economic burden dm sl

1. Economic Burden of Diabetes
Building Perspective for the
Corporates Industrialists
Sanjeev Kelkar
Conjoint Faculty
The University of Newcastle
Australia

2. Congratulations to Dr Kayathri!
Proud of a Colleague
Setting new rules for the old game
Empathy, Empowerment, Education
Demystification, 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

3. 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

4. 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

5. And there are huge costs
Costs X numbers X number of
complications make staggering numbers
Let us have a look at it.

6. Economic Burden of Diabetes in India
Grateful Thanks to
Anil Kapur
Vice Chairman
World Diabetes Foundation
Copenhagen, Denmark

7. Top Countries with Diabetes

8. Temporal Prevalence in Urban South India
5.0
8.2
11.6
14.2
R
2
= 0.9971
0
2
4
6
8
10
12
14
16
18
20
1988 1992 1996 2000
Kudremukh
Chennai
Chennai
Chennai
Bangalore
Hyderabad
Ramachandran A et al

9. Six Cities
National Urban Diabetes Survey
Total 11, 216 M : F 5288:5928
Prevalence %
N Crude Age-std n Crude Age-std
Total 1631 14.4 14.0 1684 13.9 12.1
Men 776 14.6 14.0 813 13.8 12.5
Women 855 14.3 14.1 871 14.0 11.9
IGT DM
National Urban Diabetes Survey
Diabetologia 44: 1094-1101;2001

10. National Urban Diabetes Survey
Diabetologia 44: 1094-1101;2001
Wild et al
Diabetes Care 2004; 27:1047-53.
Age Specific Prevalence
2.3
7.6
17.9
27.7
31.1
27.2
11.6
14.3
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
DM
IGT
Age groups (years)
%
India
Global

11. Lifestyle in Transition

12. 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 Alberti
International Textbook of Diabetes Mellitus,1992,178.International Textbook of Diabetes Mellitus,1992,178.
• Family history significant predictor of Diabetes

13. 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)

14. 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

15. Persons with Diabetes Use Higher Health Care Resources
Rendell et al
Arch Intern Med 1993
%ofTotal
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

16. CODE 2: Effect of complications on per patient costs
0
1
2
3
4
Costimpactfactor
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

17. 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

18. Proportion of Average Overall Costs –
CODE 2
Antidiabetic
drugs
7% Ambulatory
18%
Other drugs
21%
Hospitalisation
55%

19. Quality and Complexity of Care,
Costs for People Who Are Ill
DIABETES IS RISING HIGH AND
RIDING HIGH ON COMPLICATIONS

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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.

26. 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

27. 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

28. 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,

29. 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

30. 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

31. 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

32. Currently available financial supports
for diabetes
• Self expenditure
• Insurance
• Charity
• Public Sector Healthcare
• Employer reimbursement

33. 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 Centres
OP : Other Private – includes both qualified and others
PC/NC : private Clinic / nursing home
PP : Private Practitioner
Source: CII –McKinsey & Company, Healthcare In India: The Road Ahead,
CII and McKinsey & Company, New Delhi, 2002, p. 38.

34. 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".

35. 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.

36. 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.

37. 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

38. Health Insurance / Schemes in India
Beneficiaries (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

39. Health Insurance / Schemes in India
Beneficiaries (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

40. 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

41. 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

42. 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

43. 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

44. 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

45. Create Public-Private Partnership.
Models
Options 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.

46. Components of current available financial
supports
• Charity – potentially a non self
fuelling way of solving health care
issues
• External funds, loans etc

47. Prevention is the key
Scientific evidence of
studies in cost benefits of prevention

48. 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.

49. 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.

50. 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

51. 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

52. THANK YOU

53. 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 13th2006
Bloomenthal

54. 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

55. 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

56. 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,

57. 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

58. 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

59. 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 .

60. • 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

61. 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

62. 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;

63. 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 %)

64. 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,