Diabetes: The Rising Cost Driver in Employee Benefits

Insights from Janet Young, M.D., Clinical Analytics Advisor at Springbuk

In the latest episode of "Healthcare on the Rocks: Employee Benefits with a Twist," hosts Brittany Hardaway and Rachael Baumgartner welcomed Janet Young, M.D., Clinical Analytics Advisor at Springbuk, to discuss the rising impact of diabetes on employee benefits and healthcare costs covered in the 2025 Employee Health Trends report.

Below, you'll find highlights and takeaways from their conversation. Ready to listen to the full episode? Click here.

The Surprising Cost Surge

When analyzing healthcare spending trends, employers typically focus on conditions like cancer or musculoskeletal disorders. However, recent data reveals a surprising cost driver that's outpacing all others: diabetes.

"Diabetes accounted for the highest increase in spending between 2022 and 2023," explains Dr. Janet Young, Clinical Analytics Advisor at Springbuk. "Per-member, per-month (PMPM) costs related to diabetes rose by over 6%—nearly 50% higher than the rise in spending for the second-largest cost driver, actively managed cancer cases."

The rate of increase is even more striking when viewed over a longer timeframe:

• Cancer treatment costs rose by 18% over three years
• Gastrointestinal condition costs increased by about 20%
• Diabetes-related spending surged by a staggering 38%

GLP-1 Agonists: The Primary Cost Driver

What's behind this dramatic rise? According to Dr. Young, the answer is clear: GLP-1 agonists, a class of medications that includes drugs like Ozempic and Wegovy.

"These drugs accounted for nearly 90% of all diabetes-related spending increases over the past four years," notes Dr. Young. "Over the past year, more than 40% of members with type 2 diabetes filled prescriptions for GLP-1s, double the percentage from four years ago."

While GLP-1 agonists have been available for two decades to treat diabetes, several factors are driving their recent surge in popularity:

1. Superior efficacy: Newer GLP-1 drugs are more effective than older medications at lowering A1C levels
2. Weight loss benefits: They promote greater weight loss, which is crucial since about 90% of type 2 diabetes patients are overweight or obese
3. Increased awareness: Growing patient knowledge about these medications has led to more requests from doctors
4. Additional health advantages: Emerging research suggests GLP-1s may help protect against heart disease, stroke, and kidney disease progression

Continuous Glucose Monitoring: A Technology on the Rise

Another key trend in diabetes management is the growing adoption of continuous glucose monitoring (CGM) devices. These technologies eliminate the need for frequent fingerstick tests by using a small sensor under the skin to continuously measure glucose levels.

"For type 1 diabetes and those with type 2 diabetes who use insulin, CGMs provide real-time data to a receiver—often a smartphone," explains Dr. Young. "Some CGMs even have alerts to warn users when their glucose levels are too high or low."

While CGMs are primarily recommended for insulin users and those at risk for hypoglycemia, evidence suggests they could benefit a broader population:

• Short-term CGM use can help patients identify how diet, exercise, and stress impact their glucose levels
• The insights gained can help patients make informed lifestyle changes
• CGMs can assist in fine-tuning medication regimens

The recent availability of over-the-counter CGMs has expanded access beyond those with diagnosed diabetes. Now, individuals with prediabetes can also utilize this technology to prevent disease progression.

Social Determinants of Health: Uncovering Disparities

An often-overlooked aspect of diabetes management is how social determinants of health (SDOH) affect both prevalence and treatment access.

"We often see disease prevalence reported as an overall rate, but social factors like diet, living conditions, and pollution significantly impact diabetes rates," Dr. Young points out.

The data reveals stark disparities:

• Among adults aged 50-64, diabetes prevalence in the lowest social vulnerability group is approximately 10%
• In the highest social vulnerability group, prevalence nearly doubles to about 20%

More concerning is that patients with higher social vulnerability were less likely to use GLP-1s or CGMs, likely due to financial barriers and disparities in prescribing practices.

Will New Technologies Lead to Cost Savings?

While GLP-1s and CGMs come with significant upfront costs, their long-term financial impact remains an open question.

"It's too early to say definitively," cautions Dr. Young. "While these technologies are linked to better health outcomes, their financial impact takes years to measure."

However, initial data shows promising trends in lower cardiovascular and kidney disease spending, which could signal future cost savings as these conditions are common—and expensive—complications of diabetes.

Key Takeaways for Employers

As employers navigate the complex landscape of diabetes management, Dr. Young recommends focusing on three key areas:

1. Monitor diabetes trends: GLP-1 and CGM usage will continue to rise, affecting pharmacy and medical spending
2. Address prediabetes: The rate of prediabetes has doubled in four years, presenting a future cost challenge if left unaddressed
3. Reduce care disparities: Explore ways to improve access to treatment for socially vulnerable populations

By understanding these trends and taking proactive steps, employers can develop more effective strategies for managing diabetes-related costs while improving health outcomes for their employees.

Get the complete 2025 Employee Health Trends report and other related resources.
For more insights on healthcare trends affecting employer benefits, visit Springbuk.com.