Module 1: Background – Making the Case for Diabetes Care Quality Improvement

Diabetes Care Quality Improvement: A Resource Guide for State Action

About three years ago, New Hampshire State Representative Fran Wendelboe discovered that she had pre-diabetes. She tried controlling her diet, losing weight and monitoring her blood glucose on her own, but her hectic schedule as an elected official and times of stress made this difficult. One morning she experienced trouble seeing and knew that she needed to see her doctor.

"It was time for me to stop avoiding an official diagnosis and get serious, actually past time," stated Representative Wendelboe. "I am now on medication twice a day, but I am still struggling with my crazy schedule and regular meal times. This is not simple, even knowing that the stakes are high."

—An Interview with Representative Fran Wendelboe of New Hampshire


Module Overview:

  1. The Importance of Diabetes — Why should State leaders prioritize diabetes?
    1. Rising prevalence.
    2. Long-term complications.
    3. High costs.
    4. Disparities in care.
    5. Effectiveness of interventions.
    6. Potential for return on investment.
  2. The NHQR and NHDR as Resources for State Leaders.
    1. Gaps between recommended care and care received.
    2. Variation in care across States.
    3. Variation in care across population groups.
  3. The Quality Improvement Opportunity
  4. Summary and Synthesis
  5. Resources for Further Reading
  6. List of Associated Appendixes for Use With This Module

Key Ideas in Module 1:

  • States have an established role and interest in preventing and improving care for diabetes due to the complications associated with diabetes as well as its costs, increasing prevalence, and problems with disparities in care.
  • Increasingly, research evidence points to the potential for cost savings and improved quality of life from investments in improved diabetes care quality.
  • The National Healthcare Quality Report and National Healthcare Disparities Report are new resources that State leaders can use to assess diabetes care quality in their States and devise quality improvement plans.

Return to Contents


The Importance of Diabetes

Diabetes is a serious chronic illness that affects a growing number of people in the United States every year. More than 18 million people have diabetes. One of the Nation's leading killers, diabetes is a costly, chronic disease that, if not diagnosed and treated properly, over the course of time can lead to serious complications such as heart disease, stroke, blindness, lower-limb amputation, kidney failure, disability, and premature death.

For many patients, it is years before they notice the warning signs of diabetes and are diagnosed. Still others who are diagnosed lack adequate treatment and do not know how to manage their disease well over time. Furthermore, the separate care environments that people with diabetes must navigate due to the nature of their disease – eye, foot, heart, and various internal medicine specialists, just to name a few – mean that it is difficult for them to consistently receive the most effective care over time.

What is diabetes?

Diabetes is a group of diseases characterized by the presence of too much glucose in the blood. In type 1 diabetes, the body does not produce enough insulin. In type 2 diabetes, the body may not produce enough insulin or not use insulin properly. Insulin is a hormone produced by the pancreas to move glucose from the blood into the cells. Glucose (also known more commonly as blood sugar) provides energy for cells.

Type 1 diabetes usually begins in childhood and occurs when the cells that produce insulin are destroyed; this type of diabetes accounts for 5 percent to 10 percent of all diagnosed cases.

Type 2 diabetes occurs as the body develops insulin resistance or the pancreas loses the ability to produce insulin. Type 2 diabetes is associated with both genetic and behavioral factors including age, obesity, physical inactivity, family history of diabetes, among other factors. Certain racial and ethnic groups are particularly at risk for diabetes, including African American, Latino, American Indian, and Native Hawaiian populations. Normally seen in adults, type 2 diabetes is on the rise in children and young adults. This type of diabetes accounts for 90 percent to 95 percent of all diagnosed cases of diabetes.

Gestational diabetes is caused by glucose intolerance that develops in some women during pregnancy. Women with gestational diabetes are at increased risk of developing type 2 diabetes after pregnancy.

