Addressing Health Plan Literacy: The Key to Accountable Care
Introduction
Low health literacy impacts costs, outcomes, and an individual’s ability to own their healthcare continuum. Specifically, poor health insurance literacy further complicates achieving effective payer-provider collaboration. Many consumers are unable to explain terms such as copay, co-insurance, deductible, etc. - however, this is considered basic health plan terminology. In order to make informed decisions and fully comprehend insurance benefits, consumers need to understand how much they are required to pay, how much services cost, what benefits are available-and more importantly, how to apply insurance benefits within the healthcare delivery system.
Defining the Problem
According to Forbes, the average U.S. consumers inability to navigate the healthcare system costs $4.8 billion annually. This is due to the added administrative expense for employers and insurers picking up the tab for patient medical costs such as out of network care, duplicate testing, or unnecessary care. According to Accenture, this translates into insurers and employers taking on $26 per consumer in administrative fees. Healthcare navigation isn’t an issue of having (or not having) a higher education rather, it’s more about understanding benefit information and empowering the consumer to apply their “know how” in the right setting and in the right way. In fact, one study by Accenture cites that nearly half of consumers with low health literacy are college-educated and 97% have graduated high school.
This issue became more obvious after the Affordable Care Act passed in 2008, causing many who were without insurance coverage to become suddenly insured. However, we quickly realized that there was built up demand for healthcare in America. Consumers were uncertain on how to select doctors and hospitals, or what kind of health plan they should pick. There was a surge of consulting firms pitching their expertise to help by way of creating “lay navigators” and incentive models for providers to offer education to their patients. But let us be honest, that only addresses the symptoms of low literacy, it does not truly improve it.
The rising costs of healthcare can be attributed to many factors, including low health literacy. According to the Kaiser Family Foundation, over the last decade the average deductible has doubled among employee sponsored plans. At the same time, most consumers remain illiterate to their plan benefits but are forced to hand over more of their earnings to keep insurance coverage. Enrollment in Medicare Advantage (MA) plans is also on the rise, with promises of improving the health status of our elderly and most vulnerable. This expanded enrollment is predicted to increase spending on MA plans to over 1.3 trillion by 2029. If we do not address health literacy in parallel with the increased popularity of employer sponsored and Medicare Advantage plans, we may only inflate costs further without improving health outcomes.
Solutions
There are several ways to close health insurance literacy gaps; one way is to shift to a value-based payment system. Value based systems are designed to hold providers accountable for helping patients stay healthy and financially reward them for a job well done. Improving health literacy is key to empowering patients to take on shared accountability of health maintenance in partnership with their provider. However, to truly transform the healthcare system, organizations will have to address health literacy more universally. In the Health and Human Services (HHS) roadmap for health literacy, they have identified the 4 “Ps” for delivering better value, and health literacy is imperative for each.
1. Empower Healthcare Consumers (People)
It is unfortunate but true that many health consumers do not understand or are not even aware of how much health services cost until after they have received a billing statement. According to one survey conducted by Avalere on behalf of the Robert Wood Johnson Foundation (RWJF), nearly 20 % of patients do not get health care when/if they have questions about the cost. To make matters worse, 42% said that when they are “unsure of their cost responsibility, they simply wait and address it when the bill arrives”, which is too late for informed decision-making. When one waits this long, decisions about care have already been made, and less expensive alternatives may no longer be available. HHS states that price transparency is an attribute of a health literate organization, and “requires telling patients what their out-of-pocket costs will be ahead of time”.
Empowering consumers to make informed choices means that information on quality and value is accessible and easily understood. Additionally, tools that support comparison shopping of health insurance plans allow consumer choices to be based on both cost and quality. Furthermore, integrating digital devices and the power of digital therapeutics into day to day routines can be immensely empowering for patients. Not only does it provide deeper insights on things like activity, sleep, and nutritional patterns, it can also extend the reach of the care provider in times of need. Consumers need useful, accessible, and understandable information about their health care options and general health status if we truly want them to feel and act empowered because after all, knowledge is power.
2. Accountable Providers
It is a well-known fact that the risks associated with managed care is slowly but surely being shifted to health care organizations and particularly primary care providers. There is a demand for greater responsibility to be taken for assuring that “patients get the services they need, when they need them”, according to HHS. To transform into an accountable care organization , where the services offered within your organization or practice generate value, health plans and care providers must become “health literate”. The Institute of Medicine (IOM) has defined 10 Attributes for healthcare literacy, many of them speaking to the role of the care provider. The IOM’s guidance includes developing organizational attributes to address “health literacy in high-risk situations, such as care transitions, medication regimens, and what individuals will have to pay for services”. The elderly population is especially vulnerable to the complexities involved in navigating insurance plan benefits. Elders can fall victim to their literacy deficiencies that often result in insufficient coverage that does not meet their health needs. According to a study by Health Literacy Research and Practice, when Medicare Advantage beneficiaries with inadequate health literacy select plans that do not meet their health needs, it results in reduced access to the care they need and higher costs for the care they receive. All health payer and provider organizations are accountable for helping patients navigate the healthcare system and access services that can improve health outcomes, and that starts with addressing literacy gaps.
