Hi,
I cannot answer all your questions but am wondering if he is actually borderline Type 2? It seems odd that he has been put on insulin if he is borderline or maybe he has Type 1.5?
There are risks with bipolar meds that bring on Type 2 diabetes but it is sometimes the lesser of two evils and the diabetes has to take a back seat.
As to the two Hospitals getting their act together, it would seem a priority in his case. Is there any chance that you could write to both Depts. and explain your concerns about the lack of communication?
Does he have visits from a CPN? If he does then, with your friend's permission, you could be there for the next visit and put forward your concerns on behalf of your friend.
Hopefully others will be along with more suggestions.
Take care,
CC.