Estimates of direct medical costs for microvascular and macrovascular complications resulting from type 2 diabetes mellitus in the United States in 2000

Estimates of Direct Medical Costs for Microvascular and Macrovascular Complications Resulting from Type 2 Diabetes Mellitus in the United States in 2000 Judith A. O’Brien, RN, BSPA,l Amanda R. Patrick, Jaime Caro, MDCM1>2

BS,l and

‘Care Research Institute, Concord, Massachusetts, and 2Division of General Internal Medicine, McGill University, Montreal, Quebec, Canada

ABSTRACT

Background: Diabetes mellitus is a chronic condition that affects the health of Americans and the US health care system on many levels. According to the American Diabetes Association, -16 million Americans have diabetes mellitus. The onset of type 2 diabetes mellitus, which accounts for the vast majority (90%-95%) of cases, precedes diagnosis by a mean 7 years, with the disease typically manifesting during adulthood. It is not uncommon for people to first realize they have diabetes mellitus due to the appearance of a related complication. Objective: The goal of this analysis was to estimate the direct medical costs of managing microvascular and macrovascular complications of type 2 diabetes mellitus in the United States in the year 2000. Methods: Complication costs were estimated by applying unit costs to typical resource-use profiles. A combination of direct data analysis and cost modeling was used. For each complication, the event costs referred to those associated with the acute episode and subsequent care in the first year. State costs were the annual costs of continued management. Data were obtained from many sources, including inpatient, ambulatory, and emergency department care databases from several states; national physician and laboratory fee schedules; government reports; and literature. All costs were expressed in 2000 US dollars. Results: Major events (eg, acute myocardial infarction-$30,364 event cost, $1678 state cost) generated a greater financial burden than early-stage complicaAccepted for publication December 13, 2002. Printed in the USA. Reproduction

Copyright 0 2003 Excerpta Medica. Inc.

in whole or part 1s not permitted.

0 149-29 I8/03/$I9.00

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tions (eg, microalbuminuria-$63 event cost, $15 state cost). However, complications that were initially relatively low in cost (eg, microalbuminuria) can progress to more costly advanced stages (eg, end-stage renal disease-$37,022 state cost). Conclusions: Given the scope of diabetes mellitus in the United States and its impact on health care and budgets, it is important for policy makers to have upto-date information about treatment outcomes and costs. The costs presented here provide essential components for any analysis examining the economic burden of the complications of diabetes mellitus. (Clin Thel: 2003;25:1017-1038) Copyright 0 2003 Excerpta Medica, Inc. Key words: costs, diabetes mellitus, microvascular, macrovascular, US, diabetes mellitus-related complications.

INTRODUCTION

Diabetes mellitus is a chronic condition that affects the health of Americans and the US health care system on many levels. According to the Centers for Disease Control and Prevention1 and the American Diabetes Association,2 -16 million Americans have diabetes mellitus. The onset of type 2 diabetes mellitus, which accounts for the vast majority (90%-95%) of cases3 precedes diagnosis by a mean 7 years, with the disease typically manifesting during adulthood.4x5 Thus, the seeds of serious sequelae are planted early and insidiously begin compromising many body systems, resulting in potentially life-threatening and disabling complications. It is not uncommon for people to first learn they have diabetes mellitus due to the appearance of a related complication. ’ Once diagnosed, the main objective of therapywhether it is diet and exercise, oral hypoglycemic agents, or insulin-is to achieve optimal glycemic control and mitigate the impact of its physiologic consequences by preventing or delaying serious complications. Complications at the macrovascular and microvascular levels have been linked to diabetes mellitus.2,6-1’ Diabetes mellitus is the leading cause of new blindness in adults. At diagnosis, 21% of patients with type 2 diabetes mellitus will have retinopathy2 In addition, -40% of new cases of end-stage renal disease (ESRD) and nearly half of nontraumatic lower-extremity amputations (LEAS) are caused by diabetes mellitus. 2,3~12-15Those with diabetes mellitus are 2 to 4 times more likely to suffer from heart disease or stroke,12 and heart disease has been implicated in 75% of diabetes mellitus-related deaths.2 Given these and other major complications, it is not surprising that the direct medical cost of the disease in the United States in 1997 was estimated at $44 billion.16 This is indeed a striking figure, but its very size can have a numbing effect on decision makers. To assess the role of new therapeutic regimens for dia1018

