Report on the Economic and Social Cost Of Type 2 Diabetes

15 March 2021

The Cost Of Type 2 Diabetes

A new report launched in Parliament shows that Aotearoa New Zealand has reached epidemic proportions of type 2 diabetes and is on a steep trajectory for the next 20 years. However, the report shows that this steep curve could be flattened or even squashed with the right interventions.

The Economic and Social Cost Of Type 2 Diabetes report, launched in Parliament by Associate Minister of Health Hon Peeni Henare on 15 March, was commissioned by Diabetes New Zealand, the University of Otago’s Edgar Diabetes and Obesity Research Centre (EDOR), Healthier Lives – He Oranga Hauora National Science Challenge, and philanthropists Tony and Heather Falkenstein, and undertaken by PwC New Zealand.

Urgent action needed

“The new report shows that urgent action is needed now to curb the growing costs of diabetes to the New Zealand economy as well as the costs to individuals and their whānau, both in terms of financial impact and livelihood,” says Heather Verry, CEO of Diabetes NZ.

“By changing from an ambulance at the bottom of the cliff approach to a fence at the top, we could be avoiding more than 600 amputations a year in people with type 2 diabetes.”

The sponsors of the study are calling on the NZ Government to take urgent action now to slow the current and predicted trajectory of type 2 diabetes in New Zealand.

“The current approach is not working if we want to stem this growing epidemic. Type 2 diabetes is not tracked as a national health target for a start, and yet the figures are growing at an alarming rate. New Zealand needs a holistic and system-wide response from Government, society and individuals to change the trajectory,” says EDOR Director Professor Rachael Taylor.

The report provides a strong case for reorienting policy and prioritising resources to address type 2 diabetes towards more equitable and effective interventions.

“All eyes remain on COVID-19 as a major current global health issue, but NZ is facing a staggering increase in numbers of people with type 2 diabetes and astronomical costs associated with this disease,” says Professor Taylor.

The economic and social cost

Professor Jim Mann, Director of the Healthier Lives National Science Challenge says: “We’ve known for a long time that type 2 diabetes is an important and worrying issue in our communities, but we now know that its impact on New Zealand can be measured as a fraction of GDP with the $2.1b annual equivalent to 0.67% of GDP.”

That’s just for this one disease and is in purely financial terms, let alone the human cost to individuals and their families/whānau. The study found that the interventions led to outcomes which have cost benefits as well as improved wellbeing for those with diabetes and their family/whānau,” says Professor Mann.

“Although many are aware of type 2 diabetes issues, this report revealed a surprising extent of the issue and we were also surprised by how successful and cost-effective some of the interventions were.”

“Prevention is key to tackling this disease and we need effective public health prevention measures in place. This report mostly focuses on interventions for those who already have type 2 diabetes or prediabetes,” says Tamati Shepherd-Wipiiti (PwC), one of the report authors.

“Pacific, Asian and Māori peoples are disproportionately affected by this disease and part of the reason for undertaking this report was to address these health inequities in New Zealand.”

The current and projected prevalence of type 2 diabetes is highest for Pacific peoples, with a quarter of all New Zealand’s Pacific peoples projected to be diagnosed with type 2 diabetes in 20 years’ time. A similar concerning trend for Asian and Māori people demonstrates that if no further action is taken to address New Zealand’s type 2 diabetes problem, inequities and health outcomes will worsen for these populations.

Four interventions to curb the cost

Despite the dramatically increasing numbers of people with type 2 diabetes in Aotearoa, the report reveals some good news about resolving this alarming issue. The team investigated several viable and promising solutions that could flatten this trajectory, and greatly reduce both human and economic costs.

The research team analysed the figures and chose four interventions for type 2 diabetes. Each one addresses a different part of the type 2 diabetes pathway from preventing prediabetes progressing to type 2 diabetes, right through to better treatment for people who already have type 2 diabetes

The report shows significant cost savings could be gained from all four interventions, based on cost-benefit analyses:

  1. The Healthy People, Healthy Lives intervention – community-centred lifestyle programme for preventing prediabetes progressing to type 2 diabetes
  2. Owning our Futures – reversal of type 2 diabetes
  3. Better Diabetes Medications intervention – better management of type 2 diabetes
  4. Foot Screening and Protection – prevention of serious foot-related complications, such as amputation, for people with type 2 diabetes.

Investment would have significant impact

It also reveals how Government investment in the prevention, treatment and care of type 2 diabetes could have a significantly positive impact on New Zealand’s economy and society. The benefits vary with each intervention but are driven primarily by reducing health costs and increasing economic value through increasing life expectancy and productivity.

“As well as economic benefits, significant societal benefit can be achieved by improving peoples’ quality of life and ability to participate in society,” says Heather Verry.

Download The Economic and Social Cost of Type 2 Diabetes report

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