Here's how much diabetes costs employers each year

Diabetes costs employers billions every year in both direct costs and indirect costs, as the disease impacts productivity and absenteeism, according to new data from Nomi Health.

The direct healthcare provider analyzed the costs associated with diabetes as part of its Trends in Spend Tracker, which uses claims data to identify shifts in healthcare spending. Nomi Health examined about 500,000 employer claims, and estimated that diabetes costs them $245 billion per year.

Of that, about $175 billion in annual spending is direct costs, such as medication and treatment. The remaining $70 billion is related to indirect costs, such as absenteeism, lost productivity and disability, according to the report.

“Diabetes is an urgent and costly epidemic that is only getting worse," Nomi Health co-founder and CEO Mark Newman said in the release. "As diagnoses skyrocket, so do the associated costs for both employers and patients."

"We must turn these spend insights into meaningful action,” he added. “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.”

Nearly half of U.S. adults have either diabetes or prediabetes, Nomi Health said, and, if current patterns continue, 1 in 3 could have diabetes by 2050. Costs associated with the disease are a growing concern for employers and other payers.

The study also found that costs for patients with diabetes are growing almost twice as fast compared to people who don't have the condition. Care costs for diabetics are growing at close to 20% year over year and topped $20,000 per member per year in employer costs for 2020-21.

Patients with diabetes also spend 240% more each year on medical bills and 450% on pharmacy than non-diabetics, according to the study.

And, these rising costs extend to comorbidities that diabetic patients may experience, according to the report. For example, employers spent 252% more on average for diabetics with kidney disease or ketoacidocis in 2020-21, on average $68,325 per member per year.