Healthcare Literacy

Healthcare Literacy is the ability to read, retain, and apply basic health and medical information needed to make healthcare decisions. It’s knowing how to get quality healthcare. What does that mean exactly? How about I use the following example: Each time you see a doctor and get a medical diagnosis, you should be sent home with information on your condition or injury, test results, and your treatment plan. Health Literacy is the ability to review that information, make decisions on the kind of care you want. Also, being able to follow the instructions so you heal as quickly as possible and don’t require unnecessary and costly follow-up care. Beyond being able to communicate with your doctors and understanding medical and insurance terminology as defined as healthcare literacy, one factor that may have an even greater impact on the quality of care you receive would be knowing how to select a good doctor in the first place. The last time you saw a Doctor, Physician Assistant or Nurse Practitioner, did you do research on your in-network providers, get any patient review information, verify they are board certified in the field you are seeing them for or check to see if they have a high number of malpractice suits?

Another example that a lot of people, including half of your employees (according to the CDC 48.9% have taken a prescribed medicine in the past 30 days) may be able to relate to, would be for prescriptions. Do you shop pharmacies to see which has the best price on your medications, or consider if there are generics available at a lower price? Applying patient consumerism to how we shop for medical care and medicine will reduce costs. That goes beyond the traditional definition of healthcare literacy that is measured by an individual’s ability to read prescription labels, know what you are taking it for, how it interacts with other medications you are on, and how to follow the proper dosage instructions, which are more aimed at reducing the likelihood of mistakes or medical mishaps. 

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Resources to improve your employees’ health literacy:


What’s the cost of low healthcare literacy?

Think about the last time you purchased a car. What was that process like? Did you spend time researching the make and model that fit your needs? How about checking out quality ratings or reviews through a resource like Consumer Reports? Most people at the very least will shop online to find the best price or value they can. All that effort goes into selecting a car. Why is it difficult to take half an hour to research which doctor to see or where to go to have a procedure or surgery? Because no one teaches us that is how we should do it.

Our hope would be that everyone would have the skills necessary to get the best medical care, but the reality is, only 12% of all adults in the U.S. are considered “proficient” when it comes to health literacy. What that really means is that the overwhelming majority of your employees don’t have the knowledge to properly select a doctor, understand a diagnosis, and make good decisions when it comes to selecting a treatment and following a treatment plan. The results of this huge problem are many. Arguably, two of the largest impacts on organizations and employees are the financial cost of care and the human cost of not getting the best care possible.

The financial impact of healthcare illiteracy for companies, is healthcare costs are rising an average of 5.5% per year. That is nearly 3 times greater than inflation. For most companies, healthcare is the second or third largest line item in the annual budget. The yearly increases organizations are facing are squeezing profits and in many cases, are simply not sustainable.

Health Illiteracy Facts

A few of the traditional approaches organizations take to address the cost increases are:

  • Taking renewal to market: Bid it out to carriers
  • Change plan designs or increase financial risk (adjust deductible and out of pocket max)
  • Analyze the claims that are driving the increase: but what decisions are made with that analysis?
  • Refining the formulary: Often making it harder for employees to get on the drugs they need
  • Moving to High Deductible Health Plans (HDHP)

The result of this annual dance is increases continue to significantly outpace inflation. Think of what your organization and even you personally were paying for your medical insurance plan 10 years ago. Now if we continue our same efforts to contain costs listed above, we can probably expect a similar increase over the next 10 years. Can your organization afford that?

So why aren’t traditional methods that we deploy fixing or at least helping curb the costs? Because they don’t address the real issue which is that the patients don’t know how to shop for and use healthcare effectively. And that is the real driver of the claims, and we all know the renewal is all about the claims.

Beyond the financial aspect of the health literacy problem and what may be even more important, is the human cost of patients not being engaged. Claims are the driver of premium increases. When you look analytically at claims, they are conditions, procedures, tests, images, prescriptions and dollar amounts. What is often overlooked is that they are also people. Those people are being over treated, misdiagnosed, utilizing the improper level of care, and overpaying for services. In-fact, about 30% of healthcare spending is waste or unnecessary. Look at that from the patient standpoint: that means your employees are having surgeries, tests, and procedures that they should not have to go through. There is time away from work, stress, pain, and anxiety that they deal with because they don’t know how to find the best, or most appropriate doctors and facilities and don’t know that they need to be engaged, ask questions and communicating effectively with their doctors. That is their experience because they are never taught how to do it. How effective can that employee be when they are at work, while they are dealing with those issues, without any guidance?

