Understanding healthcare benefits can be a confusing and frustrating task to the average consumer. But low healthcare literacy can lead to increased healthcare costs for both employers and employees.
According to a new report from DirectPath, which surveyed more than one thousand people with employer-sponsored insurance, 41% of respondents said that they sometimes, rarely or never check whether a medical provider or facility is in-network, and 67% did not know that they could compare treatment or services costs from different providers or pharmacies.
Many employees also do not get their information from their employer or benefit carrier. Forty percent of employees said that they were self-taught on health insurance terms and processes, with 33% receiving information from family, friends, acquaintances or co-workers.
“Employees are crying out for individualized help from their employers or from any benefit expert,” says Kim Buckey, vice president of client services at DirectPath. “If employers could fill that gap by providing access to experts, whether in-house or through a partner, it would do a great deal for improving literacy overall, and improving employee engagement in particular.”
Buckey shared some best practices for how employers can improve low healthcare literacy among their employees and the financial impact of addressing these issues.
How would you describe the issue with low healthcare literacy among employees?
Healthcare and health insurance literacy have been low for decades. Unfortunately, we're not seeing huge amounts of improvements. Over the years, as employee benefits have evolved to meet employee and employer needs, they've become more complicated. We've seen studies over the years where people have said that they prefer to clean their toilets or do their taxes, or do just about anything else other than research their benefits. If it's something that you don't want to deal with, there's no real impetus for you to seek out, or even being aware of, whatever support might be available.
It's understandable that [employees] would turn to family, friends, or co-workers to ask what things mean, what they are doing, or have done in the past [in terms of benefits]. That's all well and good, but the people they're turning to may not know any more than they do on the subject. So they're going to be passing recommendations, information and insight on their own personal experience, which may have nothing to do with [the employee’s] personal experience.
Why is it important that employees check things like whether a medical provider or facility is in-network?
From the employees' perspective, there's a better than average chance that they're going to be wasting money. They're going to perhaps choose a plan that will cost them more, because they don't understand how to evaluate their options. They may not make the best choice when going to the emergency room or their doctor, which means they're going to pay more out of pocket. Employees may choose an out-of-network provider, not realizing how much more it's going to cost them.
From an employer's perspective, studies have shown that employees with low health literacy can cause the plan to cost four times as much. Someone with low health literacy would cost the plan $13,000 compared to $3,000 for someone with higher literacy. For a self-insured plan, that can add up pretty quickly. So there's potentially a huge financial impact for both sides of the equation.
Is the coronavirus pandemic putting new light on healthcare literacy?
There are certainly a lot more questions now about what's covered, what isn't and how things are covered. It's not only understanding in general how your plan works, but now we have the added layer of the government changing the rules on how health plans work. As a consumer of healthcare, understanding your plan and how things are going to be different is really important so you can advocate for yourself when those bills do come through.
Due to the impact of COVID, pretty much everyone has had to delay any elective procedure. One scenario can be that as an individual or a family, you have a number of doctor's visits a year and a number of prescriptions. Come July or August, you're usually pretty far along in meeting your deductible, or you might have even met it already. Yet, if hospitals aren't opening up or elective surgery and routine procedures are delayed until September, for example, you may be meeting your deductible much later in the year than you expect. And then you've got a new deductible starting in January. It’s going to be more important now to understand how that works and shop for healthcare for an elective procedure because you'll have to balance the cost and plan more.
What can employers do to improve healthcare literacy in their workforce?
I don't think we can assume that employees understand these basic terms and concepts. Ideally, you're incorporating that type of information in a year-round communications campaign to familiarize your employees with those terms and concepts, rather than waiting for open enrollment. Providing access to one-on-one support, whether it's as onboarding for a new hire or just during open enrollment, would ideally be year-round. Having access to benefit experts that [employees] can ask not only the general questions, but also things [they may] be embarrassed to ask their HR person about pertaining to the employee’s specific situation can be tremendously helpful.
