More than half of consumers don't understand basic aspects of the healthcare system, survey finds

A new analysis from Accenture added to the list of reasons why the healthcare system needs to be simplified. (Getty Images/gustavofrazao)

Improving consumers’ healthcare literacy could save the U.S. healthcare system billions of dollars per year, according to a new analysis from Accenture.

In an online survey of healthcare consumers, Accenture found that 52% are “healthcare illiterate.” This means they don’t understand coverage terms like “premium,” “deductible,” and “copayment." They also don't understand what it means to be in- or out-of-network or what a prior authorization is.

Compared to consumers with a higher level of healthcare literacy, this group is seven times more likely to contact their insurance company’s customer service line one to three times per week, and three times more likely to use it one to three times per month.

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Contrary to what one might think, consumers with low healthcare literacy are not uneducated. Nearly all of them have at least a high school diploma, and 48% have a college or graduate degree.  

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“Even people in the industry need help when selecting their products or choosing their benefits,” noted Jean-Pierre Stephan, Accenture’s managing director of health engagement.

Insurers and employers spend $1.4 billion on high-literacy consumers and $4.81 billion on low-literacy consumers annually, suggesting they could save $3.4 billion per year if all consumers were healthcare-literate.

The report noted those numbers only reflect administrative costs. The impact would be higher if the analysis included medical costs—especially since 26% of respondents had both low levels of healthcare literacy and complex health needs.

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“Their struggle to make informed decisions impacts their ability to get the medical care they need,” the report reads.

Payers can work with physicians, employers, and navigators to provide consumers with clear, accessible information about coverage options, the report says. They could also proactively educate consumers through a variety of physical and digital channels, from mail to text message to app.  

“We’re trying to change consumer behavior as an industry to help the consumer make good choices as they’re navigating the system, helping them achieve the best outcomes at the best cost,” Stephan said.

But none of those options get to the root of the problem, which is that the system is inherently complicated.

Stephan pointed to Bind, a startup that offers coverage “exactly when people need it.” Bind does away with deductibles and coinsurance, requiring patients to pay only premiums and copays.

As they gain traction with consumers and employer groups, companies like this pose “a threat to insurers,” Stephan said.