People with the condition known as prediabetes have an increased risk of developing diabetes. Those with prediabetes have impaired fasting glucose and/or impaired glucose tolerance. The CDC estimates that as many as 41 million adults had prediabetes in 2000. Studies indicate that the progression from prediabetes to diabetes is not inevitable. People with prediabetes can prevent or delay the onset of type 2 diabetes with weight loss and increased physical activity.

Once a person develops diabetes, there is currently no cure. Diabetes must be managed through proper treatment in order to avoid complications.

Source: CDC National Diabetes Fact Sheet (CDC, 2003b).

Why Should State Leaders Prioritize Diabetes?

As protectors of the public's health, State governments play a vital role in preventing and controlling this disease. Every State has public resources invested in a Diabetes Prevention and Control Program that is working to improve care for diabetes, although the level of investment varies from State to State. As health care purchasers, States are responsible for ensuring that the health care they pay for on behalf of State employees, Medicaid clients, and other recipients meets appropriate standards of quality.

State leaders are called to pay attention to many important issues during the course of their work. Making critical determinations of the relative resources and attention that each issue should receive is vitally important for State leaders. There are a number of reasons why States may want to take a closer look at diabetes, including:


  • The rising prevalence of the disease (graphically represented in Figure 1.1), including increases among children and adolescents, driven by an aging and increasingly obese population.
  • The long-term complications that can be prevented if diabetes is diagnosed early and treated appropriately over time.
  • The high health care cost of diabetes, primarily its complications and the loss of economic productivity when disability or premature death occurs.
  • The disparities between various racial and ethnic groups in quality of diabetes care.
  • Interventions and treatment that can prevent type 2 diabetes and control the development of complications for type 1 and type 2 diabetes.
  • The potential for return on investment for purchasers and the health care system as a whole through diabetes quality improvement.

Rising Prevalence

According to the Centers for Disease Control and Prevention (CDC), diabetes currently affects over 18 million people, or 6.3 percent of the total population (CDC, 2003c). Of those estimated to have the disease, more than 5 million people do not know they have it (CDC, 2003c). Another 41 million people are estimated to have prediabetes, a term used to describe the condition of having an increased risk of developing type 2 diabetes (CDC, 2003b).

Trend data indicate that diabetes is rising at a rate faster than population growth would alone indicate (CDC, 2003a; Mokdad, Ford, Bowman, et al., 2000). The development of diabetes has been strongly linked with obesity, aging, and the increasing racial and ethnic diversification of the population (Ford, Williamson, Liu, 1997; Resnick, Valsania, Halter, et al., 2000). Diabetes affects older persons more frequently than younger populations. Of those over 65 years of age, 16 percent have diabetes, whereas diabetes affects 2 percent of people between 20 and 44 years of age (Freid, Prager, MacKay, Zia, 2003). The prevalence of diabetes is also higher among certain racial and ethnic groups, including blacks and Hispanics (AHRQ, 2003b). Without intervention now to prevent and control the onset of diabetes, rates could increase significantly as the large number of baby boomers move into retirement and live longer.

In addition to the aging of the population, the dramatic rise of obesity in the U.S. population is also increasing the incidence of diabetes, especially among children (Mokdad, Ford, Bowman, et al., 2003). Since 1991, obesity rates have grown by 74 percent and diabetes rates have grown by 61 percent (CDC, 2003). Type 2 diabetes used to be called adult onset diabetes because it almost never occurred in children and young people. As childhood obesity has increased, the incidence of type 2 diabetes in children and young people has increased as well. A CDC study estimates that as many as one in every three children born in 2000 will develop diabetes, if serious changes do not occur in diet, weight and exercise in the American population (Narayan, Boyle, Thompson, et al., 2003). The earlier that diabetes develops the more likely that a patient will develop complications and die prematurely

Long-Term Complications

Diabetes ranks as the Nation's sixth leading cause of death, at a cost of 200,000 lives a year (CDC, 2004). Experts believe that this death rate is underreported because of the number of significant comorbidities associated with diabetes, such as heart disease, stroke, and kidney disease that may be coded as the cause of death instead of the diabetes (CDC, 2003c).

