)

In addition, measurement issues are also challenging since diabetes is a disease whose natural progression is to worsen over time. That said, one study suggests a payback on investment within 33 months but calls for further study prior to major implementation.(83) Other studies are more cautious, although they find substantial benefits in terms of health outcomes over time. A 2003 study examined the business case for diabetes management programs in two managed care plans and quantified the health benefits for participants in a diabetes disease management program over 10 years at $31,000 per patient in terms of length and quality of life.(84)

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