Chapter 3: Diabetes in Canada: Facts and figures from a public health perspective – Health system and economic impact

Chapter 3 – The health system and economic impact of diabetes

Introduction

In addition to the major impact of diabetes on individuals (Chapter 2), on a population level, treating and managing the disease and its complications also lead to an increased burden on the health care system and the national economy. Individuals with diabetes require a variety of health services, mainly to treat and manage their disease, but also for the diagnosis and treatment of associated complications. This chapter provides an overview of the burden of diabetes on the health care system and attempts to estimate the costs of diabetes in Canada.

Health service utilization

Diabetes management often involves the use of services from a range of health care providers, including family physicians, medical specialists, nutritionists, diabetes educators, and psychologists. In 2008/09, adults aged 20 to 49 years with diabetes saw a family physician about twice as often as those without diabetes (Figure 3-1), and a specialist two to three times more often (Figure 3-2). As expected, visits to specialists were even more frequent among children and youth (aged one to 19 years) with diagnosed diabetes. This group visited specialists four times as often as young people who did not have diabetes (Figure 3-2). This is likely a direct reflection of the specialized care recommended for children with diabetes (Chapter 5). The sex difference in the rate ratios, particularly in women of child-bearing age, is due to the fact that females without diabetes tend to visit family practitioners more often than males.

Figure 3-1. Rate ratios of visits to family physicians among individuals aged one year and older, by age group, sex, and diabetes status, Canada^†, 2008/09

† Data for Quebec were unavailable.

Source: Public Health Agency of Canada (July 2011); using 2008/09 data from the Canadian Chronic Disease Surveillance System (Public Health Agency of Canada).

[Click to enlarge Figure 3-1]

Figure 3-2. Rate ratios of visits to specialists among individuals aged one year and older, by age group, sex, and diabetes status, Canada , 2008/09

† Data for Quebec were unavailable.

Source: Public Health Agency of Canada (July 2011); using 2008/09 data from the Canadian Chronic Disease Surveillance System (Public Health Agency of Canada).

[Click to enlarge Figure 3-2]

Hospital services can be required to treat diabetes when glycemic levels are particularly unstable or when complications lead to acute events. In every age group, individuals with diagnosed diabetes stayed more days in hospital than those without diabetes.^{Footnote 1} In 2006/07, the average length of stay in hospital for younger adults with diabetes (aged 20 to 54 years) was four to six times the number of days stayed by individuals without diabetes. Even after age 65, the average length of stay for individuals with diabetes remained 1.5 to 2.5 times greater than those without diabetes. In 2008/09, the proportion of individuals hospitalized at least once during the year was almost three times higher among those with diabetes than among those without (Figure 3-3). Hospitalizations in children and youth with diabetes were almost seven times higher than in children and youth without diabetes.

Figure 3-3. Rate ratios of hospitalizations^† among individuals aged one year and older, by age group, sex, and diabetes status, Canada, 2008/09

† Refers to at least one admission to hospital during the fiscal year.

Source: Public Health Agency of Canada (July 2011); using 2008/09 data from the Canadian Chronic Disease Surveillance System (Public Health Agency of Canada).

[Click to enlarge Figure 3-3]

Economic costs of diabetes

The total economic costs of diabetes are generally divided into direct and indirect costs (Figure 3-4). Direct costs are those associated with health care paid for by public or private health insurances or by individuals and their families. Indirect costs are the non-health care costs that impact the economy and individuals when productivity is loss due to sickness, disability or premature death.

Figure 3-4. Components of total, direct, and indirect costs of diabetes

[Click to enlarge Figure 3-4]

Limitations of economic data

Capturing all the relevant costs of a complex chronic disease like diabetes is challenging. Studies using a variety of methods yield different estimates, not only due to variance in methodology, but also because their samples are typically limited to specific populations.^{Footnote 2} Although the medical billing systems of provinces and territories can be used to estimate the direct costs of health care services, they do not reflect all the relevant and important health services provided for those living with diabetes. For example, diabetes education and nutrition counselling are often provided by non-medical health professionals who are paid through global budgets or private systems. Estimating the indirect costs of a chronic disease such as diabetes is particularly difficult because of the widely varying dollar amounts assigned at the individual level for such things as lost productivity and premature death.

