Health insurance literacy and the unseen costs of health care in the US

This is the third part in a three part series on health literacy. The first was about identifying the competition. The second was about health care literacy. This post is focused on the topic of health insurance literacy. 

Health care in the United States is big, bulky, and complicated. Anyone who has spent time trying to understand their insurance benefits, let alone receiving care, knows just how dysfunctional the health care system can feel to the average person.

As I learn more about health care, I have come to realize how much I didn’t and still don’t know about how it works in the United States. As you may know, my background is in government relations and business, and not as a health care provider. I have no clinical experience other than supporting important clinical functions that help people get well after feeling ill. Despite extensive time, reading, and research of my own, I realized that if areas of our health care system are still a mystery to me, then there is a lot that the average patient who comes to us through the emergency room will not know, ranging from how they receive care, their diagnosis, and the cost of their care.

I remember the first clue I had that the US health care system was broken. When I left my first job to start my next professional opportunity, I opted in to COBRA benefits for my health insurance coverage. I opted in to both a medical and dental plan. I went to the dentist and the claim was denied by my insurance. I went back and forth with the COBRA administrator and the insurance company because one saw that I had coverage, the other did not. When I asked the COBRA administrator to call the insurance company to reconcile the difference, the response I received was “that is not my function”.

My reaction was one of confusion and frustration—how could the administrator for my insurance company not be able to solve an issue relating to their company of employment? Wasn’t that their job? I had thought I was doing everything right, but was still being denied access to the benefits I was paying for.

Feeling hopeless, I asked the COBRA administrator customer service representative what they would do if they were in my situation. “Sir, people in your situation generally have success by calling us, putting us on hold, then calling the insurance company, and merging the calls together”. So that is what I did and it did fix the issue. Reflecting back on this experience, I am still baffled, but thankful that I was able to resolve the issue. I cannot imagine how many other individuals went through the same struggle, but were not able to obtain a successful result.

I did some research at that and found out that 25% of the cost of health care in the United States is administrative, not in treating patients clinically. That means hospital overhead (roles like mine), and paying people to work in the insurance industry account for 25% of spending. As a hospital administrator, that feels high. But when you include the insurance companies in that percentage, it makes more sense.

On that point, in the American College of Healthcare Executives latest issue of the Journal of Healthcare Management, there is an article on health insurance literacy. Not surprisingly, my suspicions were confirmed. As it turns out, my COBRA experience was not unique. It turns out that many people struggle with even the basic terminology that all insurance companies use on a daily basis for pretty much any and every plan they offer. These are terms like co-pay, premium, and deductible.

Many hospital patients will struggle with this gap in health care literacy throughout their care, even though many will not explicitly express it. Patients often can feel like they may not understand their diagnosis or reason for their symptoms. They may not understand the treatment they are being prescribed, they often have trouble identifying caregivers (physicians, nurses, techs), and they can get especially lost in understanding the cost of their care and how to ultimately pay for it.

This is a size-able gap, but one that can be bridged without a major system overhaul. A first step is providing education proactively. Next, insurers need to educate beneficiaries on the basic terminology and benefits of their products. Insurers and providers can and should cooperate in order to change some of our laws to produce fewer bills for the patient, including their explanation of benefits (also known at EOB—aka “this is not a bill”). Finally, insurers need to simplify their processes and stop denying claims for reasons that have nothing to do with fraud, waste, or uncovered services.

Health care literacy is our responsibility. Providers and administrative partners must simplify the healthcare system while also educating consumers/beneficiaries. We should not assume that the consumer will know everything about health care that we know industry on a daily basis. The improvement of health care literacy will help to improve patient care, which should be the ultimate reason why we do what we do.

KEY TAKEAWAY: It is our responsibility to educate consumers on navigating the health care environment, including insurance. We can do so by simplifying our system and working to change laws that no longer make sense. Together, we can make a difference.

Competing with health care literacy

This is the second in a three part series on healthcare literacy. The first was about identifying the competition.

Think about what the average patient knows about a hospital. If all the consumer knows about a hospital is from TV, what are their expectations?

