March 14, 2023
Employers’ cost of care for diabetics goes up 20% every year; someone new is diagnosed every 21 seconds
OREM, Utah (March 14, 2023) – Diabetes costs U.S. employers approximately $245 billion a year — more than double what the entire American automotive industry is worth, according to new data announced today by Nomi Health. Employers spend more than $175 billion annually on direct medical and pharmacy costs for diabetic members, in addition to nearly $70 billion on indirect costs from employee absenteeism, reduced productivity and diabetes-related disability, the research showed.
As part of the Nomi Health Trends in Spend Tracker — a series using claims analysis data to call attention and action to key shifts in healthcare costs — Nomi Health analyzed nearly half a million employer health insurance claims to reveal changes in employer spend on diabetes.
“Diabetes is an urgent and costly epidemic that is only getting worse. As diagnoses skyrocket, so do the associated costs for both employers and patients. We must turn these spend insights into meaningful action,” Nomi Health Co-founder and CEO Mark Newman said. “From making insulin covered as a pre-deductible preventive medication to supporting diabetic employees with tools to help manage their disease, employers can help bend the cost curve and make a real impact.”
According to the American Diabetes Association, nearly half of U.S. adults have diabetes or prediabetes, and someone new is diagnosed every 21 seconds. If current growth patterns continue, as many as 1 in 3 American adults could have diabetes by 2050, the Centers for Disease Control and Prevention warns.
Additional findings from Nomi Health’s Trends in Spend Tracker research include:
Cost of care for diabetics is increasing twice as fast as for non-diabetics, and it’s growing at a staggering clip of nearly 20% year over year, reaching more than $20,000 average per member per year (PMPY) for employers in 2020-21.
A diabetes diagnosis means higher costs for patients, too, who spend about 240% more annually on medical bills and nearly 450% more on pharmacy expenses than non-diabetics.
The high cost of diabetes extends to the chronic conditions associated with the disease, which often cost more than the diabetes itself. Care for diabetics with ketoacidosis or kidney disease in 2020-21 cost employers 252% above the average, or $68,325 average PMPY.
This retrospective cohort analysis was conducted by Artemis — a leading benefits analytics platform acquired by Nomi Health last year — and follows Nomi Health’s $5 million contribution last year to help nonprofit generic pharmaceutical company Civica accelerate the production of low-cost insulin in response to the crisis of skyrocketing insulin costs for Americans.
Nomi Health is a nationwide direct healthcare system making it easier than ever for any buyer of healthcare to access the highest quality affordable care for their communities. The company’s direct care ecosystem is enabled by technology, and encompasses a real-time operating and payment system — inclusive of analytics and payment rails — as well as an integrated care delivery infrastructure featuring essential care services, pharmacy and an open network. To date, Nomi Health has saved buyers of care an average of 30 percent compared to traditional healthcare costs, while enabling them to give their communities more access to lower-cost, high-quality care.
From rural counties to some of the largest cities in America, Nomi Health has administered everyday healthcare services to more than 14 million Americans and counting in hundreds of communities nationwide. During COVID-19, this direct care model played a pivotal role in care access, public health and keeping economies open and operating.
Based in Orem, Utah, Nomi Health employs more than 2,000 nationwide, working to lower healthcare expenses, widen care access and improve the patient experience. The company is led by an experienced, cross-functional leadership team with clinical, healthcare, technology and finance backgrounds. Nomi Health has so far invested more than $10 million dollars in improving the well-being of the communities it serves. Visit us on Twitter @NomiHealth and www.nomihealth.com.
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