Diabetes: Four steps to protect employers’ bottom line
One of the biggest health challenges facing employers today is diabetes. It’s a problem that’s destined to get more expensive as an increasing number of U.S. employees develop the chronic condition.
Diabetes is a significant drain on the nation’s businesses: The total cost of diabetes was $245 billion in 2012, which is the last time figures were published by the American Diabetes Association. This included $176 billion in direct medical costs and $69 billion in reduced productivity.
Another costly impact of diabetes is presenteeism, in which an employee shows up for work but is less productive due to an illness or a lack of motivation. According to National Medical Systems, Type 2 diabetes accounts for nearly 20 percent of presenteeism in the workplace.
At the individual level, those with diagnosed diabetes incur medical expenses of about $13,700 per year, which is 2.3 times higher than expenditures would be without diabetes. The disease is the 7th leading cause of death in the U.S., affecting 7.6 percent of non-Hispanic whites, 12.8 percent of Hispanics, and 13.2 percent of non-Hispanic blacks.
In practical terms, a typical company with 1,000 employees has 20 employees with known diabetes, four employees who have it but haven’t been diagnosed, and another 70 employees with prediabetes.
According to an article published by the Society for Human Resources Management (SHRM), ineffective diabetes management programs frustrate employers who recognize the problem but haven’t seen effective solutions.
What to do? Employers can minimize diabetes’ impact on their businesses by prioritizing treatment and prevention. Here’s how:
- Choose the right health plan. Not only should employers’ benefit plans help with supplies like test strips, meters and insulin, they should also utilize case managers who can help members prevent, or treat, complications. Ask potential carriers for comprehensive data and results before choosing a plan.
- Engage employees. Give employees a tangible reason to manage disease with a consumer-engaged health plan that rewards them for monitoring their A1c levels and addressing risk factors like obesity, inactivity, blood pressure and cholesterol. These plans motivate compliance with the “carrot” of saving money on premiums and out-of-pocket costs.
- Rethink primary care. Leverage the growing emphasis on patient-centered medical homes, which use a team-based approach to provide continuous, comprehensive medical care to maximize patients’ health. Innovative employers, like BMW, are even developing onsite primary care facilities at their workplace to make it easier for employees to monitor their health and control chronic diseases.
- Test. Act. Perhaps the biggest opportunity to control costs is by helping those with prediabetes understand their risks and avoid developing diabetes. Today, 9 in 10 people with prediabetes don’t know they have it. The American Diabetes Association and the Centers for Disease Control and Prevention (CDC) have joined forces to encourage employers implement a diabetes prevention program. Their helpful website includes a savings calculator for tallying the potential impact of the program.
Focusing on diabetes management and prevention means healthier employees, better productivity and lower medical costs, which all adds up to an improved bottom line.