If Diabetes Education Saves Insurance Companies Money, Why Is It So Expensive?

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The bad news is that you have diabetes. The good news is that you’re committed to fighting it head-on and not letting the disease get the best of you. So of course you sign up for a diabetes education class right away.

And then you get your bill. There goes your good attitude, right down the toilet.

Such was the case for Michael Phillips. When the Georgia man was told his blood sugar levels were elevated (though not yet at formally diabetic levels), he was referred to a diabetes educator. The educator recommended that Mr. Phillips attend a self-management class, which consisted of two half-day sessions at St. Mary’s Hospital in Athens, Georgia.

So Mr. Phillips signed up, but he never expected that his bill would be anywhere close to $1,044.

He thought it must be a mistake. He appealed the charge; once when he first received the bill, and a second time when the hospital told him that he was in delinquency.

Mr. Phillips’s insurance, Blue Cross Blue Shield, lowered the bill to the allowed amount it had negotiated with the hospital: $626. Mr. Phillips has not yet met his annual deductible so he will be responsible for the entire $626, and this is after the $120 charge for the one-on-one session with the diabetes educator.

If Mr. Phillips’s blood sugar stays high, he’ll likely have more painfully expensive bills heading his way. The 2017 Diabetes Statistics report estimated that the average annual cost of medical care for someone with diabetes is about $16,750. A considerable portion of that—$9,600—was attributed to costs directly related to diabetes. That’s over twice as much as the average spending for someone without diabetes.

The disease, and its associated costs, affects more than just diabetics. The direct and indirect cost of diabetes in the United States was $245 billion in 2012. It’s the seventh leading cause of death in the United States (as of 2015), and while it is a manageable disease, the treatment is expensive. So much so that people living in poverty are less able to access appropriate care and are more likely to experience complications.

One barrier to proper care, for those at all income levels, is lack of education. Managing blood glucose is key to avoiding the ravages of diabetes: blindness, amputation, and chronic fatigue, and studies have shown that diabetes self-management education (DSME) can help patients significantly lower their blood glucose. But the cost of DSME remains a major barrier to people actually participating, even though education can lead to long-term savings.

More accessible education classes could save insurance companies money too.

William Custer, the director of the Center for Health Services Research at Georgia State University, wondered why Blue Cross Blue Shield didn’t push for a lower price in Mr. Phillip’s case. “If the course has a benefit in terms of increasing health and reducing utilization, Blue Cross has an incentive to cover it and an incentive to negotiate,” Mr. Custer told the New York Times.

A spokesperson for Blue Cross Blue Shield said that they did indeed have questions about the cost of diabetes education at St. Mary’s Hospital and would be reaching out to discuss it.

Mr. Phillips admits that his class did seem valuable, though he had already implemented changes to his lifestyle before attending. His two-day course included lunch, free parking, and a sample of Glucerna. The course instructor also told class participants that they could join St. Mary’s gym for free.

Gerard Anderson, a professor of health policy at John Hopkins University, notes that the courses may be a great income generator for the hospital. “If you can get 25 in the class and charge $500 each, you can make a lot of money,” he told the New York Times. Mr. Anderson also thought that the hospital could expect future visits from those in the class.

St. Mary’s very likely will see those in the class again, because one out of every seven health care dollars is spent treating diabetes and its direct complications.

As for Mr. Phillips, he hopes to avoid the cost of diabetes management altogether. He has lost 31 pounds and his blood sugar is back in the healthy range. After seeing the cost of being almost diabetic, he’s certainly motivated to do his best to stay healthy. He jokes, “At least now I’m well-informed about what to eat and not eat if I ever do have diabetes.”

For $1,047, we certainly hope so.

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Katie Taylor started writing in 5th grade and hasn't stopped since. Her favorite place to pen a phrase is in front of her fireplace with a cup of tea, but she's been known to write in parking lots on the backs of old receipts if necessary. She and her husband live cozily in the Pacific Northwest enjoying rainy days and Netflix.
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