The economic impact of diabetes: Assessing incremental direct costs in Australia using linked administrative data

Abstract

Background: Diabetes poses huge financial implications for individuals and healthcare systems. This study aims to quantify the incremental direct healthcare costs associated with diabetes in Australia.

Methods: This matched retrospective cohort study used a linked administrative dataset for Western Australia. Diabetes cases (n = 18,937) were matched 1:1 to controls based on age, sex, remoteness, and weight status. Direct healthcare costs incurred by the government, including costs of hospital admissions, emergency presentations, prescribed medications, general practice visits, and pathology tests, were estimated for 2021, with costs expressed in 2024 Australian Dollars (AUD). The incremental cost was calculated as the difference between the average annual costs of people with diabetes and those without diabetes, and the cost was extrapolated to the total population in 2024.

Results: Average annual healthcare costs per person with diabetes (AUD 9677) were 2.1 times higher than those without diabetes (AUD 4669). The average annual costs attributable to people with Type 2 Diabetes (AUD 5135) were higher than those with Type 1 Diabetes (AUD 4295). The incremental costs of diabetes (AUD 5008) significantly varied across age groups, remoteness, weight status, socioeconomic status and smoking status. In Australia, the total healthcare cost associated with diabetes in 2024 was estimated at AUD 14.2 billion, and the total incremental cost associated with diabetes was estimated at AUD 7.3 billion.

Conclusions: Diabetes imposes a substantial excess direct healthcare cost burden. Evidence could guide the planning and allocation of resources, as well as support the need for targeted health interventions.

Keywords: Australia; Diabetes; Direct health costs; Linked data.