A troubling disconnect has emerged in America’s fight against diabetes, one that suggests medical progress alone will not fully address the poor economic prospects of millions of people diagnosed with the disease.
A new study of a quarter million Americans conducted at the USC Schaeffer Center found a “diabetes paradox.” While the risks of health complications for people with diabetes have significantly improved since the 1990s, their labor market outcomes haven’t budged.
The finding should be an alarm bell as the Trump Administration and Republican leaders in Congress contemplate cuts in Medicaid, which insures one quarter of the working age adults living with diabetes. It also implies that economic productivity is an important consideration for policymakers when making decisions about access to new anti-obesity medications, which could avert the disease in the first place.
Thanks to remarkable advances in treatments and diagnosis, people with diabetes experience fewer hospitalizations, report fewer activity limitations and face lower mortality rates than three decades ago. Yet working-age Americans with diabetes remain 8-11 percentage points less likely to participate in the labor force than people without the disease, after accounting for other differences like age. They’re also 4-6 percentage points more likely to rely on disability benefits. These gaps haven’t narrowed since the late 1990s.
What explains this disconnect? One explanation relates to the changing composition of the population diagnosed with diabetes during the past three decades. As access to healthcare and diabetes testing has expanded, more people have become aware of their condition who might have otherwise remained undiagnosed, particularly among economically disadvantaged populations. Moreover, people with more resources have a better chance of taking advantage of new prevention strategies and averting the disease. These positive developments in diabetes screening and prevention may have shifted the diagnosed population to include more people from lower ends of the socioeconomic spectrum.
Over the same time period, broad economic trends such as the rise of automation and increasing import competition created economic headwinds for Americans without advanced education—precisely the demographic that experienced the largest rise in people with diagnosed diabetes. As a result, the overlap among working age adults with diabetes and people facing eroding job prospects has grown, meaning more people encounter both challenges simultaneously.
These dynamics make proposed work requirements within the Medicaid system, not to mention straight-ahead budget cuts, particularly problematic. People with diabetes who are not working may very well want to, but they face a confluence of health and economic challenges. For those struggling to find work—and employer-sponsored health insurance—implementing work requirements risks removing a vital source of coverage when they need it most and contributing to a cycle of health problems and economic deprivation.
Employers should note that data gathered after the pandemic shows some improvement in employment rates among people with diabetes, possibly due to increased work-from-home opportunities. Those accommodations and flexible work arrangements show what’s possible when work adapts to health needs rather than the reverse.
A key for Congress and the Administration is to make sure that breakthrough treatments for obesity are available to middle- and low-income individuals. Failure to do so will only widen the economic divide between those at risk of developing diabetes and those with the means to prevent it. Expanding coverage of weight-loss drugs like Wegovy and Zepbound in both Medicare and Medicaid is the surest path to curtailing diabetes for millions of people. Early intervention before diagnosis could prevent not just medical complications but also result in substantial economic benefits.
Finally, researchers could more often consider economic outcomes as metrics in health intervention studies. Clinical trials in the United States rarely include endpoints such as employment. Collecting this information alongside health metrics like blood glucose levels when testing diabetes treatments could help identify strategies that improve people’s health and their ability to work.
The diabetes paradox adds an important dimension to efforts to reduce the burden of chronic diseases, including the Trump Administration’s Make America Healthy Again agenda. Better health is an important end in itself. But if we want people with diabetes to be able to engage in fulfilling work, addressing the social and economic contexts in which many people live may be just as important.
Jack Chapel is a scholar at the USC Schaeffer Center for Health Policy & Economics and a research assistant professor at the USC Price School of Public Policy.
