A view from the Center

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Managing the costs of diabetes care

It is remarkable how common diabetes has become in the US, growing in prevalence from 4 percent of the population in 1980 to more than 9 percent in 2014.1 The ramifications of poor control of diabetes are also clear to many – both inside and outside of the health care system. When working on Medicare issues, I became aware of the terrible statistics around morbidity and mortality from end-stage renal disease, which usually starts with diabetes. Other awful consequences of diabetes can include loss of vision and circulation, leading sometimes to amputations. I have several colleagues at work who have type 2 diabetes. For one of them, it has limited his career choices – anything with an unpredictable schedule is out of the picture.

Diabetes is not only costly in terms of its potential effects on individuals’ health, but it is also expensive to care for. As we describe in a recent report from the Deloitte Center for Health Solutions, Turning the tide on diabetes management, the annual cost of diabetes – $245 billion – is one of the largest and fastest-growing economic burdens in the US.

Well-managed diabetes is costly, but poorly managed diabetes and its complications is much costlier:

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Many in the health care system recognize that some of the greatest opportunities for lowering the cost of care and enhancing outcomes are centered around The Chronic Care Model. Thus type 2 diabetes – one of the more prevalent and costly chronic conditions – is a common target for clinical and care management strategies. It also happens to be a condition for which there are a good number of quality measures, so organizations with strong clinical performance in managing diabetes will likely benefit from higher payments tied to quality.

In the not too distant future, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) may also speed the transition from fee-for-service toward new risk-bearing, coordinated care models. MACRA’s new payment systems – the Merit-Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APMs) will provide strong incentives to provide higher quality care for diabetes by paying a bonus to clinicians with better results and to encourage innovation in care management techniques that work to keep diabetes under control.

Because diabetes is a complicated and costly disease, many organizations are piloting strategies to better understand how to improve care for patients with the disease.  Deloitte researchers interviewed several leading organizations in diabetes prevention and care to identify what strategies they are undertaking.

What are these organizations trying and learning?

Many health care organizations and payers are providing incentives to physicians and other providers to invest in prevention and care management through value-based payment models. Many are also exploring strategies to deal with the impact of high deductibles for some patients. Many interviewees also said having an integrated or capitated system avoids the fragmented care that fee-for-service encourages.

Our interviews with experts from health plans and health systems that have high quality scores for diabetes care or are recognized for being diabetes centers of excellence found that experimentation falls into several categories, among them:

Clinical innovation: Many organizations are experimenting with clinical care model innovations and incorporating technology into their care management strategies. Shifting care from specialists (endocrinologists) to primary care or community health models is a common strategy. Some health systems are moving 80-90 percent of diabetes patients to this model. For the respondents, this strategy is driven both by a shortage of endocrinologists and a recognition that since type 2 diabetes is a condition heavily influenced by lifestyle and behavior, it makes sense for primary care and community health providers to play a major role in managing the disease.

Other areas for innovation could include screening and management of depression, an important factor in effective care management and use of technology for disease management. Deloitte’s 2015 Survey of US Health Care Consumers showed that 74 percent of consumers with major chronic conditions are very interested or somewhat interested in monitoring technologies for health issues. Interviewees said that many of their patients and members like to organize and visualize their health data and many patients with diabetes like being able to track their numbers, manage their risk factors, and use reminders.

Patient engagement: Some organizations are partnering with patients and using technology to help patients make lasting changes to their diet, activity level/exercise, and disease management. One example of a patient engagement strategy designed to increase healthy behaviors or medication adherence is motivational interviewing. This involves practitioners finding out from patients their health goals, reviewing trends in A1C levels and other biometric data, and linking to decision aids and other tools to elicit and later remind patients of their goals.

Financial incentive alignment: Value-based care payment can offer health plans and providers strong incentives to invest in strategies like these – strategies that work to reduce spending for caring for this condition and improve outcomes.

As a society, we also should tackle the underlying causes driving this condition, which often results from poor lifestyle choices. That may require a partnership among many stakeholders – both within and outside of the health care market.

1Data from Centers for Disease Control and Prevention, National Center for Health Statistics, Division of Health Interview Statistics, data from the National Health Interview Survey. Statistical analysis by the Centers for Disease Control and Prevention, National Center for Chronic Disease Prevention and Health Promotion, Division of Diabetes Translation.

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Author bio

Sarah is the managing director of the Center for Health Solutions, part of Deloitte LLP’s Life Sciences & Health Care practice. As the leader of the Center, she drives the research agenda to inform stakeholders across the health care landscape about key trends and issues facing the industry. Sarah has more than 13 years of government experience and has deep experience in public policy, with a focus on Medicare payment policy.