The presence of too much glucose in the blood causes damage to blood vessels and, subsequently, to nerves, organs, and tissues; over time this results in various long-term complications, including:

  • Heart disease, hypertension, heart attacks, and stroke — People with diabetes are at increased risk for high blood pressure and harmful levels of cholesterol. As a result, they also face increased risk of having a heart attack or stroke. Adults with diabetes have death rates from heart disease that are 2 to 4 times greater than those without diabetes (CDC, 2003c). A person with diabetes has the same high risk for a heart attack as a person who has had a previous heart attack (Haffner, Lehto, Ronnemaa, et al., 1998).
  • Nerve damage — Nerve damage can lead to loss of feeling in the feet and legs, stomach and digestion problems, sexual dysfunction, carpal tunnel syndrome, and other nerve problems. As many as 70 percent of people with diabetes have some form of nerve damage (CDC, 2003c).
  • Ulcers and lower limb amputation — Nerve damage and circulation problems in the feet and legs can contribute to sores and ulcers developing in these areas. Diabetic wounds often have trouble healing. Uncontrolled infections in the lower limbs can result in the need to amputate toes, a foot, or a leg. More than 60 percent of the amputations unrelated to trauma occur in people with diabetes, making it the leading cause of nontraumatic amputation (CDC, 2003c).
  • Eye problems and blindness — The small blood vessels in the eye can become damaged, leading to blurred vision, increased risk for glaucoma and cataracts, damage to the retina and blindness. Diabetes is the leading cause of new cases of blindness among adults between 20 and 74 years of age (CDC, 2003c).
  • Kidney disease and kidney failure — Damage to the fine blood vessels that are responsible for filtering wastes from the body can harm the kidneys. If enough damage occurs, the kidneys fail. This failure, called end stage renal disease (ESRD), means that individuals must undergo dialysis or a kidney transplant to survive. Diabetes is responsible for 44 percent of new cases of ESRD, making it the leading cause of this disease (CDC, 2003c).
  • High and low blood glucose levels — Glucose levels in the blood that are too high or too low can cause people with diabetes to experience a number of sudden problems, including shakiness, blurred vision, nausea, and vomiting. In serious cases, these imbalances can result in coma and death.
  • Other complications — Diabetes also increases the incidence of dental disease and skin problems, increases the risk of infection, and poses an increased risk for birth defects if pregnant (CDC, 2003c; CDC, 2004).

None of the complications listed above is an inevitable outcome of having diabetes. With quality care and proper self-management, individuals with diabetes can prevent or delay the onset of these complications (CDC, 2004).

High Cost of Diabetes

In 2002, diabetes cost the United States $132 billion. Of this, $92 billion was spent directly on medical care, while $40 billion was the indirect cost associated with disability, diminished productivity and premature mortality. Almost 20 percent of health care spending goes to treat people with diabetes (Hogan, Dall, Nikolov, 2003).

Diabetes is the sixth most expensive condition nationally (Cohen and Krauss, 2003). On average, medical expenditure for a person with diabetes in 2002 cost more than $13,000 per year versus just $2,500 for the average person without diabetes (Hogan, Dall, Nikolov, 2003). About half of the lifetime health care costs for patients with diabetes are related to potentially preventable complications (Herman and Eastman, 1998).

Low-income populations for which States provide health care assistance are very vulnerable to the complications of diabetes. Medicaid pays 10.3 percent of the costs for treating diabetes, compared with 6.4 percent for heart disease and 4.6 percent for cancer, the two most expensive medical conditions (Cohen and Krauss, 2003). To control Medicaid spending, States have a financial stake in encouraging providers to give high quality care to Medicaid recipients with diabetes (Faulkner, 2003). Recognizing this reality, more than 20 State Medicaid programs are using disease management as a means to control costs while improving quality (Brown and Matthews, 2003). Module 2: Data presents two data tables with estimates of the total costs of diabetes for all 50 States and also costs just for Medicaid populations in all 50 States. These estimates are derived from the size of the population and estimates of diabetes prevalence and costs per person with diabetes based on judgments from published research.