If what Hollywood shows a patient is all he knows, imagine how disappointed he is to sit for hours in an Emergency Department. After a long wait, a patient gets a bed in the department with doctors and mid-level providers who appear to be moving slowly ordering tests and waiting for the results.

The average patient may be thinking, “Isn’t it supposed to be an ‘Emergency’ room? Why is everything so slow? Where is George Clooney?”

The Institute of Medicine defines health care literacy as, “the degree to which individuals have the capacity to process, and understand basic health information and services needed to make appropriate health decisions.” It turns out that most patients, even well-educated ones, can be health care “illiterate”. For some patients, their first experience may also be their first time admitted to a hospital.

The University of North Carolina Chapel Hill has put together this helpful data map to show health literacy estimates based on the 2003 National Assessment of Adult Literacy (NAAL). The US Centers for Disease Control (CDC) has some basic facts and materials available on health care literacy in the United States as well. The data shows that there are many communities in the United States where the population has low health care literacy.

My working theory is that health literacy is one of the health care industry’s biggest competitors. Add in issues with health insurance literacy (which I will discuss more next week) and improving the patient experience is a real challenge. Patient experience is about demonstrating service behaviors like smiling, using a patient’s name, and checking on them to meet their needs, but it is also a lot more than that. Patient experience is also about education. Patients expect clinicians to be excellent teachers while being expert care givers.

Overcoming gaps in health care literacy requires empathy, emotional intelligence, and communication skills. Empathy and emotional intelligence help clinicians learn when a patient or their family does not understand, even though they may not voice their confusion. These concepts are about understanding how families get and share information with each other about the patient. It is about getting one level deeper with the patient and family to build trust.

Communication is another obstacle. Some days, I spend all day in meetings watching people present information. I listen to how clinicians explain things to patients. We have many opportunities for improvement in this area. There are some helpful tools out there to improve communication in health care settings, like Getwellnetwork. Still, technology will not do all this important work for us. Much of delivering care is still direct person-to-person contact.

As an industry, we must get better at practicing these crucial skills. Recently, I learned about a helpful tool called the Hemingway App. The site runs an algorithm, which makes sure writing is understandable to the average person. In fact, I experimented with putting this blog posts through the site.

Next week, I will post on health insurance literacy, a related topic. The health care industry must improve in how it helps people understand their entire care experience, including billing.

KEY TAKEAWAY: Assessing a patient’s health care literacy can help clinicians reach patients. Clinicians can help patients understand their condition through empathy, emotional intelligence, and communication techniques.

Who is your biggest competitor?

I was fortunate to attend the 2019 Quest for Excellence Conference for the Malcolm Baldrige National Quality Award. The process and criteria for the award are managed by the National Institutes of Standards and Technology (NIST), which is a part of the US Department of Commerce.

The award criteria are a series of industry-specific questions published by NIST. The criteria are detailed and rigorous, asking many process oriented questions, including how well organizations know their processes, how well they are followed, and if the processes yield positive results.

The award winners are always extremely impressive. Many of these organizations make the “Baldrige journey” for a decade or longer. My current employer, Adventist HealthCare, is on its own Baldrige journey and it’s been an immensely valuable learning experience for both the organization and personally, for myself.


The Baldrige Criteria frequently asks the organization to identify its competitors and assess how it performs relative to its competition. Most businesses view the competition as other similar businesses offering similar products. For example, if you are opening up a neighborhood coffee shop, you may identify your competitors as the closest Starbucks, Pete’s Coffee, or the closest neighborhood McDonalds. After identifying the competitors, you would need to collect their data and show your shop’s performance results relative to theirs.

However, one winner this year took a different tactic when answering competitor questions. The Alamo Colleges District, based in San Antonio, TX, identified its main competitor as poverty. Alamo Colleges District is a group of higher education institutions offering 2-year degrees. They expressed during the conference that many students were not completing their schooling because of the cost, not just the cost of attending classes, but also of food, housing and other basics for living.

So, in their case, Alamo Colleges District determined that the choice for students was actually not whether to go to Alamo or another school, but whether or not to successfully complete school at all. Alamo rightly then identified their competitor as poverty and took steps to mitigate it, such as establishing a food pantry for students, which has since expanded to a full scale, “shop” in recent years.