J.A. O’Brien et al.

betes mellitus, it is important to have a comprehensive understanding of the economic implications of diabetes mellitus; for a cost to be appreciated in practical terms, however, it must be expressed in a way that is meaningful to the decision maker. In a 1998 article,17 this was addressed by estimating the cost per patient of selected macrovascular and microvascular complications in a way that could be used by those interested in performing economic analyses of diabetes mellitus and its consequences. Because cost estimates become less applicable in a matter of a few years, the 1998 analysis has been updated and is presented here. The data are presented in a comprehensive manner so that researchers can examine the costs of all-or any-complications on a per-patient basis. MATERIALS AND METHODS

The goal of this analysis was to estimate the direct medical costs of managing microvascular and macrovascular complications of type 2 diabetes mellitus in the United States in the year 2000. These costs are meant to reflect the economic value of the resources consumed, regardless of who actually pays for them. Thus, they do not take into account adjustments made in the multipayer US system, such as copayments, reimbursement rates, or volume discounts. By implication, then, the perspective is broader than that of any individual payer and more akin to that of a comprehensive single-payer system. The macrovascular complications considered in this analysis were: acute myocardial infarction (AMI), angina pectoris, ischemic stroke, and transient ischemic attacks (TIAs). Nephropathy, retinopathy, symptomatic neuropathy, LEAS, and foot ulcers comprised the microvascular complications. Episodes of hypoglycemia were also examined. For the purpose of this analysis, only hypoglycemic events that generated expense because of the use of formal care services were included. The methodology and format used for developing and presenting the cost estimates were unchanged from earlier articles. i7,18 The cost estimates were reported in terms of event and state costs. Event costs were those associated with resource use specific to the defining clinical event and included both acute care (initial management in an inpatient or outpatient setting) and subsequent eventrelated health care rendered in the first year. State costs reflected annual resource use required beyond the first year for the ongoing management of the given health state and would apply while that particular health state was present for the remainder of the patient’s life. All event and state costs reported for each complication were incremental to any recommended screening and prevention measures that took place as part of basic diabetes mellitus management, the costs of which were not included in this analysis. Episodic events were those that could occur more than once and were potentially reversible. Two complications fell into this category: foot ulcers and hypoglycemia. Given that these conditions are usually short term, only event costs were applicable. 1019

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It should be noted that this was not a cost-of-illness study It did not provide the total cost of all diabetes mellitus-related complications in the United States but, rather, the average cost of key components of 1 such episode of illness for each specified complication. No group of patients was followed up through all relevant levels of care. This could not be done based on available data. Rather, average per-patient total costs were estimated by applying unit costs to the likely course of treatment for each complication. Thus, it was necessary to build profiles that represented the typical management pattern of each complication. Three basic steps are required to build a cost estimate: identification, quantification, and valuation. Identification requires building a resource-use profile by determining which health care services are relevant for each complication. Quantification is achieved by identifying the frequency of use and the proportion of users for each health care service in the profile. Valuation requires applying a unit cost to each resource used. For this analysis, the resource-use profile began with the initial site of care for the acute event. For some conditions, initial inpatient care was assumed for all cases (ie, AMI, stroke, LEA). Figure 1 displays the cost components of the profile for those managed acutely as inpatients. For some complications (ie, angina, TIA, foot ulcer, hypoglycemia), patients can be treated initially as either inpatients or outpatients; therefore, separate profiles were established by type of care and then weighted to derive the overall event cost estimate (Figure 2). Only outpatient management was considered for other complications (eg, microalbuminuria, macular edema). To provide cost estimates for the various complications, it was necessary to take pertinent information from many sources (see next subsection). Citations relevant to specific complications are noted in the corresponding section. Because the focus of the analysis was on the cost of managing the complication and not diabetes mellitus itself, references to both type 1 and type 2 diabetes mellitus were considered. Cost Sources Inpatient Acute Management

Discharge data from 5 states (ie, California, Florida, Maryland, Massachusetts, and Washington) 19-23 for all payers in 1998 were used to identify patients admitted for the targeted complications and to develop acute care inpatient profiles. A total of 1077 US hospitals contributed to this data pool. These databases contain merged discharge-level demographic, clinical, and economic data for all hospital discharges within a given year for patients of all ages. Data on age, sex, all diagnoses, length of stay (LOS), charges incurred, procedures, source of admission, and discharge disposition were abstracted for each patient. Patients with analysis-relevant complications were identified by a principal diagnosis code us1020

J.A. O’Brien et al.