How many organizations or companies would purchase and implement a new software, or piece of equipment that costs millions of dollars and then just let their employees have at it, without any training to teach them how to use it? Or maybe even more importantly, how to make sure they don’t break it? That is traditionally what happens with health insurance plans that companies provide to their employees.

We are also seeing that employees are asking for tools to help them make the right medical decisions. With the increase in the number of organizations moving to HDHPs where more cost is being shifted to employees, we are seeing employees acknowledging that they don’t have the skills necessary to get the right care.

If you look at any list of the 100, or 1,000, or 10,000 best employers to work for, a common theme that lands companies on those lists are that they value their people. Either through culture, compensation, benefits, programs, flexibility or some combination, they made the list because the way they treat their employees makes people want to work for them. Those organizations understand that one of, if not the most important asset they have, is their talent. Retaining and attracting the best talent is vital for organizations success and innovations. Providing a health literacy program that employees are looking for will increase the appreciation your employees have for the benefits you provide. Imagine the level of gratitude that would be generated by an employee that was able to avoid an unnecessary surgery for themselves or a family member, because they were educated on second opinion options available to them, and they found a great doctor that provided the right diagnosis to avoid the wrong treatment.

Whether your company is more compelled to do something about containing the cost of your health plan, or you are motivated to make sure your employees are taken care of, healthy, and armed with knowledge to ensure they have the resources to get the best care possible, the solution remains the same. You need to teach your employees how to get the appropriate and best care possible.

What are the specific challenges your employees face that are driving up costs and causing suboptimal results?

The following guide will identify what you can do to improve your employee’s literacy levels and provide you with ways to reduce healthcare costs for your organization. 


What’s happening:

The United States had $3.2 trillion in healthcare expenditures in 2015. In-fact, according to the National Association of Medicine, there was $210 billion spent on excess medical services that year.

recent survey of 2,106 physicians looked at over treatment from the provider perspective. According to the survey, the doctors estimated that 20.6% of medical care was unnecessary. That includes over 24% of tests and 11% of procedures. The main reason (84%) for overtreatment was listed as a fear of malpractice suits. Also interesting was that 70.8% of respondents believed that physicians were more likely to provide unnecessary treatments if they profit from them.

Another example of unnecessary overtreatment comes from this story about breast cancer patients that were treated with extended radiation schedules even though the American Society for Radiation Oncology (who writes the treatment guidelines) endorsed a shorter treatment course based on published studies in the New England Journal of Medicine. According to Kaiser Health News, only 48% of eligible patients received the shorter treatment course which reduces cost, inconvenience and additional side effects of the extended treatment.

Why it’s occurring:

It’s pretty simple, we have a fee for service healthcare model in the US. We pay for each visit, aspirin, bandage, test, lab, image and even surgery by the minute.

What we don’t do is pay based on getting better. That would incentivize providers to get patients healthy with the least number of tests, and images possible so they could move quickly to the next person. Instead, the way hospitals and clinics increase their revenue is through the ordering of tests, images, labs, follow up visits, etc. Because of that, there really is no pressure to reduce costs from their perspective.

If you compare the goal of the provider which is increasing revenue and the goal of the patient which is getting well, it is easy to see there may be conflict because more tests don’t necessarily mean better care, all it means is more tests. That is evidenced by the fact that we pay the most per person and the result is that the United States shows up in 43rd place, in life expectancy.

US Per Capita Healthcare spending vs other develped countries

The amount of overtreatment we have can’t be blamed entirely on hospitals revenue generation, physician fears of malpractice, or compensation for additional services. The patients play a role as well. Many patients have a misguided perception that more care equates to better care. As seen in the life expectancy of developed nations, that isn’t the case. Patients can also be driven by fear. If they are dealing with a major diagnosis, cancer or heart failure, for example, they may be less likely to ask questions about the images or procedures they are getting. If your employees were empowered with the knowledge and resources to help them identify the best doctors and facilities in their network, and tools to help them make better healthcare decisions, how many would not want to take advantage of that program?

What to do about it:

There isn’t anything that we can do about the fee for service structure of our system. What you can do is create awareness among your employees that they need to be engaged patients, if you want them to be good stewards of your organization’s medical plan.

You can help your employees to reduce the likelihood they will experience overtreatment through education. Make employees realize that their goal when getting any medical care should be to get better. If nothing else, get them to ask the question, “will this help me get better?” any time a test, image, treatment or procedure is recommended by their doctor.

