Case Study: The Cost Of Diabetes

An employee can help reduce the cost of health cost by doing several things. There has been an outcry from organizations due to the rising number of competitors with high expenses catering for health benefits during employment periods and on retiring. The employee can be of great help by being participative in the programs set by their employers to benefit more from other advantages far from health costs (Kerzner, 2013). Some of the choices an employee may consider to help control health costs are by boosting consumerism, use technology to manage benefits, and indulge in fitness and health programs.

The high dispersion of diabetes, especially through the aging population, comes at a considerable economic cost. Health care expenses for individuals with diabetes are 2.3 times greater than expenses for those without diabetes, and diabetes complications account for a significant amount of those cost.

The rate of diabetes in the United States is one of the highest compared to other developed countries. An estimate of 9.3% of the population have diabetes, of those with diabetes 27.8% have yet to be diagnosed (Centers for Disease Control and Prevention [CDC], 2014). This means that approximately 8.1 million people are currently living with diabetes, but are unaware of it. As of 2012, 12.3% of people with diabetes were 20 years old or older, the largest population diagnosed with diabetes were adults 65 years old or older. 25.9% of this population lives with diabetes (CDC, 2014). On a national level, the CDC have launched initiatives that focus on prevention and disease management. The National Diabetes Prevention Program is an example of one such initiative. This program focuses on lifestyle changes,

Allow employees to register for company-sponsored classes and programs to help them manage their weight, reduce stress, stop smoking, and manage other health

Costs incurred in the management of diabetes can be categorized as either direct or indirect, direct being the costs incurred in the management of the disease through medication, laboratory tests, physician and nursing care. Indirect cost, on the other hand, includes the cost of incurring a loss of productive individuals since the disease is associated with high mortality and morbidity. Over time the cost of management of diabetes has been rising with the increasing number of new cases of the disease. The cost of care for instance in 1980 ranged between 14 and 20 billion dollars. However, in 2002 the cost had increased to $132 billion, while the cost of managing the disease in the year 2007 was estimated at $174 billion in the United States

Type II Diabetes is a growing disease that according to Ley, Ardisson Korat, Qi, Tobias, Cuilin, Lu and ... Hu (2016) approximately 415 million adults are affected by this disease worldwide and in the United States in 2015, $348 million dollars was spent on treatment for

Diabetes affects over 180 million people in the US and is projected that by 2025 this figure will increase to 300 million.

The average health care spending of an American citizen was estimated to be $8,915, with $2.7 trillion total spent on health care, in 2012 (3). In addition, out-of-pocket spending on health care also imposes an economic burden. The total estimated cost of diagnosed diabetes in 2012 was $245 billion, including $176 billion in direct medical costs and $69 billion in decreased productivity. Decreased productivity includes costs associated with people being absent from work, being less productive while at work, or not being able to work at all because of

General motors have a great wellness program that keeps their workforce healthy. They use a program called LifeSteps which helps employees identify controllable health risk.

need for increased understanding of the economic, and societal seriousness of diabetes and its complications, and of the escalating costs to individuals, families, workplaces, society and governments.

In the vending machines all sorts of dried nuts and fruits can be found. For those employees who would like to lose weight, the company offers to pay the membership fee for the gym. With these type of helpful gestures employees will certainly stay healthy. “Companies are expected to spend an estimated $7,720 per employee this estimate is up from the $7,211 a few years ago according to NBGH. With health-care costs expected to continue to rise and cash-strapped employees less able to shoulder more premium increases, employers face a dilemma.”(Marshall P.53)

Employers are implementing policies requiring employees to adopt a healthier lifestyle as not doing so can cause a significant increase in cost to the company and the employee. Companies will often offer a monetary incentive to motivate employees to change their habits, which reduce benefit cost while increasing employee performance and company commitment.

In this era of increasing awareness and concern about the exorbitant cost of healthcare, employers have begun to apply cost-mitigation strategies to reduce the total costs of their employee health insurance policies. Some of the more typical approaches include establishing general policies and formal plans to reduce healthcare expenses, such as by promoting employee participation in their optimum health. Many employers now provide financial incentives such as by rewarding employees for participating in health awareness surveys and for signing up for health management plans. In principle, the purpose of these mechanisms is to raise health consciousness and motivate employees to participate more directly in their own health management to reduce the cost necessary to treat unmanaged diseases that could have been prevented or addressed earlier in their course of development. Many employers are also encouraging their employees to take advantage of the lower-priced consumer directed health care (CDHC) plans that both provide additional incentive and allow individuals to help control the costs of their health care services by saving the funds remaining in their annual funds at the end of the year.

Research indicates that employers can increase employee retention, increase employee productivity, and reduce employee healthcare costs by implementing a workplace wellness program.

In the article, there are six options what company can do to help their employees to stay healthy and at the same time cut their costs.