Federal Spending on Diabetes: An Opportunity for Change
The federal government spent $79.7 billion more in 2005 to treat those with diabetes and care for its complications than it spent for those without diabetes—12 percent of total federal health care spending nationwide. A significant share of this spending is potentially avoidable, to the extent that diabetes and its complications can be prevented.
Mathematica completed a study of federal spending patterns on diabetes and examined how to improve returns on federal investment in this area by leveraging dollars to create synergy across efforts that influence diabetes prevention and treatment. This study differed from many previous efforts in that it sought to go beyond traditional efforts to examine the direct and indirect effects of such efforts on federal spending. We worked with Novo Nordisk's National Changing Diabetes Program to accomplish the following:
- Constructed a logic model by building on the well-established literature on the epidemiology of diabetes and what is known about preventing diabetes and limiting its progression or negative outcomes. The logic model was used to identity federal programs and policies that have the potential to influence at critical points the progression and human and fiscal costs of diabetes.
- Identified ways in which federal policy and programs could influence the progression of diabetes at points in the logic model. Reviewed the missions, programs, and budgets of each department of the federal government to identify activities that may influence risk factors for diabetes, diabetes itself, and the complications that result. From this review, estimated federal diabetes spending (excluding tax effects) using two methods—(1) traditional cost-of-illness methods to estimate the additional amount that the federal government spends to treat those with diabetes compared to those without, and (2) budget analysis techniques to estimate the total amount of federal spending for other diabetes-related purposes, including prevention and research. The latter estimates included both spending directly related to diabetes and other spending that is linked because of its influence on general risk factors for diabetes and many other chronic diseases, such as diet, nutrition, obesity, and physical activity. The estimates were for fiscal year 2005, the latest with detailed data.
- Reviewed federal websites and budget documents to estimate the diabetes-related costs in these programs.
- Developed a final report and briefing on the project results.The report identifies ways for the federal government to take a leadership role in reversing the upward trend of diabetes by getting the most out of current spending in medical care programs, leading by example, effectively promoting the health of its workforce, and enhancing interdepartmental coordination to more effectively reduce the risk factors for and complications of diabetes.
"Study of Federal Spending on Diabetes: An Opportunity for Change" Full Report; Executive Summary; PowerPoint Presentation (June 2007)
"Study of Federal Spending on Diabetes: Summaries of Federal Government Agencies and Their Relevant Activities" Working Paper (January 2007)
"Federal Medical and Disability Program Costs Associated with Diabetes, 2005" White Paper (September 2007). Provides a focused look at the construction of the $79.9 billion estimates of medical and disability costs that were included in the main study.