Alamo teaches us an important lesson in thinking differently about our work. For many of us, the real obstacles we face are not relative to other businesses but relative to broader challenges. In health care, we are struggling with similar challenges. In Maryland, hospital revenues are capped, based on the needs of a population. Unlike other businesses, more business (volume) does not mean more money. As a result, competition between hospitals still exists, but has lessened. One leader aptly described the sentiment as “coopertition” (cooperation and competition).

From the patient’s perspective, there are many breakdowns due to problems with “health care literacy.” This includes educating health care consumers on topics like how the body works, how to be compliant with treatment, or how insurance works to cover their care. These practical skills in navigating the health care environment in the United States are lacking, and a system that makes it simpler for consumers is probably still a ways off.

Health care literacy will be the subject of my post next week. For now, think more about your competitors. Is it really other businesses in your area, or is there plenty of business to go around except for some external environmental factors that are limiting?

KEY TAKEAWAY: Correctly identifying your competition in business can be a deeper question for leaders to comprehend. Taking time to correctly identify competitors can help the business stay focused on its mission and achieve its vision.

A Snowball in June

The Institute for HealthCare Improvement (IHI) is one of the preeminent think-tanks in the healthcare industry today. The IHI created and coined the term “triple aim” which is a framework around how to reform the healthcare system in the United States.

The triple aim states that healthcare in the United States should evolve to:

  • Improve the patient experience of care
  • Improve the health of populations
  • Reduce the per capita cost of healthcare

So according to this idea, the industry needs to get much better at its core work of improving patient health and experience while reducing cost. How do we do better without more investment and spending?

The answer is that this question relies on the premise that healthcare in the United States is already optimized from an operations and cost perspective. In reality, it is far from it. As a country, our healthcare costs are among the highest and our outcomes are in the middle of the pack. We can and should do better, but it must be done through creative thinking and approaches that find ways to do more with less.

I gave a speech in 2016 when I was chair of the Committee for Montgomery about this kind of thinking as it applies to state and local governments who face similar challenges around how to do more without spending more money*.

In the speech, I tell a story about my father using creative thinking to stop a bully from beating up his younger brother (my Uncle Todd z”l).

Watch the speech to Committee for Montgomery here:

Creative thinking, design thinking, and innovation are what will save healthcare in the future. This type of innovation is currently happening in other places in the world, like in India as well as here in the United States. We are reading now about mergers between retail and insurance companies and new models of patient care with the new JPMorgan-Berkshire Hathaway – Amazon initiative led by Atul Gawande. These new models could be rungs on the ladder to reach the triple aim depending on how they approach their work.

But, we need to do more. As an industry, we are still big and slow. In other industries, like tech, companies have departments reserved for disruption and innovation. These “skunk work” groups gather people from various sectors, industries, occupations, and nationalities to work on the “next thing”. In healthcare, many companies have rested on their laurels and rode out the current system. Those days are no more.

One possible positive example of progress in this area is with Florida Hospital in Orlando, FL. Recently, they shed some light on a secret project they are working on called “Project Fulcrum”. This area of the company is designed to disrupt, which will ultimately help Florida Hospital thrive as the environment changes.

More healthcare systems should be using outside-the-box thinking, in a “formal” department with authority, resources and the ability to test their ideas within their companies and work with partners. Only through this work will the industry deliver on the promise of the triple aim.

KEY TAKEAWAY: To achieve the triple aim, the healthcare industry needs to be deliberate and strategic in investing time and energy around innovation. Simply expecting a company will be able to adopt to a new environment when it arrives is not a viable strategy.

*Innovative approaches to budgeting in state and local governments is not the topic of this post. However, there are some in the public sector that are achieving the aims of better outcomes at lower costs. I was privileged to hear from leaders from the City of Fort Collins, Colorado who won the Malcolm Baldrige National Quality Award. I was thoroughly impressed with their budget process that helps to achieve these goals. I encourage you to read more about it by clicking this link.

