Diabetes continues to strain organizations’ healthcare budgets. See how a comprehensive approach to healthcare and offering preventive resources can improve your people’s health outcomes.

Authors: Jeanne Clay Gus Georgiadis


An ongoing concern for employers, diabetes increasingly strains healthcare budgets. While there's a tendency to oversimplify its effects on patients and how to manage the disease, a holistic approach can improve both health outcomes and population health trends.

Type 2 is the most prevalent form of diabetes and accounts for 90% to 95% of the diabetic population in the U.S. Only 5% have type 1. The risk factors for type 2 vary, but may include a family history, high blood pressure or cholesterol, and increased age. Overall, more than 9% of people in the U.S. have diabetes, which disproportionately affects certain ethnic groups.1

While it's possible for some people with type 2 diabetes to go into remission — which means their blood sugar levels are in a healthy range without medication — the preconditions that lead to the disease never disappear entirely, and it's a lifelong issue.2 Cardiovascular complications are common in patients and still need to be managed even when diabetes is controlled.

Preventing diabetes, improving the wellbeing of those who have it and lowering claims activity are significant cost-saving opportunities. However, when approaching this goal, employers need to recognize that multiple factors often contribute to a disease which is quite complex. Key drivers associated with type 2 diabetes include obesity — which is a common precursor — as well as diet and sedentary habits. Partly due to the effects of the pandemic on health, these markers may recently have moved in the wrong direction.

In each case of diabetes, the patient's unique physiology and metabolic processes combine with mental health and lifestyles. This combination is why varied interventions and well-informed benefits design are most likely to achieve targeted results. Understanding and leveraging the social determinants of health can also help employers identify populations more at risk, as well as specific barriers to care such as eating healthy. All of these factors suggest a greater need for a holistic approach to whole-person health to help achieve better outcomes and sustainable progress.

Slowing unhealthy trends and the systemic growth of diabetes

Managing diabetes is a societal challenge as well as a personal challenge for those who live with this chronic condition. While people can develop diabetes even when their health is otherwise normal, it's typically associated with excess body fat and obesity. Yet organizations may not be in sync with the idea of obesity as a disease or a primary driver of diabetes.

Weight gain among adults during the pandemic mostly affected those who were overweight, had children at home and/or experienced mental health issues such as anxiety and depression.3 Because many people are employed and spend much of their time at work, these factors can contribute to productivity issues, highlighting the business case to help prevent and control diabetes. But only about 1 in 2 employers (52%) offer a weight management program.4

Behavioral health interventions influence the outcomes of efforts to both prevent and effectively manage obesity and diabetes. Although stress is familiar to everyone, it can become problematic if it's not well managed. High levels of the hormone cortisol are associated with the body's stress response, which can induce cravings for food high in salt, fat and other unhealthy substances. Frequently, diet and diabetes are closely linked, especially for those who already have the disease.

A person's belief in their ability to complete a certain task — or self-efficacy — often correlates with their control over personal habits and health. Therefore, educating employees about diabetes and engaging patients in self-care often boosts the success of supporting programs. Environmentally, a work culture that promotes health and wellbeing also helps employers break down stereotypes — and reduces the stigma about this chronic condition.

Educating employees about diabetes and engaging patients in self-care often boosts the success of supporting programs.

A prevention-first and holistic approach to care

Early disease intervention helps to fend off downstream health and financial consequences. So ideally, employers should gear initiatives toward improving the health of at-risk employees, including screenings. Access to necessary services and treatments is key to broadly successful management. Virtual services, point solutions, surgery and adequate drug coverage for obesity provide a full set of options, for both employees and the clinicians who treat them.

Integrating diabetes resources into other chronic condition programs can enhance health outcomes, and coordinating primary care providers, dietitians and health coaches enables holistic treatment. To help patients maintain their progress, it's important to encourage behaviors such as regular blood glucose monitoring and adjustments to habits as needed. A healthy routine includes setting goals for self-care and participating in programs that promote physical activity, weight management and nutrition. Access to medication, practical tools and emotional support round out comprehensive care.

