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Reducing Healthcare Costs with Health Literacy

Many fear that better healthcare and lower costs are mutually exclusive.

Reducing Healthcare Costs with Health Literacy

However, when well-informed patients and healthcare practitioners effectively communicate and collaborate on a treatment plan, patients often take a more active role in their care and health outcomes improve. These patients and practitioners are skilled at what is known as health literacy.

Research has demonstrated a higher rate of hospitalization and use of emergency services among patients with limited health literacy skills. Studies also report that those with limited health literacy skills are more likely to have chronic conditions, more difficulty managing those conditions, and are more likely to report poor health.¹ This results in higher healthcare costs.

Several states have implemented innovative programs that financially recognize healthcare facilities that improve the quality of care they provide and also ensure access to quality care for all Medicaid members. One example is New York State’s Delivery System Reform Incentive Payment (DSRIP), which offers payouts based on system transformation, clinical management and—best of all—population health². This waiver rewards hospitals and safety net providers for providing quality care and keeping their patients healthier, which translates into less hospital readmissions and lower costs. Stay tuned, too, because this movement is part of a trend that will likely continue to expand.

I’m thrilled about these changes because it means better care for all patients. Efforts to enhance quality, reduce costs, and decrease disparities cannot succeed without concurrent improvements in health literacy³. So how can hospitals and practice groups integrate health literacy throughout their organization? The most efficient way is through staff training in health literacy and cultural competency.

When clinicians and staff are trained to communicate clearly and provide culturally and linguistically appropriate care to all patients, satisfaction and safety improves, health outcomes improve and costs decline.

The benefits of investing in health literacy and cultural competency training include: more patients taking advantage of preventative health measures, fewer patients with chronic illnesses, better patient management of chronic illness, less hospital visits, lower costs, and an overall patient-centered approach to healthcare. Here’s what you can do to get started on improved health literacy:

  1. Train staff on how to communicate in plain language. We all come from different walks of life and have varying degrees of medical knowledge and experience. Communicating clearly in plain language helps to assure that more patients will understand information about their condition and how to improve it. Planning development sessions for practitioners and staff throughout the year to fine-tune clear communication skills can make a big difference.

  2. Revise written materials for patients to be as clear as possible. Take a look at the brochures and handouts you have in your healthcare facility. Do they use plain language, a user-centered design, and clearly defined medical terminology? If not, take steps to edit them so that they are easy to read, understand and use. Consider engaging someone outside the medical group (or you can even involve a focus group of patients) to critique the material and suggest improvements.

  3. Look into hiring a health literacy expert to partner with your hospital or practice. Health literacy experts are not only familiar with how to train groups on health literacy and cultural awareness, but they are knowledgeable about standards, regulations and reimbursement policies. Consider bringing in an expert to: develop a health literacy and cultural competency strategy; assess your strengths and weaknesses; and implement initiatives that can shift the culture toward becoming a health literate organization with a patient-centered approach to healthcare. The investment upfront will be minimal compared to the cost savings and improved care that will result. I’ve done this type of work for hospitals and group practices and would be happy to help.

It may take some time and organization, but keep in mind that any efforts to improve health literacy and cultural competency will likely lead to improved patient satisfaction, and enhanced health outcomes for your patients and overall lower costs.

1. US Department of Health and Human Services. Quick Guide to Health Literacy Fact Sheet. URL: 2. Department of Health. Delivery System Reform Incentive Payment Program. URL: 3. Nielsen-Bohlman, L., & Institute of Medicine (U.S.). (2004). Health literacy: A prescription to end confusion. Washington, D.C: National Academies Press.

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