Lower healthcare literacy has been linked to higher utilization, higher rates of hospitalization, and less use of preventive services, says one observer.
As health insurers continue complaining about overutilization and their customers complain about high premiums and deductibles, one analyst says the root of both group's dissatisfaction is that the health plans are not adequately educating consumers.
Health plans put ever-increasing amounts of responsibility on consumers, but 80% of Americans spend less than an hour researching their benefits options before choosing a plan, says Kim Buckey, vice president of client services at DirectPath, a strategic employee engagement and healthcare compliance company.
In addition, many consumers are not fluent in the appropriate definitions, she says.
"No one is paying enough attention to this," Buckey says. "The level of healthcare literacy in this country is abysmally low, with as few as 12% of Americans capable of really understanding the healthcare system, their health, and how their coverage applies. Lower healthcare literacy has been linked to higher utilization, higher rates of hospitalization, less use of preventive services, and of course those lead to higher healthcare costs for insurers and everyone else."
Most consumers take a passive approach and just avoid the issue of healthcare insurance as much as possible, Buckey says, which accounts for the huge percentage of consumers rolling over their health plans every year regardless of whether that plan still suits their needs.
Employers and insurers would both benefit from pairing the insured with benefits educators who help employees understand their options, she says.
Confused Consumers Make 'Poor Decisions'
"When they are presented with some of these new plans with high deductibles and options that they don't really understand, they just get confused and end up making poor decisions," Buckey says.
"There are people out there who think that with a high deductible plan they have to pay the full deductible if they see a doctor, so they think if they go in for a checkup or preventive care they're going to have to pay $2,000."
Insurers are missing the opportunity to educate consumers about the need for preventive care and options that can control costs for them but also the health plan, like going to an urgent care clinic or using telemedicine instead of going to an emergency room, she says. Most people do not know that they can shop around for the best price on prescriptions, for instance, assuming that all pharmacies charge the same amount.
Market and Educate All Year
The Summary of Benefits and Coverage (SBC) required by Obamacare was supposed to address this lack of education, serving as sort of an equivalent to the nutrition label on food items. That document has been changed several times as the government tries to improve its usefulness, and the continuing low healthcare literacy shows that the SBC has not yet fixed the problem, Buckey says.
She suggests that health plans should market to and educate consumers year-round rather than focusing almost exclusively on the open enrollment period as most currently do.
"We're seeing more and more employers move to what they call active enrollment, in which they require employees to make an affirmative decision about their coverage every year, trying to move them away from that passive acceptance that we see so much," Buckey says.
There is some evidence that health plans and employers are becoming more aware of the costs they incur from low healthcare literacy, she says.
"Healthcare is going to continue getting more complicated, so I think we will see more focus on addressing this healthcare literacy issue," Buckey says.
"There will be more drilling down to understand the needs of their audience, not just on the baby boomer versus millennial level, but looking at levels of education and targeting specific groups like young people moving off their parents' insurance and buying coverage for the first time."
Gregory A. Freeman is a contributing writer for HealthLeaders.