How Rituals Keep the Main Thing the Main Thing

I was honored with the opportunity to offer a devotional at Adventist HealthCare’s November 5th Mission in Motion conference for its organizational leaders. Here are my remarks:

Good afternoon, colleagues and friends. My name is Jonathan Sachs and I serve as the Associate Vice President for Patient Experience at Adventist HealthCare.

Thank you for the opportunity to share a word of devotion with you before we bless our food and enjoy a meal together.

I would like you to join me for a moment and give thought to a question that has been on my mind: What are we doing here?

We are all busy, we’re all itching to take peeks at our email, patient care at our entity’s continue on, yet we are here at this conference, away from our teams, and sitting a lot. Why?

I’m here to tell you that I figured it out, and the answer is not that our being here is a mandatory condition of employment.

The answer is far more important and deeper than that.

We are here because we are committed to our mission of extending g-d’s care through the ministry of physical, mental, and spiritual healing.

Moralist David Brooks defines commitment as, “falling in love with something and then building a structure of behavior around it for the moment when love falters”.

What we are doing today is a part of the, “structure of behavior” for how we keep love alive with our patients and with each other. According to Rabbi Jonathan Sacks (no relation), “Rituals are the framework that keeps love alive”.

I am Jewish and Judaism is well-known for its many rituals including keeping the dietary laws of kashrut, not using electricity on the sabbath, and men wearing a skullcap (called a kippah) to remind us that g-d is always with us and above us. We do this because, without it, without this structure of behavior, we would lose our commitment to living in faith and doing good deeds when we need g-d the most.

If you have ever been to a Jewish service, you may see the men wearing a prayer shawl with fringes on it. We call the fringes “tzitzit” [pictured] and the reason for their being comes from Numbers 37 in the Torah, which says, “The Lord spoke to Moses, saying: Speak to the children of Israel and tell them to make for themselves fringes on the corners of their garments through the generations…and you shall look upon them and remember all the commandments of the Lord and fulfill them, and you will not follow after your heart and after your eyes by which you go astray – so that you may remember and fulfill all My commandments and be holy to your g-d.”


Photo Courtesy:

We wear the tzitzit because g-d acknowledges our humanity. G-d wants us to “keep the main thing [of doing the good deeds he commands us], the main thing” but knows that we are human and so we are likely to forget or lose track of the main thing in the midst of our busy-ness. For that reason, G-d himself commands Moses to build rituals for us that remind us to stay on track. As leaders, it is up to us to do the same for our team members.

Our teams can lose their way because the world keeps us busy and what we need to do to survive on a daily basis is hard, consuming, and urgent. But often the most important things are those that are non-urgent: Did I say, “I love you” to my spouse and children today? Did I thank a team member for extending g-d’s care in a new way? Did I keep the main thing, the main thing?

Organizational rituals, like today’s conference, like “our main thing”, and like our leadership system are tools for us to use as leaders to keep our commitment to our patients and to build structures of behavior to make sure we never forget what is most important and why we are here.

I always circle the Mission in Motion conference on my calendar because it is a ritual where I get to learn from our speakers and reconnect with you. It renews my commitment to the spirit of our mission and I always look forward to it.

As we go about today, I hope you will join me in thinking of new ways to build rituals in to our daily work so that we stay connected to what is most important more often than just twice a year at this conference. Think about sharing stories or asking questions of your team to keep why we are here at the tops of their minds. By doing so, we will lead team members with purpose, not just with urgency.

Invent new rituals to keep the commitment to our mission alive. Our team and our patients are counting on us.

Let us pray:

Blessed are you lord g-d, king of the universe, for bringing us to this mission in motion conference. Let today be a ritual that creates daily rituals throughout our healthcare system that allow us as human beings to never forget how to achieve our mission of extending your care.

G-d, Please bless our patients as they heal and bless our caregivers as their healers. We are here to support their work, give them guidance, and to nourish their commitment by helping them see the big picture.

As we continue to lunch today, please bless our food.

Baruch atah adonai eloheinu melech ha’olam, she-hakol ni-hyea bidvaro

Blessed are you, lord our g-d, King of the Universe, by whose word all things came to be. And let us say, Amen.