What are the advantages for a society in ensuring access to insulin and improved diabetes care? To answer that question we have developed a model that helps us examine the socio-economic costs and benefits of diabetes and diabetes care.

Most people would agree that access to health is a precondition for societal prosperity. The benefits of access to health may outweigh the costs for two reasons: first, survival and improved health has an intrinsic positive value, and second, health improves the productive national capacity by realising a human and national potential that otherwise would be wasted through sickness or death.

For the individual, living with diabetes means that their ability to work, their quality of life, and their ability to prosper as a person, or as a provider for a family, is potentially limited, depending on the severity of the person’s diabetes and whether there are complications. From a societal perspective, a potential contribution to societal welfare from a productive person is lost.

The World Health Organization estimates that 9% of all global deaths are caused by diabetes, primarily among people in their most productive years. In countries where access to healthcare is available, the care of people with diabetes also entails significant costs to the health system. Hospitalisation and treatment of late complications (eg blindness, amputations and heart-related problems) due to poorly treated diabetes, are the main cost drivers. It is estimated that the costs of diabetes and its complications already account for
between 5% and 10% of total healthcare spending in most countries and up to 25% in others.

Treatment with insulin means that people with diabetes can lead an almost normal life and reduce the risk of disabilities and premature death. To people with diabetes, access to insulin improves their quality of life and their productivity. Their intellectual and emotional capacity, and that of their families, is no longer primarily focused on worries about health, but rather on more positive, forward-looking activities.

We are developing a methodology based on a case study of type 1 diabetes in Denmark that links the consequences of diabetes to costs and benefits associated with treating diabetes. The results presented here are part of a project Novo Nordisk is conducting with experts in epidemiology and health economics, Professor Anders Green and Professor Terkel Christiansen, associated with the University of Aarhus and the University of Southern Denmark. The results of the study will be published in 2003.

The benefits of diabetes care
(click to see table)

In this project we have designed a socio-economic diabetes model for a country’s prerequisites in terms of identification, diagnosis, treatment patterns and complications status caused by diabetes. The model is based on the Danish healthcare system with model data based on the clinical knowledge of medical experts and their estimates of the population of people with diabetes. The empirical medical data are from the Danish national hospital activity register.

The benefits are patient life years, quality of life and productivity gains. With regard to costs, we distinguished between the direct and indirect costs of treating diabetes. Direct costs are public healthcare costs of hospitalisation. These include routine GP visits, insulin, other medicines, blood glucose monitoring, education of patients and treatment
of acute and chronic complications, nursing homes and disability assistance. Other direct costs are the financial consequences for the patient through costs of transport, housing, family and childcare during visits to the hospital or GP, and costs of physiotherapy. In the calculation are also indirect costs related to foregone income due to absence from work during treatment.

The study presents the costs and benefits from diabetes treatment in Denmark during one year (2001). It is important to underline that these effects, measured in terms of patient lives and quality of life, build on 80 years of continuous improvement of the medical treatment and the general living conditions in Denmark.The first stage of the study focused on the costs for two scenarios. One in which treatment (insulin) is not available, and one where treatment is available and complications are treated, as in Denmark.

The economic cost of treating type 1 diabetes in Denmark during one year, ie the difference between the two scenarios, is estimated at DKK 1.1 billion. Approximately DKK 700 million or 50% of the total annual costs of the current treatment is related
to hospital treatment. When interpreting these conclusions, some reservations must be made. A sensitivity analysis is required to show how sensitive the results are to some of the
assumptions. Further, calculations have not included macroeconomic consequences of increased survival due to adjustments in the economy, for example net changes in the population, impact on employment, production and consumption.

We have chosen to measure the benefits of treatment as life years gained (avoided premature death) and quality of life. This can be expressed as an index: Quality Adjusted Life Years (QALYs). QALYs is a tool to incorporate the quality of life/well-being, in a health economic analysis. The QALY describes how a disease or a medical treatment
affects an individual’s life expectancy and quality of life.

One way to investigate the effect in terms of QALYs is to use the EuroQol questionnaire (EQ5D). It identifies the quality of life on a scale between 0 (death/worst imaginable health state) and 1 (best imaginable health state). A group of diabetes nurses have linked typical diabetes health states to the EuroQol descriptive states.

This case study showed that during 2001, 15,452 patient years were gained from the continuous long-term availability of insulin in Denmark for type 1 diabetes. Indeed, those gained life years have a value in themselves. Moreover, if the patient years above were transformed to QALYs, using the EQ5D, this would entail gains as well.

Of these 15,452 people, 80% are between 15 and 65 years old and in a physical condition that allows them to be able to work. Approximately 70% of the estimated treatment costs can be referred to this group.

Finally, we measured the effects in terms of productivity gains. This was estimated to be DKK 2.3 billion a year. It is a measure of the productivity gains resulting from the gained
patient years in scenario 2 compared to scenario 1.

This is a socio-economic benefit to the Danish society based on the assumption that the patients who are physically able to work would have the opportunity to work in the same capacity as the rest of the population (75% work force participation rate). The project will be further developed to look at type 2 diabetes for Denmark and to estimate the socio-economic costs of type 1 and type 2 diabetes for a developing country.

The private versus public costs depend on the national health costs reimbursement and benefits systems and differ between countries. In determining public health budgets it is necessary to foresee how much the public health sector will need and the equivalent taxes that have to be collected. Equally important is to ensure that all costs and benefits are taken into account regardless of who is bearing the costs. The socio-economic approach enables a comparison between countries and presenting a comprehensive ‘holistic’ picture of the cost to society of diabetes.

Prevention can reduce the societal costs of treating the complications of the disease. These include lifestyle modifications in terms of healthier food, more exercise, and less smoking as well as monitoring, screening, treatment and control of high blood pressure, raised blood lipids, blood glucose levels, sightthreatening eye complications and urinary protein excretion.

Prevention also entails intervention against early signs of chronic complications such as renal failure, heart disease and loss of visual acuity.

Insulin therapy in itself is not sufficient. There must be an adequate healthcare infrastructure
and a decision by the government to prioritise diabetes by allocating a sufficient budget.
The treatment of diabetes is expensive in terms of direct healthcare costs and competes for scarce resources with other societal needs both in and outside the health sector. In the
short term, more effective treatment with insulin increases costs, but in the long perspective it pays off. Studies have shown that after six to eight years there is a clear positive effect on the costs for complications.