Reducing barriers to diabetes care with well-designed benefits

An assessment of how well current benefits and resources support employee health identifies potential opportunities to improve diabetes prevention and management, helping to guide better decisions. Once a plan is implemented, it's important to evaluate and interpret population health and demographic data. Adjustments can then be made to optimize outcomes.

Identifying financial and logistical barriers to health is equally critical. For example, high-deductible health plan members may struggle to cover the high costs of insulin and other diabetes-related drugs. Or they could decide to spare the expense and delay needed care.

Appropriate alternatives that are cost-conscious and compliant may include a health plan with a vanishing deductible, rewards for diabetes program participation and incentives for achieving health goals. Employers will want to evaluate these options up front to determine whether they fit the organization and the patient population. A well-designed medical and pharmacy benefit, layered with carefully evaluated diabetes initiatives, helps to ensure support for a multitude of patient needs. But currently, only 18% of employers reduce employee costs for prescription drugs that treat high-cost chronic conditions.4

18% of companies lower cost for medications for high-cost chronic conditions.

Setting high standards for diabetes care and program performance to help achieve the best outcomes

Reliable vendor management for diabetes is an invaluable asset, which makes oversight of this responsibility well worth the effort for employers. While health plans, pharmacy benefit managers and point solution vendors must deliver as promised, the sponsor may need to hold them accountable.

Performance data and population health metrics provide insight into what is and isn't working. In an optimal scenario, vendors and clinicians create synergy through alignment and integration. For example, readings from a continuous glucose monitor supplied and maintained by the diabetes vendor partner can be shared directly with the member's primary care provider. Coordinated efforts among all stakeholders are more likely to benefit plan members and patient outcomes because they help to avoid confusion.

Clinicians are central to successful diabetes and pre-diabetes management. Together, health system relationships and benefits design can produce better outcomes and provide improved healthcare value. Accountable care organizations and other integrated care-delivery risk arrangements are worth considering, along with outcomes-based contracting and other payment innovations. Most importantly, when the primary care physician takes the lead in directing the patient's care experience, the potential for total wellbeing is maximized.

Better ROI through environmental, community and societal investments

There's a structural component to diabetes that drives patient outcomes. Environmental changes to the workplace can promote healthier choices while supporting people where they are. And to reduce health disparities among the workforce, employers need to address cultural differences related to diabetes risk and consider the social determinants of health. These steps are critical for determining the right diabetes approach.

Diabetes has direct and indirect costs — physical, emotional and financial — for individuals, organizations and society at large. Yet an investment in the communities where employees live and work is an investment in societal wellbeing. Locally, establishing a positive perception of the organization's support for employee health, including diabetes, can also pay recruitment and retention dividends going forward.

But above all, a broader vision for managing diabetes will help employers close gaps in care and stabilize unsustainable trends, putting them on a steadier path to better workforce health and wellbeing.

Author Information


1Berry, Jennifer. "Statistics and Facts About Type 2 Diabetes," Medical News Today, 1 Apr 2019.

2Sherwood, Alison. "Can You Reverse Type 2 Diabetes?" WebMD, 13 Jul 2022.

3Khubchandani, Jagdish et al. "COVID-19 Pandemic and Weight Gain in American Adults: A Nationwide Population-Based Study," National Library of Medicine, 10 Jan 2022.

4Gallagher, "2022 Workforce Trends Report Series: Physical & Emotional Wellbeing," Jul 2022. Gated PDF.


Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc. is a licensed insurance agency that does business in California as "Gallagher Benefit Services of California Insurance Services" and in Massachusetts as "Gallagher Benefit Insurance Services." Neither Arthur J. Gallagher & Co., nor its affiliates provide accounting, legal or tax advice.