I

I AMllStrokelLEA Cost Structure

Initial

Acute hospital I/

admission ,,,.___ ..._____ .._.____

,

care

//

j ( Readmission“) 1 : for same j :----I I event within j (._ first year ,I

.___.______..._____,’

Postacute

c

Outpatient care

r

Meds

(Hoypi Figure

(

Day care

1

I. Cost components for the year in which the complication event occurs, where all treatment

is initially as an inpatient. AMI = acute myocardial infarction;

LEA = lower-extremity

amputation;

MD = physician; Meds = medications;

SNF = skilled nursing facility; ICF = intermediate

care facility.

ing International Classification of Diseases, Ninth Revision (ED-9) codes.24 Only patients with a secondary diagnosis code of diabetes mellitus were included in the analysis. For example, diabetic patients admitted primarily for AMI were identified by a principal ED-9 diagnosis code of 410.00-410.91 and a secondary ICD9 diagnosis code documenting diabetes mellitus (250.00-250.93). For some complications, cases were further classified by type of treatment and resource intensity using additional KID-9 procedure codes. The AMI group was subdivided into 4 inpatient groups: (1) those who had a coronary artery bypass graft (CABG); (2) those who had a percutaneous transluminal coronary angioplasty (PTCA) but no CABG; (3) those who had diagnostic coronary angiography but no CABG or PTCA during their initial stay; and 1021

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;rrrl SNF

ICF

_____‘-____-----\ I

Ist year

:

Readmission within

I I \

for same or related event or

I -_ ,

-_-__--_-__--_-__-__--_--_--_--_

procedure

\ -_____-__-__-__.

Figure 2. Cost components for the event year for those complications where some patients were treated initially as inpatients or outpatients.TIA

= transient isch-

emit attack; ED = emergency department; MD = physician; SNF = skilled nursing facility; ICF = intermediate

care Facility.

(4) those medically managed. This was done not only to differentiate the inpatient cost according to how the AM1 was managed acutely, but also to determine the postdischarge resource-use profiles. A patient who underwent CABG would require surgical follow-up postdischarge and would accrue the related costs, whereas other patients with AMI would not. This process was also followed for cases of angina. Those admitted for foot-ulcer care were subdivided into those who underwent surgical debridement during their stay and those who did not. If a patient with foot ulcer underwent amputation during the same stay, that case was excluded from the foot-ulcer group and reclassified to the LEA group. Acute care hospital costs include all accommodations, ancillary services (eg, pharmacy laboratory), and physician fees. Because physician fees are not included in the discharge data and are not reported in the literature in sufficient detail by 1022

J.A. O’Brien et al.

complication, it was necessary to develop an inpatient physician resource-use profile for each complication. Complication-specific physician care profiles were developed based on LOS, diagnosis and procedure codes, special care unit and emergency department (ED) use, surgical and anesthesia activities, consultations, and other pertinent physician-related database elements. Physicians’ Current Procedurul Terminology codes25 and Medicare national fee schedules for 200026 were used to represent average costs for physicians’ procedure and visit fees. Outpatient

Acute Management

ED2’ and ambulatory care databases,2s as well as data abstracted from government reports,29s30 national physician26 and laboratory fee schedules,31 and published articles (cited by relevant complication), were used to develop outpatient cost estimates. To identify relevant literature published after our previous analysis,l’ a MEDLINE search of the literature from 1995 to 2000 was performed using the terms diabetes me&us, costs, resource use, management, foot ulcel; LEA, AMI, stroke, TIA, blindness, complications, angina, neuropathy, and retinopathy. Costs derived from a single state’s database were adjusted to a national average using ratios based on published information from the Centers for Medicare and Medicaid Services (CMS),29 formerly known as the Health Care Financing Administration. Postacute Care Management