However, the most important limitation to the assessment of the economic costs of diabetes is the lack of recent data. The most comprehensive and recent estimates available when this report was written are based on data that are 11 years old. Attempts to inflate costs to year 2011 Canadian dollar values would not adequately reflect the changing patterns and costs of health service utilization and disease treatment, nor the increased prevalence of diabetes, and therefore would not accurately represent the current costs of diabetes.

Total costs of diabetes

Data from the Public Health Agency of Canada's Economic burden of illness in Canada (EBIC) 2000^{Footnote 3} provide a conservative estimate of $2.5 billion in year 2000 CAD for the total cost of diabetes, excluding cost associated with diabetes complications. Further to this, because individuals with diabetes are at an increased risk of developing other chronic diseases, factoring in a proportion of the costs incurred to treat these related illnesses, conditions, and complications would result in a larger share of health care costs incurred in a population with diabetes.^{Footnote 4} According to a study conducted in 1998, the total costs of diabetes were 3.6 times higher when the costs associated with long-term complications of diabetes (including neurological disease, peripheral vascular disease, cardiovascular disease, kidney disease, and eye disease) were included.^{Footnote 5} Given the strong association between cardiovascular disease and diabetes, cardiovascular-related care alone was found to account for about a quarter of the total health care costs of individuals with diabetes.^{Footnote 4Footnote 5}

Direct costs of diabetes

Direct costs include hospitalizations, drug therapy, physician and emergency room visits, and out-of-pocket costs for supplies and treatment. At the national level, EBIC 2000^{Footnote 3} estimated that the total direct health care costs of diabetes were $769.4 million in year 2000 CAD, for the primary management of diabetes only. Taking into consideration the direct costs of caring for other general medical conditions and complications of diabetes, direct health care costs may be as much as 4.5 times higher than when looking at diabetes alone.^{Footnote 5}

At the individual level, a study estimated annual per capita health care costs to be three to four times greater in a population with diabetes than in a population without the disease.^{Footnote 6} Annual per capita health care costs for type 2 diabetes were found to account for approximately 96% of the total health care costs for all cases of diabetes (both type 1 and type 2) due to the fact that the majority of diabetes cases in Canada are of type 2 diabetes.^{Footnote 7}

With the aging of the population living with diabetes and an expected increase in long-term complications, the proportion of average per capita health care costs for managing and treating complications, especially costly procedures such as dialysis^{Footnote 8Footnote 9} and eye conditions,^{Footnote 5Footnote 10} is likely to increase over time. Moreover, Canadian studies have not yet considered costs associated with mental health, despite the high prevalence of depression in individuals with diabetes, and the fact that individuals with both diabetes and depression are known to require more health services.^{Footnote 11Footnote 12}

Direct costs by disease progression

A study based on Saskatchewan data has shown that annual health care costs for individuals with diabetes rise significantly in the first year following diagnosis, decline in the following year, then show minor increases over time (Figure 3-5). The initial spike indicated that costs almost tripled in the first year after diagnosis, likely reflecting hospital care needed in response to the initial diagnosis of type 1 or type 2 diabetes. The minor increases over the years reflect increases in the costs attributable to medication required for the treatment of diseases, day surgeries and dialysis.

Figure 3-5. Annual per capita health care costs of diabetes cases diagnosed in 1992^†, Saskatchewan, 1991 to 2001

† The Canadian Chronic Disease Surveillance System diabetes case definition was applied to administrative databases in order to identify incident diabetes cases in 1992. Per capita health care costs (in year 2001 CAD) were estimated one year before the identification of the incident cases (1991) and for ten years afterwards (1992 - 2001).

Source: Public Health Agency of Canada (2011); adapted from Johnson JA, Pohar SL, Majumdar SR. Health care use and costs in the decade after identification of type 1 and type 2 diabetes: A population-based study. Diabetes Care. 2006;29:2403-2408.

