Limited health literacy is a $4.8 billion dollar issue for payers — Here’s how we address it

You can think about health literacy in three ways — personally, digitally and organizationally. 

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Personal health literacy is “the degree to which individuals have the ability to find, understand, and use information and services to inform health-related decisions and actions for themselves and others.” Related to personal health literacy is digital health literacy, which is “the ability to seek, find, understand, and appraise health information from electronic sources and apply the knowledge gained to addressing or solving a health problem.” Organizational health literacy is “the degree to which organizations equitably enable individuals to find, understand, and use information and services to inform health-related decisions and actions for themselves and others,” and is the area where healthcare organizations have the greatest capacity to improve the health outcomes of their patients. 

Health literacy’s impact on health outcomes

Research by the National Center for Education Statistics revealed that an estimated 36% of adults in the United States have basic or below basic health literacy, meaning that they have some difficulty understanding and reading health information. The same study revealed that 52% of adults in the United States had intermediate health literacy and only 12% of adults in the United States had what was considered proficient health literacy. 

Unfortunately, limited health literacy has been associated with higher hospitalization rates and increased likelihood of preventable ER visits,  and even higher mortality rates. From a cost perspective, patients with limited health literacy are estimated to spend an additional $143 to $7,798 per year on healthcare as compared to patients with proficient health literacy. For the U.S. economy as a whole, this spending may total up to $238 billion every year, or 17 percent of all personal health-care expenditure and adds $4.8 billion in administrative costs for health payers. 

Navigating the current healthcare climate

Given the impact on both health outcomes and cost of care, action to improve organizational health literacy is critical. Rather than shifting the burden of improved health literacy on members and patients, identifying organization-level improvements in how we communicate with members and patients through written communications, verbally, and digitally can advance large scale improvements across the healthcare system. This led Humana in 2021 to name improving organizational health literacy as an important strategic priority as part of our efforts to advance health equity. 

Beyond being a best practice for improving health outcomes, policy and regulatory requirements are increasingly calling on healthcare organizations to improve the clarity and quality of communications for members and patients. In 2023, the American Medical Association updated its health literacy policy (H-160.931), recommending that “all healthcare institutions adopt a health literacy policy with the primary goal of enhancing provider communication and educational approaches to the patient visit.” In 2024, a Centers for Medicare and Medicaid Services (CMS) final rule included a requirement for Medicare Advantage organizations to “develop and maintain procedures to offer digital health education to enrollees.”

Assessing and improving your company’s organizational health literacy

Evaluating how well your company is supporting the health literacy of members and patients is an important starting point in improving organizational health literacy. Tools like the Health Literate Health Care Organization 10-item Questionnaire and the Consumer Assessment of Health Care Providers and Systems Health Literacy Item Sets can provide a high-level organizational assessment, from which specific actions and strategies to better support members and patients can be built. 

Improving health literacy requires understanding of the concept across all areas of an organization. Healthcare entities should invest in creating trainings tailored to their services that are available to all employees. Humana provides virtual, on-demand health literacy learning sessions so that employees can participate as their schedules allow. Last year, we developed the Health Literacy Basics training series in response to a survey of 8,000 member-facing employees that revealed a desire to increase confidence in screening and addressing low/limited health literacy. Employees who have taken the training report high levels of satisfaction (average 5/5 stars) and increased confidence in identifying limited health literacy and providing appropriate support. We are also holding a learning series throughout National Health Literacy Month and all sessions will be recorded and available to employees throughout the year. 

Healthcare companies should also consider using independently created tools to assess the quality of member and patient communication materials. Humana is using the Agency for Healthcare Research and Quality’s Patient Education Materials Assessment Tool to assess the understandability and actionability of patient-facing materials and make modifications for clarity based on our findings. Other independently developed tools to support organizational health literacy include the Centers for Disease Control and Prevention’s Clear Communication Index, which walks users through to a set of open-ended questions about communication materials and scores the clarity of the materials based on the answers provided and the Agency for Healthcare Research and Quality’s Health Literacy Universal Precautions Toolkit. 

In clinical settings and other verbal communication, each interaction is an opportunity to ensure that members and patients have the support they need to navigate their care successfully. Providers should practice active listening, simplify medical terminology where possible and refrain from using jargon. Implementing the teach back method can also prove helpful in ensuring clarity of information. When using the teach back method, providers begin their conversation by asking patients what they understood about the healthcare information provided, followed by restating information that the member/patient doesn’t know or cannot recall and asking the patient to restate the information to confirm understanding. 

Improving health literacy should be a priority for all healthcare organizations and a responsibility that is understood and shared by all employees. By recognizing the prevalence of limited health literacy and doing our part to ensure easy to understand and actionable information, we are shifting the responsibility away from patients, supporting better health outcomes and decreasing healthcare costs for everyone. You can learn more about Humana’s commitment to advancing health equity for the members, patients and communities we serve by reading the Humana Impact Report.

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