Economic Burden of DiabetesBuilding Perspective for the

Corporates Industrialists

Sanjeev KelkarConjoint Faculty

The University of NewcastleAustralia

Congratulations to Dr Kayathri!Proud of a Colleague

Setting new rules for the old gameEmpathy, Empowerment, EducationDemystification, Helping patient take

charge of his illness, putting him in driver’s seat to make decisions, support,

take him as a partner in coping with diabetes

Compared to Normal Population ---

A person with diabetes carries 17 times more risk for blindness,

more than 50% of all those who are on dialysis, in ICUs,

getting amputated in leg are due to diabetes

carry a 4 times higher prevalence of hypertension

Congratulations to Dr Kayathri!Proud of a Colleague

Diabetes takes all this and more, that is why and where the challenge lies, Each one is affected, each has to

contribute, come together to contain the menace and the epidemic

And there are huge costs

Costs X numbers X number of complications make staggering numbers

Let us have a look at it.

Economic Burden of Diabetes in India

Grateful Thanks to Anil Kapur

Vice Chairman World Diabetes Foundation

Copenhagen, Denmark

Top Countries with Diabetes

Temporal Prevalence in Urban South India

5.0

8.2

11.6

14.2

R2 = 0.9971

0

2

4

6

8

10

12

14

16

18

20

1988 1992 1996 2000

Kudremukh

Chennai

Chennai

ChennaiBangaloreHyderabad

Ramachandran A et al

Six Cities

National Urban Diabetes Survey

 

 

Total 11, 216 M : F 5288:5928Prevalence %

N Crude Age-std n Crude Age-std Total 1631 14.4 14.0 1684 13.9 12.1Men 776 14.6 14.0 813 13.8 12.5Women 855 14.3 14.1 871 14.0 11.9

IGT DM

National Urban Diabetes SurveyDiabetologia 44: 1094-1101;2001

National Urban Diabetes Survey Diabetologia 44: 1094-1101;2001

Wild et alDiabetes Care 2004; 27:1047-53.

Age Specific Prevalence

2.3

7.6

17.9

27.7

31.1

27.2

11.614.3 15.5 14.8

16.6

20.2

0

5

10

15

20

25

30

35

20 - 29 30 - 39 40 - 49 50 - 59 60 - 69 >69

DMIGT

Age groups (years)

%

India

Global

Lifestyle in Transition

Diabetes Mellitus- Genetics

Risk of Diabetes

- F/H/O Diabetes- One parent diabetic- One parent diabetic and

other from a diabetic family

Family History

20 %40 %

70 %

V Mohan & KGMM AlbertiV Mohan & KGMM AlbertiInternational Textbook of Diabetes Mellitus,1992,178.International Textbook of Diabetes Mellitus,1992,178.

• Family history significant predictor of Diabetes

Demographics

Age Groups

0

25

50

<15 15-30 30-45 45-55 55-70 >70

Current Age Distribution

Mean Age at Onset of Diabetes 43.6 ± 12.2 (n= 2251)Mean Diabetes Duration 10.0 ± 6.9 (n= 2251)

Diabetes Complications In Relation To Diabetes Duration

60%

35%29%

64%

32%19%12%

5% 4%4% 2% 2%2%

<5y5-10y>10y

Foot Eye MI Stroke ESRD

n=480n=626n=901

Persons with Diabetes Use Higher Health Care Resources

Rendell et alArch Intern Med 1993

% o

f Tot

al

0

4

8

12

16

25-35 36-45 46-55 56-65

Age Group

% of Total Population with Diabetes

% of Total Charges Attributable to Diabetes

CODE 2: Effect of complications on per patient costs

0

1

2

3

4C

ost i

mpa

ct fa

ctor

None Microvascular Macrovascular Both

Without complications With complications

1.7 X 2.0 X

3.5 X

Lucioni C et al. PharmacoEconomics- Italian Research Articles, 2000 2(1):1-21

None Microvascular Macrovascular Both

Mean Expenditure Per Hospitalization (INR)16565

9888

13200

7668

12781

0

2

4

6

8

10

12

14

16

18

Overall Type 1 Type 2 No Comp 3+ Comp

CODI Study

Proportion of Average Overall Costs – CODE 2

Antidiabetic drugs

7% Ambulatory18%

Other drugs21%

Hospitalisation55%

Quality and Complexity of Care, Costs for People Who Are Ill

DIABETES IS RISING HIGH AND RIDING HIGH ON COMPLICATIONS

Why diabetes?

