Freeman Spogli Institute for International Studies Walter H. Shorenstein Asia-Pacific Research Center Stanford University


The Net Value of Health Care for Patients With Type 2 Diabetes, 1997 to 2005

Journal Article

Karen Eggleston*, Nilay D. Shah*, Steven A. Smith*, Amy E. Wagie*, Arthur R. Williams*, Jerome H. Grossman*, Ernst R. Berndt*, Kirsten Hall Long*, Ritesh Banerjee, Joseph P. Newhouse*

Published by
Annals of Internal Medicine, Vol. 151 no. 6, page(s) 386-393

Background.  The net value of increased health care spending remains unclear, especially for chronic diseases.

Objective. To assess value for money spent on medical care for patients with type 2 diabetes, using a “cost-of-living” approach.

Setting. Mayo Clinic Rochester, a not-for-profit integrated health care delivery system. 

Patients. 613 patients with type 2 diabetes: 36 diagnosed before 1985; 186 in 1985-96; 181 in 1997-99; and 210 in 2000-02.

Design. We compare the increase in inflation-adjusted annual health care spending with the value of changes in health status between 1997 and 2005.

Measurements. Measures of health status are (1) cardiovascular risk based on the United Kingdom Prospective Diabetes Study (UKPDS) equations, holding age and diabetes duration constant (“modifiable risk”); and (2) simulated outcomes for all diabetes complications using the UKPDS Outcomes Model. The present discounted value of improved survival and avoided treatment spending for coronary heart disease (CHD), net of the increase in annual spending per patient, yields net value.

Results. We estimate a total value of $20,824 per patient for quality improvement ($17,392 from reduction in modifiable risk of fatal CHD and fatal stroke, $3,432 from avoided CHD treatment spending), and a value net of cost of $10,911 per patient (95% confidence interval -$8,480, $33,402). A second approach to assessing value, using the UKPDS Outcomes Model, yields a net value of $6,931 per patient.

Conclusions. Our estimates of net value are positive, indicating that value for money has improved, although confidence intervals bracket zero. The increase in spending thus appears “worth it” on average, but there remains considerable room for enhancing value for money in care for patients with diabetes.