Healthcare system complexity is not news to anyone. Yet the impact in hard dollars on payers is news. Not only are people frustrated, but money is being wasted. In fact, more than half of US consumers do not understand how to navigate the current healthcare landscape because it is so complex, reveals Accenture research. This low healthcare system literacy is creating an estimated $4.8 billion annual administrative cost burden for payers.

RELATED: U.S. Health plans can save billions by helping patients navigate the system

Instead of forcing people to continue to battle complexity, payers can invest in simplifying the ways consumers interact and engage with healthcare. Because it’s not Americans who are failing in healthcare system literacy. It’s the complexity of the system that’s failing them.

Literacy is not a given

Accenture developed a Healthcare System Literacy Index to understand the healthcare competency levels of US consumers. This analysis reveals that 52 percent of them have low healthcare system literacy—including 33 percent with no experience and 19 percent who are novices. Of the 48 percent of Americans who have high healthcare system literacy, only 16 percent qualify as experts. See Figure 1.


Of US healthcare consumers have no experience with healthcare systems


Of US healthcare consumers are novices

People with low healthcare system literacy struggle to make informed decisions about everything from the health plan types they choose to the premiums they pay. A big surprise is that many consumers with low healthcare system literacy are well educated. Forty-eight percent of low healthcare system literacy consumers completed college or hold a graduate degree. And 97 percent of them have at least a high school diploma.

$5 billion is at stake

Consumers with low healthcare system literacy have a higher than average need for customer service assistance. See Figure 2.

Accenture analysis reveals that they contact customer service 13 percent more often than high literacy consumers do.

Confused healthcare consumer asks questions–What does my doctor bill mean? What coverage is best for me? How much will my insurance cost? Is the service covered? Should I go to the doctor? Should I go where my doctor sends me?

Consumers with low healthcare system literacy may struggle to make key decisions

These interactions create a big administrative cost burden for payers. On average, health insurers and employers spend $26 more on administration for every consumer with low healthcare system literacy. That translates to $4.8 billion annually in administrative cost across the United States. Compare this to the $1.4 billion each year in administrative costs for consumers with high healthcare system literacy. This cost gap signals that health payers could save $3.4 billion a year in administrative costs if all consumers had high healthcare system literacy. See Figure 3.

There’s a human cost to healthcare system complexity too. It is especially detrimental to the 26 percent of US consumers who have both low healthcare system literacy and a high need for intervention. These are people who are more likely to have serious health conditions, including high-cost and pervasive conditions such as cancer, congestive heart failure or renal failure among others. They also have a higher need for weekly and monthly interactions with customer service.

Curing complexity?

While there’s no eliminating systemic complexity in the short-term, the industry can create a new model of consumer service and engagement that makes navigating the healthcare system feel easier for people. Here’s how to get started:

Shift the burden off consumers.

Orchestrate service options and experiences across physical, digital and emerging channels to reach low literacy consumers on their terms.

Abandon spray-and-pray tactics.

Use data insight from advanced analytics and artificial intelligence to deliver easy-to-follow programs and relevant products.

Look beyond the four walls.

Incentivize healthcare providers to help consumers understand and navigate their health insurance options and questions.

Integrate the use of lay navigators.

Engage community members who are trained to help people manage non-clinical challenges—financial, logistical, emotional, cultural and communications.

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Payers can direct the cost savings from these initiatives to new product concepts that actually make the system simpler. With iterative, test-learn-tweak development, health payers can experiment and scale the best concepts faster. This creates momentum for a targeted approach to cut through complexity—and make low healthcare system literacy yesterday’s news.

Jean-Pierre Stephan

Managing Director – Payer Front Office Lead

Loren McCaghy

Director – Consumer Engagement and Product Insight​​

Michael Brombach

Senior Manager – Strategy


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