[Click to enlarge Figure 3-5]

Direct costs by cost category

Hospital care accounts for the largest proportion of the total per capita direct health care costs of diabetes.^{Footnote 6Footnote 7} At the national level, according to EBIC data, hospital costs attributed to diabetes were valued at $350.1 million, medication spending at $246.4 million and physician care costs at $172.9 million in year 2000 CAD.^{Footnote 3}

Other personal out-of-pocket expenses

Some expenses fall to individuals or families living with diabetes, such as the costs of medication and testing supplies. These expenses are difficult to estimate, and very little has been published on this subject. While some of these expenses may in part be covered by provincial or territorial drug plans,^{Footnote 13Footnote 14} programs for individuals living with disability, other social protection programs, or personal insurance plans, the Canadian Diabetes Association/Diabète Québec estimates that an individual with type 2 diabetes can face direct, annual out-of-pocket costs averaging $2,300 in year 2010 CAD.^{Footnote 15}

Indirect costs of diabetes

The indirect costs of diabetes are those related to short- and long-term disability and lost productivity due to illness or premature death. EBIC 2000 estimated that indirect costs of diabetes amounted to $1.7 billion in year 2000 CAD. More than $1.0 billion was attributed to premature death and $671.7 million to long- and short-term disability directly related with diabetes.^{Footnote 3} However, EBIC 2000 did not take into account the indirect costs of complications, which are the main causes of disability and premature death for diabetes. Due to this limitation, this study presents an underestimation of the total indirect costs of the diseases and its complications. In coming years, indirect costs of diabetes could become even more important as more Canadians are being diagnosed at an earlier age (Chapter 1, Diabetes incidence), which may imply that the indirect costs due to loss in productivity will increase.

Looking ahead

Expenditures on hospitalizations, medications, diagnostic services, physician services and other out-of-hospital health services are generally higher in a population with diabetes than in a population without diabetes. Out-of-pocket expenses and lost productivity due to illness, disability and premature death are also generally higher among individuals living with diabetes. While these cost figures for diabetes are already substantial, there is evidence that costs have, and will continue to, greatly increase in the coming years due to the increased prevalence of diabetes in Canada (Chapter 1, Diabetes prevalence) and the aging of the population.^{Footnote 4Footnote 16} However, the burden of diabetes on the health care system and the overall economy will increase beyond what can be anticipated from these two factors. Although diabetes in older populations may be a large driver of health care costs, treatment and management of diabetes comorbidities and complications – particularly cardiovascular disease – certainly represent one of the main contributors to costs. In addition, both the direct and indirect costs of diabetes may increase due to a trend toward earlier diagnosis of the disease (Chapter 1, Diabetes incidence). This implies longevity with diabetes, with potential impacts during the years spent in the workforce.

Reducing the prevalence of risk factors associated with diabetes, such as obesity, physical inactivity and smoking, would reduce the incidence of type 2 diabetes, and in turn, its associated costs.^{Footnote 20} Evidence also shows that complications of both type 1^{Footnote 17Footnote 18} and type 2 diabetes^{Footnote 19} can be reduced through intensive management (Chapter 2). Therefore, it makes economic sense to invest in effective multi-factorial strategies^{Footnote 21Footnote 22} early in the course of the disease to improve health outcomes and reduce future health care costs.^{Footnote 16} The Canadian Best Practices Portal highlights quality health-related programs designed with a population-health focus.

Cost estimates allow not only for better assessments of the relative cost-effectiveness of these interventions and strategies,^{Footnote 16Footnote 23} but also for better planning for anticipated future demands on the health care systems. To date, the undertaking of economic analyses has been limited by the lack of comprehensive and timely data on the costs of diabetes in Canada.^{Footnote 16Footnote 24Footnote 25} Overall, more work is needed in Canada to obtain up-to-date and precise estimates of the costs of disease. As one mean to address this gap in knowledge, EBIC data will be updated in an online cost estimation tool that will be available on the Public Health Agency of Canada website for public use.