The disposition status of all survivors managed acutely as inpatients was examined to determine their initial postdischarge health care resource use. The proportional cost of continuing care for all major direct medical cost-relevant disposition categories (ie, routine outpatient care follow-up, home, home health care, skilled nursing care facility [SNF] , intermediate care facility [ICF] , rehabilitation) was calculated and included in the event cost. To determine the proportion of patients transferred to an SNF or ICF as a result of the complicationrelated admission, those who were admitted from a similar facility were not included in the calculations for those disposition sites. With the exceptions of stroke and LEA cases, it was assumed that all patients except those institutionalized permanently in an ICF would revert to outpatient care when their initial posthospital care (eg, stay in rehabilitation facility) was completed. To derive this proportional cost, a 12-month cost profile was developed for each subgroup whereby the cost of each type of postacute care was determined and applied to the proportion of patients using that service for the mean duration of time spent in that service. For patients managed acutely as outpatients, postacute care consisted mainly of follow-up physician office visits and any complication-specific monitoring tests (eg, electrocardiogram [ECG]). The costs of complication-relevant readmissions occurring within the first year after the index event were included in the event costs for AMI, angina, stroke, TIA, 1023

CLINICALTHERAPEUTIC

foot ulcers, and LEA. For example, admissions for unstable angina, AMI, coronary angiography, PTCA, or CABG were added to the event cost for AMI. Patient-level data were examined in the Massachusetts @&Q2* database to determine hospital readmission rates. Admission patterns were tracked by means of a unique patient identifier. Costs for postacute care were based on data and published information from the CMS, MA long-term care cost data and nursing home care reports, statewide rehabilitation hospital reports, MA rehabilitation hospital charge books, and provider survey data. 29,32-36Durable medical equipment and supply costs were derived from CM% national fee schedule37 and manufacturers’ price lists. Average wholesale prices (AWPs) from the 2000 Drug Topics Red Booh38 were used for outpatient medication costs. Fees for outpatient office visits, tests, and procedures were taken from the aforementioned national fee schedules.26,31 All event and state cost estimates are reported as costs in 2000 US dollars. Where up-to-date values were not available, older estimates were inflated using the Medical Care Inflation Index (a component of the Consumer Price Index)39 supplied by the Federal Bureau of Labor Statistics for January 1990 and 2000. Any charges (eg, inpatient hospital care) used as inputs were adjusted to costs by means of a cost-to-charge ratio. In the absence of a standard value, a ratio of 0.61 was used based on information obtained from the MA Division of Health Care Finance and Policy (written communication, January 1998). RESULTS

For several of the complications addressed in this analysis, hospital care was a major cost component. The mean acute inpatient hospital costs and LOS for those complications are shown in Table I. The event and state costs for all complications are provided in Table II. Macrovascular

Complications

Acute Myocardial Infarction

The total event cost for AM1 was estimated at $30,364. The overall mean hospital cost ($17,376) includes the weighted costs of those who had coronary angiography PTCA, or CABG, as well as those managed medically A CABG performed during the AM1 stay for a patient with diabetes mellitus raises the average cost of the hospital stay to $44,142. AM1 event costs also included preadmission ambulance/cardiopulmonary resuscitation care and all first-year subsequent care costs, including cardiac rehabilitation programs and cardiac-related medications (ie, beta-blockers, acetylsalicylic acid [ASA], angiotensin-converting enzyme [ACE] inhibitors, nitrates, calcium channel blockers), readmissions for AMIrelated problems and procedures, and visits to the ED for the proportion of patients requiring those services or medications. State costs of AM1 were calculated to be a mean of $1678/patient per year. These included the cost of medications, 1024

J.A. O’Brien et al.

Table 1. Acute inpatient hospital costs (including physician costs) and length of stay (LOS) grouped according to diabetes mellitus-related Principal Dx, ICD-9 Codes’

Cases, no.

LOS, mean, d

Total Cost, mean, $

4 l0.00-4 IO.9I 41 I.l,413.Wl3.9 433.x I, 434.0G434.9 I, 436 435.9 84. I Q-84. I7 84. I o-84. I7 707. I

28,550 7555 34,823 7625 6715 6715 2030

6.1 2.6 5.1 3.2 10.1 IO.2 6.9

17,376 5739 907 I 4837 17,555 I7,8 I3 8327

Complication AMI Anglna lschemic stroke TIA LEA I LEA 2 Foot ulcers Dx = TIA

dlagnosls;ICD-9

= transient

complication.

