The complexity of the U.S. healthcare system erodes Americans’ health literacy, Accenture asserts in their report, The Hidden Cost of Healthcare System Complexity.
And that complexity costs, Accenture calculated, to the tune of nearly $5 billion in administrative cost burden to payors.
Accenture developed a healthcare system literacy index to quantify the relationship between peoples’ understanding of how health insurance works and what a lack of understanding can cost the system. The index looks at consumer comprehension of health insurance terms like premium, deductible, copayment, coinsurance, out-of-pocket maximum, prior authorization, and networks (“in-“ versus “out-of-“).
Based on this methodology, about one-half of U.S. health consumers have good literacy – 16% “expert,” and 32% “proficient,” Accenture found. The remaining 52% of Americans have low healthcare system literacy: one-third with no experience, and 19% “novices,” in Accenture’s segmentation.
The bubbles above the consumers’ head list some of the question-conundrums Americans ask relative to their system literacy: “is the service covered?” and “which doctor can I see?” deal with the in/out-of-network uncertainties. “What does my doctor bill mean?” addresses medical bill literacy – the explanation of benefits wonkiness, the coinsurance and copayment concerns, and, simply put, what did the health insurance company cover?
Surprisingly, perhaps, one-half of the low healthcare system literacy folks finished college or have a graduate degree. And nearly all of these low-health literacy consumers have at least a high school diploma, Accenture found.
Accenture estimated the low healthcare system literacy costs on just administrative expenses, finding the costs were three times greater for people with low literacy versus high system literacy: $4.82 billion compared to $1.41 bn.
The consumer research was part of Accenture’s 2017 Customer Experience Payer Benchmark Survey of 10,000 U.S. consumers, conducted online in October and November 2017.
Health Populi’s Hot Points: The $4.8 bn cost of health system il-literacy for administrative expenses is just one piece of a larger health literacy cost conversation — and financial burden on the American healthcare system. This begs the question, what financial toll does low health system literacy take on clinical costs and patient outcomes?
This is a much bigger money question, explored in some studies we can point to to give us a sense of the huge financial and human toll that health literacy takes on a high-performing U.S. health system and health citizens alike.
The economic cost of poor health literacy in America is estimated to be as high as $238 billion. That is over 40 times the administrative cost burden Accenture calculated, at roughly 17% of total national healthcare spending in the U.S.
One lightbulb moment from the Accenture data is the relatively high degree of educational attainment that some people with low health system literacy have achieved. This strongly suggests that health literacy isn’t so much a matter of health education as of lack of good design for how personal healthcare finance in America is communicated and presented in those communications, whether via mail, text, internet portal, via mobile platform, on a large-screen computer or even a connected TV.
This is the opportunity to look beyond Old School health literacy education programs into how to leverage media, channels and platforms that everyday people use for other life-flows: personal banking, travel planning, or entertainment come to mind. THINK like Netflix, Capital One or, I daresay, Amazon, and we’ll better address healthcare system literacy.