3. Payment for Outcomes
The value equation includes improving cost, quality, and experience comprehensively — to improve one, the other two need considered. That is what makes the transition to value-based care a tricky one. Since we know risk is shifting to providers, it would also be a good idea to incorporate a health literacy strategy as a means to an end for value-based care. One way value-based payment systems quantify consumer experience is by basing a portion of health care payments on consumer surveys of the care and service they receive. Health plans and care providers get higher payments if their members and patients have better health outcomes, both real and perceived. Therefore, there is a financial incentive to use health literacy best practices and other strategies to improve payer-provider collaboration and communication. Patient experience for Medicare Advantage Star Ratings have historically been less of a focus for insurers. Focus to improve the consumer experience could enable insurers to outperform their competitors and provide a source of differentiation in the form of enhanced member experience. Those taking on risk will be more effective in helping consumers become partners in managing health when there is an intentional strategy on improving health literacy.
4. Preventative Care
Preventative care is the fourth “P” and is dedicated to prevention of illness and disease. The high costs and sub-optimal outcomes often associated with disease management can be reduced with proactive and focused preventative efforts. Health education and literacy play a vital role in prevention. Health plans and care providers can support consumers to make healthy choices by many means, such as using plain language when communicating with their members/patients. One way this can be done is by using the same words the patient uses to describe his or her illness in conversations with them that involve education or care planning, as noted by the Agency for Healthcare Research and Quality (AHRQ). Technology can play a large and effective role in preventative healthcare. Since preventative care is routine and can usually be planned for, using technology to remind health plans and their consumers about preventative care, such as a breast exam, is an easy tactic that can be applied to avoid disease progression. Additionally, health plans can leverage the mass amounts of data available on consumer behavior, social determinants of health, and health service transactions. These data, when analyzed, could provide deep insights into member emerging risks levels, and thus serve to trigger care interventions to prevent high risk illness and disease.
The Takeaway:
Transforming our healthcare system will not happen overnight or even within the next few years. As we prepare to navigate the post COVID-19 world, we all will be re-assessing our priorities and necessities. Health literacy has always been a strategic driver to lowering costs and improving outcomes. I believe that post COVID-19, closing health literacy gaps will be even more important. Healthcare of the future looks a lot more virtual and digital than it does today, as a result will require a different set of skills and knowledge. We should use this time to reflect and reset, and hopefully develop a refreshed perspective on what it will take to move things forward for ourselves, our parents, and our children.
References & Additional Reading:
Ten Attributes of Health Literate Health Care Organizations. Institute of Medicine (2012). https://nam.edu/wp-content/uploads/2015/06/BPH_Ten_HLit_Attributes.pdf
Health Resource and Service Administration (2019). https://www.hrsa.gov/about/organization/bureaus/ohe/health-literacy/index.html
The Empowered Healthcare Patient. Forbes (2011). https://www.forbes.com/sites/forrester/2020/03/11/the-empowered-healthcare-patient/#23e329565614
Talking About Costs: Innovation in Clinician-Patient Conversations. Heath Affairs (2018). https://www.healthaffairs.org/do/10.1377/hblog20181126.366161/full/
Low Health Literacy Costs US Employers 5.8 Billion Dollars per Year. Forbes (2018). https://www.forbes.com/sites/brucejapsen/2018/09/12/low-health-literacy-costs-u-s-employers-5-billion-a-year/#470d8a4033fa
The Hidden Costs of Healthcare System Complexity. Accenture (2018). https://www.accenture.com/us-en/insights/health/hidden-cost-healthcare-system-complexity
Achieving Value in Healthcare Through Health Literacy. Health and Human Services (2019). https://health.gov/news/healthgov-blog/201910/achieving-value-health-care-through-health-literacy
Key Steps to Improve Patient-Clinician Cost-of-Care Conversations (2016). https://avalere.com/insights/key-steps-to-improve-patient-clinician-cost-of-care-conversations
Health Literacy and Plan Choice: Implications for Medicare Managed Care. (2018) https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6608906/
Health Literacy Universal Precautions Tool Kit (2015). https://www.ahrq.gov/health-literacy/quality-resources/tools/literacy-toolkit/healthlittoolkit2-tool4.html