In addition to Medicaid, private health plans and employers across the Nation are increasingly looking to wellness programs, disease management, and case management for diabetes as strategies to control health care costs. State governments, too, have struggled with rising health insurance costs for State employees. States, as employers, have financial incentives to help employees, dependents, and retirees also avoid the consequences of complications of diabetes. Moreover, for people with diabetes who are uninsured or who lack drug coverage, the costs of treating this disease can be a crushing financial burden. As a result, patients may forgo needed medications or other care, thus increasing their chances for costly complications later (IOM, 2001c).

Disparities in Health Care

Significant differences exist between racial, ethnic, and socioeconomic groups in health outcomes for diabetes (AHRQ, 2003b; IOM, 2003b). For instance, the NHDR found that blacks, American Indians, and Hispanics have higher death rates for diabetes than whites. Poor glycemic (or blood sugar) control, serious complications from diabetes, and hospitalization for complications were also more common in blacks than other racial and ethnic groups. People with diabetes who had lower socioeconomic status were also less likely to receive recommended care, such as eye exams, and were more likely to be hospitalized for diabetes complications (AHRQ, 2003b). Such disparities may be due to barriers to health care access, generally. Overcoming these barriers, such as lack of insurance coverage or ineligibility for public health programs, is a substantial challenge for many individuals with diabetes.

States and the Federal Government have actively sought to address health care disparities as an issue of equity in the health care system. Disparities also raise questions regarding the effective use of resources. Care for low-income individuals who are hospitalized due to diabetes complications is often financed by public sources such as Medicaid and uncompensated care funds. Ensuring effective care can help people with diabetes to remain healthy and productive, prevent complications, and reduce health care costs.

Effectiveness of Interventions

Diabetes has tremendous impact on both public and private health care spending and on the quality of life for those diagnosed with the disease. Yet type 2 diabetes, the most common form of diabetes, can be prevented and controlled. It is not inevitable that more Americans develop diabetes as they age, nor is it inevitable that people with diabetes experience the long-term complications such as lower limb amputations, kidney failure, and premature death.


Research indicates that diabetes prevention works. Weight control and regular exercise can prevent or delay the onset of type 2 diabetes. The Diabetes Prevention Program was a randomized clinical trial comparing diet, exercise and treatment with metformin, a drug used to control blood glucose levels, in 3,234 patients (Knowler, Barrett, Connor, et al., 2002; Diabetes Prevention Program Group, 2003). Conducted by the National Institute of Diabetes and Digestive and Kidney Diseases, the trial demonstrated that changes to diet and a moderate increase in physical activity reduced the development of diabetes by 58 percent over 3 years; diet and exercise were more effective than drug treatment in reducing diabetes (Figure 1.2). Similar studies performed in China and Finland have also demonstrated substantial reductions in the development of type 2 diabetes through improved diet and exercise among participants at risk for the disease (Pan, Li, Hu, 1997; Tuomilehto, Lindström, Eriksson, et al., 2001).

Other studies have shown that proper health care and patient empowerment can help control and minimize the complications of diabetes for those who already have the disease. The Diabetes Control and Complications Trial (DCCT) Research Group studied individuals with type 1 diabetes and found that intensive treatment for diabetes reduced eye disease by 76 percent, nerve disease by 60 percent, and two forms of kidney problems by 39 and 54 percent (DCCT, 1993). Another large, longitudinal study performed in the United Kingdom found that aggressive treatment to lower blood glucose in patients with type 2 diabetes resulted in the reduction of eye disease and kidney disease by 25 percent. The same study showed that reductions in HbA1c levels was associated with a 35 percent reduction in damage to eyes, kidneys, and nerves and a 25 percent reduction in the risk of premature death from diabetes (UK Prospective Diabetes Study Group, 1998).