= International

ischemlc attack; LEA

Classification of Illseases, Ninth Revisron; AMI = acute myocardial

I = first lower-extremity

amputation:

LEA 2 = second

infarction;

lower-extremity

amputation. “U-9

codes refer only to principal diagnoses. Only patients wrth a comorbid

diagnosis of diabetes mellitus were

Included in the analyses.

physician visits, and monitoring cardiology tests (ie, ECG and stress test). This also reflects the annual nursing home care costs for the ~1% of diabetic AMI patients who require permanent institutionalization. Additional resource-use information was abstracted from the literature.40-54 Because some patients with diabetes mellitus who have other diagnosed vascular complications might receive many or all of the medications used in this profile before the occurrence of an AMI, we noted that the event and state costs would be reduced by a mean of approximately $1000 if outpatient medications were excluded from the resource-use profile for AMI. Angina

Angina-related event costs include acute hospitalization, invasive procedures, medications, primary and consulting physicians, diagnostic procedures, and laboratory tests. The costs of acute hospitalization ($5739) were applied only to those with unstable angina (24.6%), a proportion derived from the literature.55 When appropriately weighted outpatient management and postacute care costs were included, the angina event cost was calculated at $6024. This figure is higher than that previously reported ($2,477 in 1996),r7 not only due to the use of more current unit costs, but also because the current cost estimate was expanded to include readmissions within the first year for additional angina-related events and procedures, such as CABG, PTCA, and coronary angiography The state cost ($1556) for angina includes physician visits, medications, and monitoring cardiology tests.42,48,56 1025

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Table II. Event and state costs of nonepisodic diabetes mellitus-related

complications.

Event Cost,

State Cost,

2000 US $

US $, annualized

Complication Cardiovascular Acute myocardial infarction

30,364

I678

6024

1556

40,209

l3,4 I9

3874

142

Gross proteinuria

67

22

Microalbuminuria

63

Angina Cerebrovascular lschemic stroke Transient ischemic attack Nephropathy

ESRD

0”

I5 37,022

Retinopathy Macular edema

761

75

Proliferative

841

75

retinopathy

ot

Blindness

3686

Neuropathy LEA I

30,354

1091

LEA 2

3 1,226

ID+

372

ID+

Symptomatic

neuropathy

ESRD = end-stage renal disease: LEA I = first lower-extremity amputation: LEA 2 = second lower-extremity amputation. ‘Event costs were not calculated separately for ESRD as they are included in the composite state cost (see text). tNo

direct costs are attributable

%sufTicient

to this condition

as an event (see text).

data (ID) available to estimate cost (see text).

Stroke

The disabling consequences of stroke are reflected in the first-year management costs because many patients require continuing care services after they are discharged from the hospital. The mean event cost for ischemic stroke was estimated at $40,209 per person, with hospital care representing only 27% ($9071) of this cost. Of those who survived hospitalization, 35% of patients were transferred to a subacute care facility (ie, inpatient rehabilitation, SNF, ICF) and another 10% were referred for home health care services at discharge. The effect on costs of the increased need for care after stroke is clear when this proportion is compared with that for AMI, where acute care accounts for the majority (57%) of event costs. The mean annual state cost for managing a patient with ischemic stroke was estimated at $13,419. This cost reflects outpatient monitoring, ASA use, and the 1026

J.A. O’Brien et al.

increased need for day care, durable medical equipment, term care in this patient population.41,53,57,58

and permanent

long-

Transient lschemicAttack

In this analysis, TLA is considered truly transient: no permanent residual disability was considered. This assumption was supported by hospital discharge data because ~20% of TIA cases were referred for either subacute inpatient or home health care services. The TIA event cost of $3874 included the initial acute management cost weighted to accommodate those treated as inpatients ($4837) and those who were not admitted ($460), as well as subacute inpatient care, home health care, follow-up neurology visit, and daily ASA therapy.59 The state cost ($142) for TIA included physician visits and daily ASA therapy.41,60,61 Microvascular