• Diabetes is the central paradigm of non communicable diseases just as

• Tuberculosis is the central paradigm of communicable diseases

• If we improve quality of health care for both a large improvement in related health areas will occur

Why diabetes?

• Diabetes control has inescapably got tied with control of cholesterol and fats, Blood Pressure and coronary heart disease,

• Offers protection to retina, kidney and foot, lessens thereby the burden of cerebrovascular disease

• Tuberculosis cannot be dealt with without important structure – function changes in the health care delivery system

Why Costs Go High?

• Delayed diagnosis – 5 to 7 years• Up to 50% having some tissue damage at

diagnosis – UKPDS• Team approach lacking, slack controls,• Graduate and post graduate curriculum

inadequate in content and time• Multiple disciplines of medicine converge on diabetes

Why Costs Go High?

• Health Care Delivery Structure vis a vis capability to deal with non communicable diseases, requires

a different mind set• Spiral of upward pressure builds from the level of

maximum number and limited quality at periphery• Strong referral channels between primary, secondary and

tertiary care could mitigate the problem• Second level capabilities addressing 95% of illness at

provincial level satisfactorily – the most crucial link is missing

Cost Effective High Quality Solutions

• Common sense, common place restructuring / orientation of public health care delivery

• Intelligent, non demotivating regulation of private sector, particularly on quality assurance and wastes of huge money

Issues in SL

Evolving new roles • between the central and the peripheral

areas during the transition period• between the private and the public sectors. These transitions result may cause• sub optimal utilization of funds, • affecting the internal distribution of

resources, also foreign donations.

Issues in SL

• For example, foreign donors eager to upgrade the rural health care delivery system have provided expensive equipment to rural hospitals

• Operational systems do not improve• Functional efficiency does not improve

Glaring issues in SL

• Mismatch on expertise in the rural areas for maintaining or running this equipment, it remains unused.

• Prevalence of pertinent disorders vis a vis the capacity and standing expense of these equipment in rural areas

Glaring issues

• Supply driven health care offers – mismatch between the real need and suitable measures answering them

• A number of large health care projects, some of which are in the planning process, create waste which,

Socio Economic Factors

• Lack of awareness in patients & doctors• Population in rural area – Law of inverse care applies 1. quality and poverty, 2. distance from the first competent care level,

time to reach it in time• SL has a good track record at primary care level,

could be strengthened

Costs of Managing Diabetes

• Regular monitoring of diabetes and its complications

• Drugs, hospitalizations, surgeries, • Foot problems – dressings, vascular

surgery, rehabilitation after foot salvage surgery, loss of income, change in the job/employment

Costs - rising in future

• In next 20 years costs of treatment will escalate; a rising affluent class may foot it out of pocket but

• the majority will find it more and more difficult to meet it o o p

• mechanism to meet costs has to be developed, one way is insurance

• has benefits, may make adequate social impact in preventing debilitating complications

Currently available financial supports for diabetes

• Self expenditure • Insurance• Charity• Public Sector Healthcare • Employer reimbursement

Two Thirds of Healthcare Spending is out of Pocket,

0% 10% 20% 30% 40% 50% 60%

PP

PC/NC

OP

PHC

PHC : Public Clinic /Primary Health Care CentresOP : Other Private – includes both qualified and others PC/NC : private Clinic / nursing homePP : Private PractitionerSource: CII –McKinsey & Company, Healthcare In India: The Road Ahead, CII and McKinsey & Company, New Delhi, 2002, p. 38.