Patient self-management is particularly important for managing diabetes and preventing complications. Studies have demonstrated that patient self-management programs are effective tools for improving patient outcomes. One Stanford University study funded by AHRQ found that over a 2-year period participants in a chronic disease self-management program showed reductions in health distress, made fewer visits to the doctor's office and emergency room, had not experienced any further increases in disability and had increased self-efficacy (Lorig, Ritter, Stewart, et al., 2001). Systematic reviews of the literature on self-management programs for diabetes found positive effects on patients' knowledge, self-monitoring of blood glucose, diet, and glycemic control (Norris, Nichols, Caspersen, et al., 2002; Norris, Engelgau, Narayan, 2001).

State Diabetes Prevention and Control Programs, funded partially by CDC, have been associated with noticeable improvements in diabetes prevention and treatment; State DPCPs raise awareness of diabetes, primary and secondary prevention, and quality improvement. North Carolina's Project DIRECT in its first year of operation helped increase diabetes patient counseling for foot care from 20 to 50 percent. Medical chart reviews showed improvement in monitoring of blood glucose, recommended screenings, and diabetes education. In New York State, work with community and university partners helped to reduce hospitalization rates for diabetes by 35 percent and lower-extremity amputation by 39 percent (CDC, 2003d). From 1996 to 2001, Michigan's diabetes program increased significantly the number of recommended tests and screenings that people diagnosed with diabetes received. Hemoglobin A1c (HbA1c) tests increased from 14 to 78 percent, and foot exams increased from 58 to 77 percent. In addition, patients reported improved exercise and dietary planning (CDC, 2003).

Ample research and experience from State DPCPs demonstrate that there are successful tools for delaying and potentially preventing the development of type 2 diabetes, managing both type 1 and type 2 diabetes effectively and preventing the long-term complications that are responsible for high treatment costs and diminished quality of life for people with diabetes.

Potential for Return on Investment

Because diabetes can result in expensive long-term complications, public health experts argue that investing in diabetes prevention and control initiatives today can improve health outcomes and reduce health care costs. Although the business case for diabetes prevention and quality improvement is still being developed, a number of studies and the experience of both public and private payers show promising signs regarding the return on investment.

A comprehensive economic analysis of the literature on 17 common diabetes interventions sought to answer whether research has determined if diabetes prevention and treatment is cost effective for society. The study ranked diabetes interventions based on whether the interventions were clearly cost saving, clearly cost effective, possibly cost effective, not cost effective or unclear. The study determined a number of areas in which the benefits of diabetes prevention and treatment provide a clear return on investment, including eye screening and treatment, prenatal care, kidney disease prevention, and improved control of blood glucose. The study found no diabetes treatments with costs that outweighed the benefits (Klonoff and Schwartz, 2000).

Other convincing evidence that quality improvement for diabetes pays off comes from studies of more intensive and comprehensive treatment. Two studies analyzed the treatment costs of more intensive versus conventional care for diabetes, one for type 1 and the other for type 2. Both studies were based on the Diabetes Control and Complications Trial, a randomly controlled clinical trial of intensive therapy for type 1 diabetes, compared to traditional, less frequent treatment and contacts. The trial found that intensive therapy averted complications of the disease (DCCT Research Group, 1990). The two derivative studies simulated the lifetime costs of diabetes—one for type 1 (DCCT Research Group, 1996) and the other for type 2 (Herman and Eastman, 1998). The researchers reached similar conclusions. Even at two to three times the expense of conventional therapy, the lifetime costs of improved care were offset by the lifetime costs of blindness, end-stage renal disease, and lower extremity amputations.