Complications

Nephropathy

The following cost estimates applied after diabetic nephropathy was diagnosed. In this analysis, diabetic nephropathy was classified into 3 progressive levels of severity: microalbuminuria, gross proteinuria, and ESRD. Physician visits and monitoring urine tests were the main components of the event costs for microalbuminuria ($63) and gross proteinuria ($67). Only services32%62with measurable cost implications (ie, urine tests) were used to estimate the state costs of microalbuminuria ($15) and gross proteinuria ($22). Although the use of ACE inhibitors has been recognized as beneficial to patients with type 1 diabetes mellitus, it is currently recommended only for patients with type 2 diabetes mellitus who are hypertensive and have progressive albuminuria.63 Because it is possible that patients with diabetes mellitus-related renal disease may also have macrovascular complications for which ACE inhibitors may be prescribed, and because no data were available pertaining to the proportion of patients receiving this type of therapy solely for the purpose of preventing further renal deterioration, the cost of ACE inhibitor therapy was not included in the current estimate for this complication. 64 Depending on which dose and drug were used, the annual cost of ACE inhibitor therapy would add $110 (low-dose generic) to $2000 (maximum-dose brand name) to the estimate for a person receiving this type of therapy. ESRD is defined as nephropathy requiring dialysis or renal transplant for the patient to survive. In the United States, a special program under the direction of Medicare is responsible for reimbursing ESRD-related care for ~90% of those with this complication. Once patients become eligible for this program, all Medicare allowable health-related care is covered (rather than just care associated with ESRD).65 Using comparative data published by CM&29 it was possible to distinguish ESRD-related costs from overall health care costs for these patients. Based 1027

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on mean annual Medicare payment information for ESRD, a state cost of $37,022 was derived. Event costs were not calculated separately for ESRD because they were included proportionately in the composite described previously. Retinopathy

In this analysis, diabetic retinopathy is defined by 4 stages of progression: (1) nonproliferative retinopathy (background retinopathy); (2) macular edema; (3) proliferative retinopathy; and (4) blindness. The state cost ($67) of nonproliferative retinopathy consists of an annual comprehensive retinal examination to monitor the disease. There was no associated event cost for this usually mild form of retinopathy because there is no commonly accepted therapy for the condition other than improved glycemic control and continued monitoring.2 Screening for background retinopathy is considered part of basic diabetes mellitus management and, therefore, is not reported here. Diagnostic tests and laser photocoagulation are recommended for patients diagnosed with macular edema or proliferative retinopathy66 Event costs for macular edema ($761) included an ophthalmology consultation, fluorescein angiography, focal photocoagulation, and 1 postsurgical follow-up visit. Event costs for proliferative retinopathy ($841) consisted of pre- and postprocedure physician visits, color fundus photography, and panretinal (scatter) photocoagulation. Laser surgery and its corresponding costs were assumed to occur only once for patients diagnosed with macular edema or proliferative retinopathy The state costs for these conditions ($75) represented an average of 1.4 additional monitoring visits per year2* Blindness does not have an event cost because there is no event per se. Rather, the descent into blindness due to diabetes mellitus is the result of failure to either detect or treat retinopathy at an earlier stage. Unfortunately, little information exists regarding the annual cost of blindness. Thus, it was necessary to inflate the 1996 reported state cost l7 that was based on a previously published study of Medicaid and Medicare disability programs. 67 The state cost for blindness was $3686. Neuropathy

Symptomatic neuropathy, first LEA (LEA l), and second LEA (LEA 2) were the neuropathic complications included in this analysis. The event cost of symptomatic neuropathy ($372) was estimated based on the use of electromyographic testing and a comprehensive neurologic consultation. 68 Treatments for symptomatic neuropathy are palliative in nature, relieving painful symptoms of neuropathy rather than addressing the underlying nerve damage. Because no data were available to provide a representative medication profile, rather than an arbitrary profile of managing symptoms, no cost was assumed for the state cost for symptomatic neuropathy 1028

