The incidence of diabetes and accompanying comorbidities in the United States is growing at an epidemic rate, with 8.3 percent of the U.S population known to have diabetes, according to the National Diabetes Education Program, a partnership of the National Institutes of Health and the Centers for Disease Control and Prevention.a Approximately 27 percent of patients over the age of 65 are diagnosed with diabetes, while another 79 million adults have pre-diabetes and are likely to be diagnosed over the next decade.

From 2007 through 2012, the financial costs of diabetes were estimated to have increased by 41 percent, from $175 billion to $245 billion.b Ulcerations of the feet or lower extremities, known collectively as diabetic foot ulcers (DFUs), are among the most common complications in patients with diabetes. DFUs typically begin with a lack of feeling in the person’s legs and feet, known as peripheral neuropathy, which can be an indicator of reduced blood flow to the tissue resulting from peripheral arterial disease (PAD)—a condition closely associated with diabetes. Insufficient blood flow, infection, and lack of timely treatment of diabetic foot ulcers can lead to in secondary medical complications, with 15 to 30 percent of DFUs progressing to debilitating and costly lower-extremity amputations. 

More than 85 percent of lower-extremity amputations in patients with diabetes occur in people who have had a prior foot ulcer. The National Diabetes Education Program of the National institutes of Health notes that roughly 8 million Americans have PAD, including 12 to 20 percent of people over the age of 60 (“The Facts About Diabetes: A Leading Cause of Death in the U.S.”). Diabetes increases the risk for PAD, and together, these two diseases create a formula for a high probability of DFUs. 

The economic burden of caring for DFUs to prevent infection and ultimately amputation is enormous, growing, and unsustainable. With the epidemic not abating, hospitals need solutions that will deliver high-quality medical care at the lowest-possible cost. Evidence shows that avoidance of infection and amputation is best achieved through expeditious wound healing. Despite the best implementation of standard care for these conditions, healing rates of DFUs remain low, with approximately 24 percent healed at 12 weeks and 31 percent healed at 20 weeks; these rates have essentially unchanged since 1999.c

Medicare expenditures for patients with DFUs average three times more than those for Medicare patients in general ($15,309 versus $5,226) within the same DRG.d DFU treatments provided in podiatrist offices and outpatient clinics amount to an estimated $5 billion in direct cost and $400 million in indirect cost annually. 

Cost of DFU in the first two years after diagnosis and initial standard-of-care treatment was estimated at $51,344 for 2012 using the medical care Consumer Price Index (CPI).e The cost of treatment is linked to the high rate of healthcare utilization among patients suffering with DFUs, with 73.7 percent of costs linked to inpatient care. 

The most costly and most feared consequence of DFU is amputation. The National Inpatient Sample for 2009 reports the average inpatient charge for an amputation related to complications of diabetes was $85,000 for over 112,000 discharges.f Although such charges may achieve the cost outlier threshold, the incremental revenue may not result in a positive ROI for service lines treating this disease. With the anticipated increase in the patient census, the numbers of patients who present with complex disease can be expected to rise as well, making it all the more critical to manage for rapid closure of DFUs cost effectively.


a. See National Diabetes Education Program.

b. Yang, W., Dall, T.M., Halder, P., Gallo, P., Kowal, S.L., and Hogan, P.F., “Economic Costs of Diabetes in the U.S. in 2012,” Diabetes Care, April 2013.

c. Stockl, K., Vanderplas, A., Tafesse, E., and Chang. E., “Costs of Lower-Extremity Ulcers Among Patients with Diabetes,” Diabetes Care. September 2004.

d. La Fontaine, J., “Clinical Pathways to the Development of Foot Ulcerations,” presentation, Scott & White Healthcare 2013 Diabetic Foot Update, Dec. 5, 2013.

e. Crawford, M., Church, J., and Rippy, D., editors, CPI Detailed Report: Date for March 2012, U.S. Bureau of Labor Statistics.

f. Data from Healthcare Cost and Utilization Project databases, Agency for Healthcare Research and Quality, December 2013. 

Leah Amir, MS, MHA, is executive director, Institute for Quality Resource Management, St. Louis. 

Publication Date: Thursday, May 01, 2014

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