 Communicating the following consistently will empower employees to make the behavior change necessary to become engaged patients. You can use staff meetings, newsletters, flyers, posters, email, intranet sites or however else you communicate with your staff to educate and communicate the following throughout the year:

Get Familiar With Your Medical Benefits:

Do your employees know their financial responsibility for their medical care? Make sure people know what their out of pocket max, deductibles, and prescription co-pays are from a definition standpoint as well as the dollar amounts.

Ask Questions:

Work with your employees so that any time a test, procedure, treatment, image, diagnosis, or surgery is recommended, they ask why, what the benefit is and are there any alternatives that should be considered.

  • Are there other conditions that could explain their symptoms?
  • What led the doctor to the diagnosis?
  • What are the treatment options?

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What’s happening:

Misdiagnosis is far too common. The Mayo Clinic released a study where 88% of the patients that were referred to the Mayo, 21% received a completely different diagnosis and 66% had their diagnosis refined, or redefined. So 88% were either being treated for the wrong condition entirely, or they were likely not getting the most effective treatment. There are many factors that go into someone getting the wrong diagnosis. Sometimes the fault lies at the doctor’s feet and sometimes the patients, but often it is a combination of the two. With only 12% of patients having a proficient level of healthcare literacy, few of your employees are likely able to effectively communicate their symptoms with their doctors or know what questions they should ask to help their doctors reach the correct conclusions on their condition and treatment.

Why it’s occurring:

Doctors are working on a limited amount of time with patients and frequently very limited information to make their diagnosis. A doctor recently explained the problems with misdiagnosis like this: If a patient comes in and wants to know if they are pregnant, there are tests (blood or urine) that can definitively check for that. If that same patient came in for headaches or abdominal issues, there are a hundred different conditions that could be causing their symptoms. So the doctor has to guess. It is a guess based on education and experience, but it is still a guess. And to make it even more difficult, most patients aren’t very good at communicating their symptoms and concerns with their doctor, so the information used to make that decision is often incomplete.

What to do about it:

Getting access to the best doctors will help ensure the best possible care. Getting great care, and getting well as quickly as possible costs less. Provide information and tools to your population to help them get the best care.

Educate, Educate, Educate:

Let your employees know about the problem. You could even just ask during a staff meeting if anyone has had a family member that was treated for the wrong condition. Most of the time in a group setting you will find one that is willing to share their story.  Often, those personal anecdotes are more eye-opening than a Mayo Clinic study.

Ask Questions:

This one is going to get repetitive. Patients that are engaged and asking good questions will improve the care they get. If you don’t know what to ask, use this guide to get you started.

Get a Second Opinion:

If you want your employees to avoid being among the 88% that are misdiagnosed, help them understand how, when and why they should consider getting a second opinion.

Also, teach them about their options. Does their medical plan require a referral to see a specialist? Do they have a narrow network? How can they find a great provider within the system they have? Again, there are two options to make your employees aware of. One, they can either find an in-network provider to get a second opinion or provide them with instructions on how to use your carrier’s on-line provider search tools, to get a list of in-network specialists and how to research them to find the best. Or two, check out an on-line option like MyConsult by Cleveland Clinic where individuals can pay out of pocket to get access to their top specialists for 1,200 different conditions without having to leave home.

Improper Care

What’s happening:

There are increasing options that your employees can use to access care ranging from the low cost and convenience of telemedicine to the high cost of going to an Emergency Room. The good news is that if the right level of care is accessed at the right time and for the right condition, the patient winds up with the optimal value. Unfortunately, not enough people are aware of all the options they have or when to access them. Telehealth which is estimated to be able to cover between 60 to 70% of all office visits depending on the vendor is the least expensive option coming in around $50 for an appointment. Compare that to an average of $125 for a typical clinic office visit, or $900 for an ER visit. The problem is for a sinus infection, for example, your employee may access any one of those options and no matter if it costs $50 for a telehealth appointment or $900 for an ER visit, they wind up with the same antibiotic. Obviously, in that situation, telehealth would be the best value but utilization numbers for Telehealth typically come in under 10% for companies.

Why it’s occurring:

Health illiteracy is to blame yet again. People just don’t know what options they have and how the level of care they select impacts them financially beyond maybe the co-pay. They don’t connect how overuse of Emergency Rooms by an organizations’ population results in increased premiums next year. Telehealth isn’t always the best choice, sometimes a physical exam is required, but there are still decision to be made on how to get that exam and where you should be seen. Should it be in a clinic? Is a General Practitioner or Specialist vs a Nurse Practitioner or Physician’s Assistant most appropriate? Maybe an urgent care visit is necessary. It is more costly than an office visit at the clinic, but sometimes the injury or illness needs to be treated quickly. Urgent care for those kinds of scenarios is great compared to going to the Emergency Room for non-life threatening situations.