Social Health Insurance

WHO Study Group on "Evaluation of Recent Changes in Financing of Health Services concluded that "There are no private health insurance markets at all. When they do exist, they are guilty of "Cream Skimming".

Social Health Insurance

• The insurer excludes the very people most in need of protection - the poor, the elderly and the unhealthy".

• Private health insurance is, therefore, not a viable option for healthcare financing in Sri Lanka. 

Social Health Insurance – Model

• Prepayment or contribution. Payment is made regularly irrespective of whether services are used or not; 

• Pooling of funds;• Cross-subsidizing; • Sharing of risks. 

Social Health Insurance – Model

• Most beneficial – universal contributions made statutory.

• A financial source separate from general tax revenue, • Services supplied utilizing the existing infrastructure • Sufficient control vested in the ministry of health to

safeguard the poor and to control cost escalation.

ROHAN JAYASURIYA, Department of Public Health and Nutrition,University of Wollongong Australia

Health Insurance / Schemes in IndiaBeneficiaries (in Million)

• State Insurance Scheme (ESIS) 25.3• Health Insurance (private sector non-life

companies) 0.8• Health Segment of Life Insurance Companies

(public and private) 0.23• State Sponsored Schemes<0.50 • Mining and Plantations (public sector) 4.0• Health Insurance (public sector non-life

companies) 10.0

Health Insurance / Schemes in IndiaBeneficiaries (in Million)

• Central Government 4.3• Railways 8.0• Defence Employees 6.6• Ex-servicemen 7.5• Employers run facilities/reimbursement private

sector 6.0• Employers run facilities/reimbursement public

sector<8.0• Community Health Scheme 3.0• Total 85.0

Proposed Financial Supports

• National Rural Health Mission – the Community Health Center based model

• Talks of public private partnerships, of user fees

• Under automatic criticism of left wing

Health Insurance – Schemes Proposed

• Community based insurance schemes Definable geographic locations• Trade Based insurance, eg weavers,• Toying with Universal Health Insurance –

part subsidy by the central government

Health Insurance – Schemes Proposed

• Third Party Administered schemes – defined protocols,

expense limits for indoor care, provider beneficiaries connected, cashless at the point of service,• Severs payment service connections, TPA

decides on the exactitude of management• Mixed opinions on workability

Health Insurance

• Limited Coverage, operative in only the organized sector of economy

• The concern is the unorganized sector in a still dominantly agro based economy in SL

• Majority Schemes do not cover preexisting diabetes,

• Major Private health Insurance companies not active players

Health Insurance

• Quality of services• Purposes for which used - leave,

getting prescribed • Final run off still to privateers• Overall sub-optimality with islands of

excellences

Create Public-Private Partnership.

ModelsOptions Successful Examples

Contract out Services Contract out non-clinical hospital service (e.g., catering, laundry)Contract out clinical hospital services (e.g. radiology, pathology

::

Karnataka: Cleaning, maintenance and waste management contracted out in 82 hospitals.Tamil Nadu: High technology services in major teaching hospitals contracted out.

Private Management of Public Facilities

Private management of primary facilities.Private management of public hospitals.

::

Tamil Nadu: Management of PHCs by corporate houses with large presence in the area.Gujarat: PHCs in one district managed by SEWA.

Source: CII –McKinsey & Company, Healthcare In India: The Road Ahead, CII and McKinsey & Company, New Delhi, 2002, p. 183.

Components of current available financial supports

• Charity – potentially a non self fuelling way of solving health care issues

• External funds, loans etc

Prevention is the keyScientific evidence of

studies in cost benefits of prevention

Costs & Benefits• Potential economic benefits of lower-extremity

amputation prevention strategies in diabetes.Ollendorf DA, Kotsanos JG, Wishner WJ, Friedman M, Cooper T, Bittoni M, Oster G.Policy Analysis Incorporated, Brookline, Massachusetts, USA.

