OBJECTIVE Direct medical cost of diabetes in the U.S. has been estimated to be 2.3 times higher relative to individuals without diabetes. This study examines trends in healthcare expenditures by expenditure category in U.S. adults with diabetes between 2002 and 2011.

RESEARCH DESIGN AND METHODS We analyzed 10 years of data representing a weighted population of 189,013,514 U.S. adults aged ≥18 years from the Medical Expenditure Panel Survey. We used a novel two-part model to estimate adjusted mean and incremental medical expenditures by diabetes status, while adjusting for demographics, comorbidities, and time.

RESULTS Relative to individuals without diabetes ($5,058 [95% CI $4,949–$5,166]), individuals with diabetes ($12,180 [$11,775–$12,586]) had more than double the unadjusted mean direct expenditures over the 10-year period. After adjusting for confounders, individuals with diabetes had $2,558 ($2,266–$2,849) significantly higher direct incremental expenditures compared with those without diabetes. For individuals with diabetes, inpatient expenditures rose initially from $4,014 in 2002/2003 to $4,183 in 2004/2005 and then decreased continuously to $3,443 in 2010/2011, while rising steadily for individuals without diabetes. The estimated unadjusted total direct expenditures for individuals with diabetes were $218.6 billion/year and adjusted total incremental expenditures were approximately $46 billion/year.

CONCLUSIONS Our findings show that compared with individuals without diabetes, individuals with diabetes had significantly higher health expenditures from 2002 to 2011 and the bulk of the expenditures came from hospital inpatient and prescription expenditures.