Sunday, August 12, 2012

$1 Billion Possible in Savings

A new study appearing in the August 2012 Health Affairs issue titled “Substantial Medicare Savings May Result if Insurers Cover Artificial Pancreas Sooner for Diabetes Patients” was co-authored by incoming Washington D.C. West Health Policy Center President Mike O’Grady former Assistant Secretary of HHS.

The article suggests that almost one billion dollars in cost savings would result after twenty five years from the use of the artificial pancreas which is a powerful new combination of an insulin pump and continuous glucose monitor developed to help patients more effectively control their diabetes.

Diabetes accounts for almost 42 percent of Medicare’s fee-for-service spending with kidney failure, heart attack, stroke, blindness, and amputation potential complications of the disease. Medicare expenses from diabetes are expected to almost quintuple to $171 billion by 2034 from 2009 annual expenditures of $45 billion.

A key to controlling diabetes is controlling glucose levels, which is very difficult, labor intensive, and costly. By combining an insulin pump and continuous glucose monitor with improved software controls working together as an artificial pancreas, diabetics can more effectively and continuously control their glucose levels.

The current study models the impact of the artificial pancreas on clinical results as costs over time, based on early results from clinical trials. Projected Medicare savings are $937 million in nominal dollars after twenty five years, the study notes.

The article co-authored by Priya John and Aaron Winn, was produced when O’Grady was Senior Fellow at NORC at the University of Chicago and Principal of O’Grady Health Policy. O’Grady joined the Washington D.C. based West Health Policy Center in August.

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