• The total potential economic benefits (discounted at 5%) of strategies to reduce amputation risk ranged from $2,900 to $4,442 per person with a history of foot ulcer over 3 years.

• Benefits were highest for educational interventions. • Most benefits were found to accrue among individuals aged

> or = 70 years.

Cost benefit in prevention

• Team approach toward lower extremity amputation prevention in diabetes

• RG Frykberg Harvard Medical School, Beth Israel Deaconess Medical Center, Boston, MA, USA.

Cost of prevention are more likely to prevent higher costs of treatment

among veterans.

Cost benefit in prevention

• Primary Prevention – Nice to talk about, fashionable, unattainable,

• Establish a Gym for your employees and measure the utilization

• Industry may become a part of a nationwide campaign?

• Well tested models available, electronic media underutilized

Role Corporates Could Play

• As employers – Insurance, reimbursement, promoting good practices,

• Discharging Corporate Social Responsibility, contributing skills,

• Data generation on what exists and needs remedied

• Adopting parts of HCDS,• Funding Health Campaignes

THANK YOU

Industry & Insurance• As employer sponsored insurance, the

cornerstone of US health Care• Medical professionals employees of health

care organizations of insurance companies• Part of pay packet, negotiable• Non Taxable as income to the workers• US$ 1180/- per covered employee, or $188.5

billion (NEJM, July 6th and 13th 2006 Bloomenthal

Employer Offered Insurance• Only 66.8% non elderly healthy working adults

covered• Retirees getting much less covered• Cost escalation to 16% GDP in 2004 in US• Balance between cash wages and benefits dependent

on net profits of the business; gets linked to the fortune of private business

• Finally Health Insurance passed on to the employees• Millions of working citizens uncovered• Political will could do better in US

New Products from Insurance

• Aimed at cost containment• Paying for performance (UK)• Disease-management initiatives• Health saving accounts• Consumer directed health plan• Tiered payment systems

New Products from Insurance

• New mechanisms focus on patient safety and quality of care

• ie, more evidence based, more protocol based care• Still does not effectively lower costs across the

board nor improve quality• Employers cannot innovate on health care

practices, low, scattered numbers, change in leadership, sale, mergers, low success on coalitions among employers, lack of internal expertise,

Government Offered Insurance

• In industrialized countries health coverage relates to tax revenues from businesses

• Varies with the performance of the units• Other social mechanisms may come in

Glaring issues

• Through a combination of foreign donor ignorance of key features of Sri Lankan health care delivery system

• And a lack of public and accountable decision making procedures in Sri Lanka, have resulted in waste of foreign donations

Glaring issues

• Ethical issues arising in a mixed health care delivery – public and private

• Minimum obligatory health package the government is obliged to give

• The role private sector (should) play(s)• Element of competition – User fees• Equitable health care delivery .

• IS COMMUNITY DIABETES WORKER A SOLUTION?

• Going back to the PHC profile with an additional new task

• Separate cadre arising out of NGOs, • Problems of self sustaining mechanism• Second level back up is a fundamental need

grossly inadequately answered in Public Health System

Currently Available Health Care

• Public Sector Health Care – PHCs archaic, non evolving invariant

model, • Huge task profile vis a vis woefully limited

capacity, Unmotivated, • Needs scrapping, out of tune with changing

economic states of people, and disease management requirement

• Lacks competent second level care back up

Analysing Glaring Issues

• Statistics on the use of private funds for health care; a normative analysis of private-public provision of health care

• Descriptive analysis of the problems of private-public interaction in health care;

Major Challenges • The population is aging, • Ageing population• Non-communicable diseases in adults - diabetes 5% of SL

adult population; • Heart disease, cerebro-vascular disease 3 to 4 times more

common than non diabetic population, • Burden of complications as already shown• Combined mortality of Diabetes and heart disease 24%, • (accidents, suicides, etc %, CVD %, Cancer %)

Components of current available financial supports for amputation prevention

• Employer reimbursement – varies with the health of the business, has procedural / conceptual confusions, eg. nature of packages, choice of facility,