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.