A study of comprehensive care for diabetes in a managed care environment demonstrated cost savings in as little as a 3-year period (Sidorov, Shull, Tomcavage, et al., 2002). The program, designed for six chronic diseases, found per member per month paid claims averaged $394.62 per enrollee with diabetes in the comprehensive care program compared to $502.48 per enrollee with diabetes not in the program. That was a total saving for the health plan of $4.3 million in paid claims annually for diabetes care, which compared very favorably with an estimated $1.81 million cost (including capital expenses) of the disease management program attributed to diabetes care. These cost reductions were accompanied by a higher proportion of diabetes patients receiving recommended tests and monitoring.

Another analysis of the business case for diabetes disease management conducted by Harvard University for the Commonwealth Fund found that the two health plans studied were able to cover the costs of their investment in diabetes disease management programs, but did not save a significant amount of money. However, each patient enrolled in the program for 10 years would gain significantly in quality-adjusted life years (Beaulieu, Cutler, Ho, et al., 2003). The results of this study led the authors to conclude:

...The magnitude of the difference between costs and patient benefits is so great that we believe, at the societal level, the outcomes of these comprehensive [diabetes disease management] programs will always be worth the investment needed ( Beaulieu, Cutler, Ho, et al., 2003).

America's Health Insurance Plans, a national trade association, evaluated eight health plan programs in an analysis of cost savings from disease management. This analysis found that diabetes disease management programs reduced hospital inpatient costs, number of days in the hospital, as well as per member costs and total costs. Disease management of multiple chronic conditions, including diabetes, also showed evidence of significant returns. One plan with Medicare, Medicaid, and commercial enrollees found that it saved $2.94 for every dollar invested in disease management for multiple chronic conditions (AAHP/HIAA, 2003).

From 1999 to 2001, the Washington State Diabetes Collaboratives helped reduce blood glucose for patients in participating health centers by 10 percent on average; and for patients with poor blood glucose control, it was reduced from 24 percent to 17 percent, a 7-percentage-point reduction. The estimated annual cost savings from this improvement is roughly $419,000 a year (CDC, 2003a). Other studies have demonstrated that reducing HbA1c levels from 10 to 9 percent in people with diabetes can result in savings of more than $1,200 per patient. The savings can be as much as $4,000 in patients with a combination of diabetes, heart disease, and hypertension, which are common comorbidities of diabetes (White, 2002).

Other evidence from State disease management programs indicates that States expect quality improvement for diabetes to help them reduce health care costs. Washington State hopes to save $900,000 through its Medicaid diabetes disease management program. Oregon expects to save $1.5 million from its Medicaid disease management that targets diabetes, asthma, and congestive heart failure (Brown and Matthews, 2003).

A growing body of research indicates that payers, patients, and society can see a long-term return on investment in diabetes quality improvement. Yet, more research needs to be conducted on the types of interventions and resource investments that may yield savings and under what circumstances. Most studies look at the cost effectiveness of one treatment or another but do not consider the cost effectiveness of all interventions together such as the DCCT study did. The challenge of documenting cost savings from diabetes interventions is that there are so many potential health problems to address for people with diabetes and so many combinations of interventions to assess. Tracking and data management are difficult to do. Cost savings are difficult to calculate accurately because of measuring savings for people who are unaware that they have diabetes and for those diagnosed who are not using health care services and are not managing their disease. Most importantly, the available evidence points to the fact that the largest savings from diabetes interventions can occur many years into the future—a difficult investment horizon for businesses and legislative budget analysts who may be looking for short-term savings. While more research needs to be done, there is reasonable evidence that diabetes interventions can yield cost savings and little doubt that available interventions can improve the quality of diabetes care and health outcomes over the long term.

Current as of August 2008
Internet Citation: Module 1: Background – Making the Case for Diabetes Care Quality Improvement: Diabetes Care Quality Improvement: A Resource Guide for State Action. August 2008. Agency for Healthcare Research and Quality, Rockville, MD.