Lower health literacy status has been linked to serious financial consequences for the healthcare system. This is because people with low health literacy skills use more healthcare services and often have greater prescription compliance issues than do those with higher health literacy skills. But how many people are we talking about?

For every 100 people in the U.S., only 12 of them have proficient health literacy. A little more than half of us have intermediate health literacy, and one out of three U.S. adults have what is considered basic or below basic health literacy. Pairing these numbers with data from the 2003 Medical Expenditure Panel Survey (MEPS), it is estimated that between 7% and 17% of all personal healthcare spending in the U.S. is due to low health literacy skills. This costs the U.S. economy anywhere from $106 billion to $238 billion each year!  However, when one factors in the future costs of low health literacy, its real present-day cost is closer to $1.6 trillion to $3.6 trillion!

With figures such as these, health literacy is something that touches all of us to some degree. Even those few with proficient health literacy are affected by the economic impact low health literacy has on our society.

To explore how this is so and to promote discussion during Health Literacy Month on the far-reaching implications of health literacy issues, we spoke with Colleen C. Davis, a former Physicians Assistant and the current Delaware State Treasurer.

Bill Stone:                  From a financial perspective, what do you wish people knew about health literacy?

Treasurer Davis:     One area that would be helpful for people to know more about is the cost of specific services. The cost can greatly differ from one practice or site to another, and under specific contracts with health providers and insurance companies. Greater transparency in the costs prior to receiving care would be extremely beneficial to the average consumer.

Bill Stone:                  Before you were Treasurer, you were a Physicians Assistant. How does your healthcare experience inform your work now?

Treasurer Davis:     Much of my experience in the world of healthcare and in actual hands-on interaction was in the field of Neurosurgery and Emergency Medicine. I typically saw people at their most fragile moments. It was this experience that led me to go on to consulting in the healthcare industry to help people better understand and consume care, and to help healthcare systems offer better care. As a consultant, I had contracts from the West coast to the East coast and through the middle. I saved healthcare consumers as well as healthcare systems millions of dollars by helping to identify gaps, not only in care but in knowledge and information. It was my hands-on experience dealing with patients seeking care at those most critical of times that caused my desire to help people make better self-care decisions.

Bill Stone:                  Some argue that this issue doesn’t apply to most U.S. adults since about half of us have intermediate health literacy, not basic or below basic health literacy. Do you agree or disagree, and why?

Treasurer Davis:     I’m going to be a politician for half a second here; I partially agree, and I partially disagree. I think that the assessment that nearly half of U.S. individuals have intermediate health literacy is well founded and studied. Yet, we see immeasurable, rising, ballooning costs in care. And so, I think it still speaks to a need for improved health literacy. Some of the innovative, life-saving research that is going into the care that we receive today is changing at such a rapid pace that it is very difficult for most individuals to stay up to speed. And I think that deciding between A, B, or C treatment of care or whether a research study may be something to consider will still be a challenge for the average individual who has an intermediate health literacy level. If we don’t have true cost transparency, it doesn’t matter; it makes that decision-making process very difficult for anyone.

Bill Stone:                  How do you envision the economy and health literacy intersecting as you look ahead towards the future?

Treasurer Davis:     We’re at this stage where we have attempted to make some changes in how we deliver care for a few years and I think there’s a great opportunity here to start taking a look back at what was effective and how we might be able to tweak some of those care models – things like ACOs, Collaborative Care Networks, Accountable Care Organizations, and some of those upside and downside risk contracts that we see developing more and more. The other thing that generally would be helpful as we start to get a better understanding of our global or population health metrics is to determine if the care we are giving is really cost effective. Looking back will give us greater clarity in how health literacy is impacting not only the economy of our healthcare system but also healthcare outcomes. Technology is coming alongside and helping us to track some of that information a lot better, and so I think we are in a really great position right now to start making some of those impactful changes and tweaks in what we have been doing for the last couple of years to see what is most effective.

Bill Stone:                  Is there anything that we haven’t discussed that you think is important to add?

Treasurer Davis:     One thing that has been missed in some of these conversations is the impact of tort reform and how some of the expense that goes into healthcare is quality assurance. We’ve become better at guiding and implementing quality improvement initiatives across the healthcare system, but there’s always work to be done. The question is do we have the same type of liability reform that should go hand-in-glove with that type of initiative. I think it still becomes very difficult for individual physicians and others to open new practices and step out there if we don’t see some of that economy hitting those individuals as well.


The above interview has been lightly edited and condensed for clarity.

Sommer Consulting thanks the Treasurer for sharing her valuable time and expertise. If you have any inquiries about government services with which the Office of the Delaware State Treasurer can assist, please feel free to contact them at 302-672-6700.

You can learn more about health literacy by visiting https://sommerconsulting.com/category/health-literacy/.

Posted on October 24, 2019 in Health LiteracyHealthcare