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It's well understood that Type 2 diabetes can lead to vision loss, kidney damage and a host of other health problems. Now it appears the disorder may also be a signal of serious liver disease.

Canadian researchers have found that adults who are newly diagnosed with Type 2 diabetes are much more likely to subsequently develop liver cirrhosis, failure or require a transplant than the rest of the population.

But it's not a simple cause-and-effect relationship. Researchers believe that people newly diagnosed with Type 2 diabetes, a condition linked to excess weight or obesity, may slowly undergo liver damage from excess accumulation of liver fat over many years before and after the onset of diabetes.

The findings, published online Monday in the Canadian Medical Association Journal, provide more compelling evidence of the need for action to stop the rising prevalence of obesity.

"It is damage to your body," said Joel Ray, associate professor of medicine at the University of Toronto, physician at St. Michael's Hospital and one of the study's co-authors. "The idea is there's a wear and tear effect on a lot of systems."

Dr. Ray said the research stems from a growing understanding of the relationship between insulin resistance and fat metabolism. In recent years, scientists have determined that the liver can be a major storehouse of fat. The accumulation of fat in the liver among those who don't drink excessive amounts of alcohol is known as non-alcoholic fatty liver disease.

Although it doesn't necessarily mean a person's health is in dire straits, Dr. Ray and his colleagues believe it may be an indicator that a person is resistant to their body's insulin, which is needed to regulate blood sugar. Over time, this resistance can cause the pancreas to "burn out," he said, and contribute to the development of diabetes and liver injury.

"People who get Type 2 diabetes likely have a great state of insulin resistance and very likely a long preceding state of also liver injury," Dr. Ray said.

The study examined data from nearly 440,000 Ontario residents recently diagnosed with diabetes and more than two million people without diabetes from 1994 to 2006. At the end of the study period, they found that about eight in every 10,000 people with diabetes had developed serious liver disease, compared to approximately four in every 10,000 people without diabetes.

Although the risk of developing kidney damage is higher than the risk of liver disease for those with Type 2 diabetes, researchers highlight the fact that there are few viable and readily available therapies for patients with serious liver damage.

Dr. Ray and his colleagues suggest that it may be time to consider screening people with Type 2 diabetes for liver disease.