What to do about it:

Let your employees know how their use of healthcare impacts the company and them. Let them know what drives premium increases (overuse, improper use, unnecessary treatments, etc.) and give them tools to help make those decisions. A common problem we see is high ER utilization for non-emergency situations. Emergency departments are filled with people who are there because it may be more convenient than waiting to see a general practitioner. Most people, when provided with the information on the cost of going to the Emergency Room vs. an Urgent Care, walk-in clinic or telemedicine, will make the correct choice, especially when they know about the convenience of the alternatives.

Healthcare Education:

I know this one is probably getting on your nerves by now! However, teaching your employees about the care options they have and the value of each, will help your employees get the most appropriate care. It also will save the company money and lost productivity due to sick days.


Virtuwell (a telehealth vendor) has indicated that almost 2/3rds of their utilization come during cold and flu season. If your organization is providing a telehealth vendor to your employees or they have access to it for $50 or less, promote the use of that option leading up to, and during the cold season. Make it consistent and targeted messaging throughout the year.


Consider if providing a no cost to the employee telehealth option is right for you. The average savings of each telehealth visit is $105. If your organization is self-funded, it may be worth it to you to pay for it to save the claim of an office visit against your plan. Paying the cost of telemedicine for your employees incentivizes the correct behavior.

Overpayment For Services

What’s happening:

There is an incredible lack of transparency when it comes to medical care. For some reason, that has become okay. In 2016, we actually passed the $10,000 mark per person spent each year on healthcare. Most people know exactly what they get for anything else they spend that kind of money on each year. However, most of your employees have very little idea what they get for the 10k spent on health care and coverage. How often do you buy anything without knowing the cost like we do when we have a test, image or surgery? When is the last time you even thought to ask how much it was going to cost when your doctor said you needed X-rays or a MRI? There is medical cost information out there, you just need to know where to find it.

Why it’s occurring:

Because the consumer of healthcare and the provider of the healthcare service no longer agree upon a payment for a service. Before everyone had medical insurance, the patient and the doctor agreed to a payment. After the adoption of the 3rd party payer system, where most people purchase medical insurance through their employer to protect against financial ruin due to catastrophic illness or injury, the two parties that have a vested interest in the transaction, no longer have a seat at the table when it comes to setting prices.

Insurance carriers and hospital systems which are frequently becoming one in the same today, negotiate prices and services with each other that will or will not be covered without the patients having any say. And the patients, have become accustomed to the process where they purchase blindly.

Another reason that your employees likely have no idea what they are paying for is the billing practices of healthcare providers. Every item and service is assigned a CPT code. So what is actually included in the bill is a combination of numbers and letters that is assigned a dollar amount. Unless your employees are billing specialists, they really have very little chance of successfully deciphering that code.

What to do about it:

You need to get your employees to start purchasing healthcare like they do everything else. Search for cost, quality and make the decision that provides the most value.

Price Compare:

For non-emergency services, MRI’s, prescriptions and some other services, there are ways to price shop before making a purchase. Calling a clinic or hospital before having a test or surgery to request price estimates is acceptable and encouraged. Your insurance company can also provide price comparison tools if they have them. More likely what will be successful will be letting your employees know about cost comparison tools like:

Review Medical Bills:

It is estimated that between 40 and 70% of medical bills have errors. Asking for detailed versions of bills and explanation of benefits (EOB) is required to have a shot at figuring out what the hospital is charging and what the insurance company has discounted or paid for. Without that information, your employees have no chance. There are also companies that will review bills for errors and may even try and negotiate a lower charge on behalf of your employees:


If you want to attempt to curb the healthcare cost increases your organization faces moving forward, you need to empower your employees with information and resources that will help them to change their behavior from passive, to engaged in their medical care. Increasing the healthcare literacy level of employees is the one thing that you can do that can have an impact on the wasted spending. Through a literacy program, you can teach your employees how to reduce the frequency of overtreatment, empower them to select the correct level of care so they get the best value, provide them quality review tools they can use to select the best doctors (which will help them to reduce the chances of being misdiagnosed) and educate them on how they can avoid overpaying for medical services. If you truly want to be successful in doing something about the cost of your medical plan, it will take effort or resources to do so. Each of these subjects needs to be communicated on a consistent and ongoing basis. If you can successfully communicate the value your employees will get from being engaged in their care, asking questions of their providers, and shopping for cost and quality, they will apply true consumerism behaviors to how they purchase healthcare. Finally, that is how you positively impact your financial and human costs. 

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