Low Health Literacy Skills Increase Annual Health
Care Expenditures by $73 Billion
Low Health Literacy Skills Contribute To Higher
Utilization of Health Care Services
Health literacy refers to the set of skills needed
to read, understand, and act on basic health care information. Over
90 million adults with low health literacy skills (see box below)
have limited ability to read and understand the instructions contained
on prescriptions or medicine bottles, appointment slips, informed
consent documents, insurance forms, and health educational materials.
Poor health literacy skills have profound economic consequences.
Using data from a nationally representative sample
of the U.S. adult population age 16 and older, the National Academy
on an Aging Society examined the impact of literacy on the use of
health care services. The study found that people with low health
literacy skills use more health care services.
- Among adults who stayed overnight in a hospital
in 1994, those with low health literacy skills averaged 6 percent
more hospital visits, and stayed in the hospital nearly 2 days
longer than adults with higher health literacy skills.
- Among adults with at least one doctor visit in
1994, those with low health literacy skills had on average one
more doctor visit than adults with higher health literacy skills.
- When self-reported health status is taken into
account, patients with low health literacy skills had fewer doctor
visits but used substantially more hospital resources.
Overall, the study found that the primary source
of higher health care expenditures for persons with low health literacy
skills is longer hospital stays. Other factors, such as the
ineffective use of prescriptions or misunderstandings about treatment
plans may also have financial consequences.
- The estimated additional health care expenditures
due to low health literacy skills are about $73 billion in 1998
health care dollars. This includes an estimated $30 billion for
the population that is functionally illiterate plus $43 billion
for the population that is marginally literate.
- This amount is about what Medicare is expected
to pay to finance physician services, dental services, home health
care, prescription drugs, and nursing home care combined.
While a significant share of the health care
costs fall on the patients with low health literacy skills, health
care providers and those that finance those providers share the
- Medicare pays 39 percent of the expenditures.
Most of the additional expenditure is financed through FICA taxes
- Employers may be financing as much as 17 percent
of the additional health care expenditures due to low health literacy
- Out-of-pocket expenditures by patients total
more than $11 billion dollars or 16 percent of the additional
health care expenditures.
- Medicaid pays more than $10 billion dollars,
or 14 percent of the additional health care expenditures.
No study has directly measured the health
literacy of the U.S. population. However, it is possible
to estimate the number of people who have low health
literacy skills using results from the 1992 National
Adult Literacy Survey (NALS). The survey reported that
some 40 to 44 million of the 191 million adults in the
country are functionally illiterate. They read at or
below a fifth-grade level, or cannot read at all. Another
50 million are marginally illiterate. They are generally
able to locate and assimilate information in a simple
text, but are unable to perform tasks that require them
to assimilate or synthesize information from complex
and lengthy texts.(1) Because of the literacy demands
upon patients in the increasingly complex health care
system, adults who are functionally illiterate or marginally
literate are likely to have low health literacy skills.
Health care use, status, and insurance coverage data
are derived from the 1993 Survey of Income and Program
1.Source: Kirsch IS, Jungebut A. Jenkins, L. Kolstad,
A. Adult Literacy in America: A First Look at the Results
of the National Adult Literacy Survey. Washington, DC:
Department of Education 1993.
Funding for this research on health care cost implications of
low functional literacy was provided by Pfizer Inc. to the National
Academy on an Aging Society. For further information contact National
Academy on an Aging Society at (202) 842-1275.
Production of this Fact Sheet was jointly underwritten by The
Center for Health Care Strategies and National Academy on an Aging