].A.O’Brien et al. Patients with diabetes mellitus have lower limb amputations at all levels (ie, toe, foot, below-the-knee, and above-the-knee amputation [AKA]). Thus, the cost for each type of amputation was calculated using the 5 state databases and then weighted by the proportion of diabetic patients who underwent that type of surgery to determine the overall event cost for an LEA. Furthermore, it has been reported that 50% of patients with diabetes mellitus who have an LEA will undergo a second one within 5 years. 69 Therefore, event costs for first and second amputations were calculated separately Proportions by level of amputation were used to differentiate between first- and second-amputation inpatient costs. Proportions of each type of amputation from the Rochester study were used for this purpose. 7o Not surprising 1y, the mean hospital cost of a toe amputation ($14,714) was less than that of an AKA ($18,775). This difference also extends beyond the acute phase of management due to the higher level of disability resulting from an AKA. Of those who survive hospitalization, disposition data reveal that half of toe-amputation cases receive subacute inpatient or home health care services versus 85% for AKA cases. Information regarding postacute care dispositions, rehabilitation, readmissions for debridement and major stump revisions, and use of prosthetic devises and durable medical equipment were obtained from the state databases, CMS reports, provider surveys, and publications.71-77 The event cost for LEA 1 was $30,354, increasing to $31,226 for LEA 2. The increase represents a shift to a higher anatomical (and thus more costly) level of amputation for the second amputation, as noted in the Rochester study.‘O LEA has consequences beyond the year of the surgery No published information was identified that could isolate ongoing annual direct management costs related to LEA versus usual management of a patient with diabetes mellitus. Thus, only costs directly related to the LEA (ie, long-term facility residential care and the management and refitting of the prosthetic device) were included in the state cost for LEA 1, which was estimated at $1091. To avoid double counting, given the cost components of the LEA state profile, the state cost of LEA 2 was conservatively assumed to be $0 because it was not possible to discern which prosthesisrelated costs would be specific to the second prosthesis versus costs already included in the state cost for LEA 1.78-80 Diabetic

Foot Ulcers For the purpose of this analysis, foot ulcers were defined as those that healed without amputation or vascular surgery. Acute inpatient hospital and postdischarge subsequent care costs were applied to only 17% of the diabetic foot ulcer population, 53,81-85because not all patients with foot ulcers required hospitalization. The event cost for all foot ulcers, based on the weighted cost of those treated as inpatients ($8327) versus those receiving only outpatient care ($16181, was estimated at $2900.

1029

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For those patients not hospitalized, an outpatient care profile was established based on state ED and ambulatory care data and published information.27~28~30~83,86 It was a conservative estimate in that it was not possible to identify all possible ulcer care regimens by the proportion of patients receiving them. Thus, the outpatient profile included the cost of ED and physician office visits, antibiotic therapy, foot and ankle radiographs, packing and debriding supplies and gauze dressing supplies,* and therapeutic footwear in proportion to those who used these services. Hypoglycemia

For costing purposes, an episode of hypoglycemia is defined as one in which the patient uses formal health care services, generating a cost. Three treatment levels were considered and weighted to form the overall event cost for hypoglycemia ($222). The mildest level was assumed to resolve with a glucagon injection, not requiring the attention of medical personnel. The moderate level was assumed to require an ED visit and ED consultation with a physician. The most severe level of hypoglycemia was assumed to require an inpatient stay plus 1 follow-up visit with the patients primary care physician. The proportions for those falling into each of these levels came from the Veterans Affairs Cooperative Studyl’ and the Diabetes Control and Complications Trial Research Group.87 Hospitalization costs ($5321) were applied to only 1% of the cases. The majority of the cases (71%) were categorized as mild. DISCUSSION

Given the potentially serious clinical consequences of diabetes mellitus, it is encouraging that new therapeutic agents to improve glycemic control continue to be developed. However, it is no longer enough to prove efficacy and safety for an agent to be widely adopted. Economic consequences should also be considered. In 1997, the American Diabetes Association estimated that the total cost of diabetes mellitus in the United States was $98 billion, 45% of which was attributable to direct medical care. l6 Much of that $44 billion spent on health care services was used to manage the complications of diabetes mellitus. Therefore, understanding the scope of these complications and their cost consequences is imperative to those who must make decisions regarding public health and private health care delivery systems. There is a growing connection between decision making, implementation of recommendations in clinical practice, and the cost of delivering adequate and appropriate care. 88 To make this integration of clinical and economic concerns viable, credible estimates of the costs of managing a disease and its sequelae must be available for use in economic analyses. The basis for these estimates must be ‘Trademark:

1030

Kerlix@ (Tyco Healthcare

Group LP, Mansfield, Massachusetts).

