Factors influencing the cost of hospital care for people with diabetes in Australia.

OBJECTIVES: To estimate the incidence of disease and annual disease-specific hospital costs for people with and without diabetes. RESEARCH DESIGN AND METHODS: A comparison of costs of Australian hospital care (1996-1999) in 20,538 persons with diabetes over the age of 35 years, using matched controls. Odds ratios were used to compare the incidence of new episodes of disease in both groups and regression analyses using annual costs, and log-transformed annual costs were used to estimate disease-specific hospital costs. RESULTS: People with diabetes had a higher incidence of all vascular diseases and a range of nonvascular diseases with the greatest difference being for amputation (odds ratio, 5.13; 95% CI, 3.11-8.47). The overall average cost for people with diabetes was 3676 dollars (S.D., 7756) compared to 2670 dollars (S.D., 6045) for controls. Forty percent of the 1005 dollars(95% CI, 927-1084) excess hospital costs were due to higher disease-specific costs, reflecting greater intensity of treatment, with the remainder due to the higher frequency of hospitalization. It was found that although treatment costs for a new comorbidity peaked in the first year for both groups, these higher costs continued over subsequent years for people with diabetes. CONCLUSIONS: The majority of the excess costs is due to the increased frequency of disease requiring hospitalization rather than intensity of treatment. This additional cost is due to extra admissions, increased length of stay per admission, and greater ongoing treatment costs in subsequent years. There continues to be potential for cost containment through improved preventative care.