A population health approach to diabetes costs

2022 Q1 Rx Newsletter

March 30, 2022

Diabetes is the most expensive chronic condition in the United States.

34 million Americans—just over 1 in 10—have diabetes. $1 out of every $4 in U.S. health care costs is spent on caring for people with diabetes. According to the Centers for Disease Control, $237 billion is spent each year on direct medical costs and another $90 billion is lost to reduced productivity totaling $327 billion as the total annual cost of diabetes. The total economic cost of diabetes rose 60% from 2007 to 2017.1

Given the strong prevalence and devastating economic impact of diabetes as a disease, it is considered an epidemic. Diabetes is a chronic disease behind global health care challenges, which highlights the need for population health management. Through population health management, providers and health care organizations may be able to improve the quality of life and reduce the cost of diabetes care.

What is population health?

Population health is defined as “the health outcomes of a group of individuals, including the distribution of health outcomes within the group.”2 It is determined through multiple factors beyond clinical care, including, but not limited to social determinants. Because population health is person-centered, data can be leveraged to implement solutions based on each person’s risk status. This facilitates the development of risk-level-appropriate clinical and psychosocial management pathways and interventions.

How a population health approach can drive cost savings in diabetes management

There is a range of personal, economic, environmental, and social factors that affect diabetes health outcomes and this data can be used as a tool to drive cost savings. For example, data can be leveraged to stratify risk levels allowing the allocation of resources to those most in need.

A local hospital system in North Carolina collaborated with a health insurer to implement a population health program geared towards diabetes costs. A population health approach to diabetes emphasizes elements like being proactive instead of reactive, a value-based care system, paying for quality rather than paying for volume, and stratifying populations by risk.

The program showed how pharmacists can use data to enhance value-based care efforts; according to a case study presented at AMCP Nexus 2021.3  Through analytical reports, pharmacists were able to translate data into savings through strategies like identifying opportunities to move patients to more affordable, clinically equivalent medications; prescribing more affordable and effective combination therapies; and implementing real-time benefit checks. The program found $36,800 in savings by transitioning to a more affordable, clinically equivalent alternative medication. The initial savings projection of $64,509 shows there are still opportunities to implement further education and real-time benefits checks.


  1. “Cost-Effectiveness of Chronic Disease Interventions”, Centers for Disease Control and Prevention, accessed February, 22, 2022, https://www.cdc.gov/chronicdisease/programs-impact/pop/diabetes.htm
  2. Kindig, D, Stoddart, G. What is population health? Am J Public Health. 2003;93(3):380-383 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1447747/
  3. “Population Health Drives Cost Savings in Diabetes”, Pharmacy Practice News, accessed February 22, 2022, https://www.pharmacypracticenews.com/Operations-Management/Article/01-22/Population-Health-Drives-Cost-Savings-in-Diabetes/65881