].A. O’Brien et al.

the cost of the resources consumed rather than the payments made in any given setting. Presented this way, they enable local decision makers to consider the modifications they feel are warranted for their setting. In many ways, developing a comprehensive cost estimate is much like assembling a jigsaw puzzle-with one notable exception: all of the necessary pieces of information are not neatly contained in one place. It is often necessary to acquire resource use and unit cost data from a variety of sources. Determining which sources to use is always a balancing act between relevance, credibility, and availability Given our purpose, they reflect all ages, payers, and relevant locations of care rather than more restrictive estimates that result from using data from a single insurer or managed care organization. 89,90 Cost estimates are influenced by limitations imposed by insurers or managed care organizations, such as age restrictions for coverage, benefit coverage as to site or level of care, or length of benefit coverage (eg, truncation of days in SNF). If claims data were used to create an estimate and the data available from a single insurer or managed care plan did not include all relevant care as part of the claims profile, the resulting cost estimate for those complications where that type of care is a substantial contributing cost factor (eg, nursing home care for stroke) would be an underestimation of the cost of that complication. In addition, some managed care plans may have initiatives targeting diabetes mellitus that influence resource use and, thus, the costs generated by requiring mandatory screening or intervention visits or by strongly influencing practice patterns of participating physicians.88 The estimates presented here have been calculated to provide as comprehensive as possible a picture of the costs attributable to the complications of diabetes mellitus by using a combination of direct data analysis (eg, hospital care) and cost modeling based on typical management profiles (eg, postacute care). The goal was to fill as many data gaps as possible. There are several limitations to this analysis. An inevitable one is that much of the data reflect costs from previous years. It is difficult to develop current comprehensive cost estimates because up-to-the-minute cost data are not available. It was necessary to use clinical practice guidelines (CPGs) where actual data were missing; this may overestimate resource use because CPG recommendations may not be adhered to in clinical practice. 88 Underestimation of costs may also be present due to a lack of data (eg, use of statins) and complication-specific CPGs. Furthermore, not all complications of diabetes mellitus (eg, autonomic neuropathy, diabetic cataracts) were included in our analysis. The AWP was used as the unit cost for any outpatient medication included in the analysis. Although the AWP may not be representative of the cost to most purchasers or users, it was selected as the reference cost to provide a common, understandable baseline from which a comparison can be made for a given circumstance. We chose this approach, rather than basing the analysis on any given 1031

CLINICAL THERAPEUTICS@

organization’s discounted rate, because such an estimate would not be representative outside that organization. Coding errors are another possible concern. Although an earlier study in Scotlandgl showed that diabetes mellitus was not coded as a comorbidity for patients with known diabetes mellitus in 60% of the records examined, later studies from the United States9* have reported a >90% accuracy rate in coding major macrovascular complications. Because the US health care system has become increasingly reliant on accurate coding for reimbursement purposes, it is unlikely that coding errors are as common as they were a decade ago. The coding error rate in the state databases for complications of diabetes mellitus is unknown, but for the purpose of this analysis, it is of concern only if there is a cost-relevant bias in the cases included. However, such a bias is unlikely because the data were not collected expressly for this purpose, or even for cost estimates in general. It should be remembered that the state costs, which are intended to represent the annual cost of management for any year subsequent to the event, do not incorporate any variations that may occur over time. However, patients with diabetes mellitus do not spend a lot of time in each health state, which reduces the impact of any time dependence. Finally, the analyses carried out here are largely descriptive-they do not examine the factors that contribute to a given complication being more or less expensive to manage (eg, smoking). Although an understanding of such factors would be very useful (particularly if they can be affected favorably), the data regarding them were insufficient for these analyses. CONCLUSIONS

Given the scope of diabetes mellitus in the United States and its impact on health care and budgets, it is important that those responsible for developing policy about new glycemic control agents have up-to-date information about treatment outcomes and costs. Health care is a dynamic domain, and the information available to researchers and decision makers alike should reflect that. The costs presented here provide essential components for any analysis examining the economic burden of the complications of diabetes mellitus. ACKNOWLEDGMENTS

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Address correspondence to: Judith A. O’Brien, RN, BSPA, Caro Research Institute, 336 Baker Avenue, Concord, MA 01742. E-mail: [email protected] 1038