Economic Report - "Type 2 Diabetes: Managing for Better Health Outcomes"

Summary

In 2000 Diabetes New Zealand Inc commissioned PricewaterhouseCoopers to develop an economic model that projected implications of three different service delivery scenarios. The three scenarios were for current service delivery, enhanced services and more optimal services.

The results of the study suggested that by implementing more services, which will prevent or better manage diabetes, the health outcomes for those with diabetes or the propensity for it, will improve. Further, the net cost to the taxpayer for diabetes funded services will be less over the next twenty years than it otherwise would be.

PricewaterhouseCoopers estimates that current services for diabetes cost the taxpayer $247 million for 2001/02. If current services are kept at similar levels, with current gate keeping and rationing approaches, the estimated costs of diabetes will be over a billion dollars each year by 2021 in current dollar terms).

This is because the projected increase in the numbers of people developing complications such as blindness, limb amputation, dialysis requiring hospitalisation, if the total health appropriation remained the same (adjusted for inflation), diabetes services will account for approximately 12% of total health spending by 2021.

PricewaterhouseCoopers projections indicate that the total cost of diabetes can be reduced over 20 years if existing services are increased as soon as possible. Under the enhanced services model, if the budget is increased by $10 million each year, with funding provided for specific and targeted services the outcome over 20 years is for an improvement in the health of a larger proportion of those with diagnosed diabetes. This improvement in health is likely to reduce complications so the savings from fewer severe complications in later years offsets the additional spending in earlier years.

When the amount of spending on more optimal services, both for those with diabetes and for those with the pre-conditions for diabetes, is increased by $40 million in the first year, the fall in health costs to the government are even greater. This result is surprising because the only way to ensure that the larger numbers are treated is to increase the amount of contact time of those using the health services. Despite the large increase in primary services, education, prevention, research and monitoring costs, the average annual cost to the government is projected to fall over the 20 year period because of the decline in more costly complications through better screening programmes leading to better management of blood glucose levels.

Key Recommendations

The following recommendations suggest that the Ministry of Health to have greater accountability for personal and public health for people with Type 2 diabetes, should have:

  1. More appropriate, affordable, accessible services for people with Type 2 diabetes
  2. More resources for the implementation of a fully funded public health strategy focusing on diabetes prevention and education
  3. A screening programme to be set up to identify undiagnosed Type 2 diabetes
  4. National registration to be established
  5. More research, auditing and monitoring of effective service delivery
  6. An increase in the number of diabetologists

Conclusion

Most of the complications of diabetes are able to be delayed and some may be prevented. Services designed to seek improved outcomes through prevention and self-management are not only likely to raise awareness but could lead to improved health well-being. They are likely to save direct costs over the medium-term and certainly into the longer-term.

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