The High Costs of Health Illiteracy

    According to JAMA, only 12% of employees are health literate; and without the appropriate education, tend to spend 80% more than their counterparts.

    Employers may think they’re doing a great job when open enrollment comes around and staff meetings go off without a hitch. You have good participation and even a few questions…but how much do your employees understand their health plan and how to best utilize it?

    ...HSA vs FSA

    ...Copay vs Coinsurance vs Deductible

    ...PPO vs HDHP

    It’s not uncommon for employees to elect a plan or tier without fully understanding what it is or even if it’s the right option for them. It’s just as likely that employees will risk having the basic knowledge of terminology to avoid the humiliation of asking what they deem to be a “silly question.”

    The Costs to You and Your Employees

    The costs to both your company – and your employees – can be staggering. According to JAMA, only 12% of employees are health literate; and without the appropriate education, tend to spend 80% more than their counterparts. Many employees turn to online or family resources for information, which may or not be helpful. This translates to billions of dollars lost to employers and the healthcare system overall – costs that could have major impacts to the future viability of our healthcare availability and choices.

    According to the Kaiser Family Foundation, patients in the U.S. spend more on healthcare than any other country in the world. Part of the reason is the healthcare system itself – any major diagnosis requires coordination of appointments, testing, and treatment. An employee can get lost in the shuffle – and costs can go up.

    But first…education.

    With the right education, employees can improve their overall health and wellness while saving money through:

    • Understanding plan structure and the difference between copays, deductibles, and coinsurance.
    • Leveraging preventative screenings including diabetes, high blood pressure, and cholesterol.
    • Learning how lifestyle changes such as nutrition, nicotine/alcohol use, and mindfulness can improve overall health.
    • Understanding the long-term health impacts of utilizing specific medications.
    • Utilizing mental health practices and tools to decrease stress, anxiety, and improve related disorders.
    • Financial literacy to avoid/mitigate surprise medical bills or how to shop for quality healthcare.
    • Utilizing other healthcare options such as voluntary benefits.

    Other Cost Saving Resources

    You’ve got a business to run and other pressing issues to solve every day. How can you improve education without draining your resources? There are a LOT of solutions you can use!

    • Work with your benefits broker to navigate resources and select what options work best for you.
    • Using a third-party vendor can help generate mini quizzes, videos, and helpful tips throughout the course of a plan year so information stays fresh in employees’ minds.
    • Consider implementing small financial incentives with quizzes to increase participation.
    • Start a private social media group that allows employees to knowledge share (keeping HIPAA practices in mind).
    • Third party vendors can also help an employer offer coordination of a tough diagnosis for an employee – helping them navigate options and solutions, to help keep costs in check.


    Health literacy isn’t just a cost savings mechanism. It can be a recruitment and retention superstar. Employees who understand their health benefits are more likely to both save money and report higher job satisfaction, decreased stress, and improved productivity. Talk about reciprocity!

    Thankfully, there are tons of tools out there that empower employees to take care of their health. Keystone’s benefits team can help you navigate these options, from enrollment to ongoing education, that increase awareness – and wellness of your employees – while saving costs.