Research suggests that better-informed patients can lead to reduced hospitalizations and medical costs.1

Investigators studied five years of clinical and economic outcomes data for 1,800 patients insured through their employers. They found that when the employees participated in a web-based health literacy program, hospitalizations dropped by 32%, emergency department (ED) visits were down 14%, and overall costs declined 11%, says Jeffrey C. Greene, chief executive officer and founder of MedEncentive in Oklahoma City.

Inadequate health literacy can lead to more than higher hospitalization rates and ED use; it also is associated with higher mortality rates. “The vast majority of us don’t have proficient health literacy, and that affects a whole slew of things,” Greene says. “It’s the single strongest determinant of a person’s health status and life expectancy.”

It is important for patients to understand what their doctors are telling them about their conditions, ask the right questions, and know how to follow the doctor’s instructions to best manage their health. Understanding medication dosages, or how to take prescriptions — for example, with or without food, or the time of day to take it — can affect outcomes, Greene says.

“It’s knowledge empowerment,” Greene says. “When people know how [to manage their health] and why, they become more empowered, and that leads to motivation and to adherence.”

But how does one improve health literacy? Participants in the MedEncentive study used the company’s Mutual Accountability and Information Therapy (MAIT) Program.

“What we invented is a web-based system that allows the doctor to enter a diagnosis, then present to the patient a list of articles on that diagnosis — whether it’s hypertension, diabetes, or an upper respiratory infection — at a fifth-grade level, so people can understand,” Greene explains.

Then, the patient is asked to perform several tasks, beginning with reading the article and taking a test to see what they understood. They can take the test repeatedly until they understand, he adds.

“It’s different than when the doctor tells you something,” Greene notes. “It’s done in the privacy of the person’s home and without distractions.”

The program also asks patients if they will comply with what they just read. If not, patients can indicate reasons. For example, maybe they cannot afford the medicine, do not think it will be effective, or they think the doctor gave the wrong diagnosis, he says. Patients are then asked if their doctor can see their score.

Finally, patients are asked to rate the doctor’s performance, based on what they learned. The insurer financially rewards the doctor and patient to encourage participation. The doctor earns about $15, or about a 20% bump in the average compensation for an office visit. The patient receives $15 in the form of a refund from their out-of-pocket expenses.

“We’ve taken the approach it’s about providing the right information at the right time in the right way so a person can make an informed decision and be more inclined to adhere to that knowledge,” Greene says. “The doctor wins, the patient wins, and the insurer wins.”

Typically, no one asks patients to leave the exam room and demonstrate they retained what the doctor told them, Greene notes. “Our system fills that gap.”

Accountable Care

Healthy literacy is a large part of Prisma Health’s Accountable Communities initiative, which largely deals with the uninsured population, says Jennifer Snow, executive director of the Prisma Health Accountable Communities in Greenville, SC.

The health system has been improving patient understanding of health, insurance, and accessing care at the right location. While it is not a web-based program, the concept is similar, she says.

“The healthcare system is complex and can be overwhelming for the patients we serve,” Snow explains. “A lot of what our team does is teaching patients how you access health and why health is important.” For example, patients with diabetes learn about diet, exercise, and the importance of taking their medication.

While the program administrators have been working with adults, they also have begun to work with pediatric asthma patients. It has led to better adherence to medication protocols and fewer ED visits, Snow says.

“So many of our programs focus on support and education,” she adds. “There’s a lot of engagement at a patient level, and also with families and caregivers.” It also has paid off in better health and lower costs.

One program uses paramedics to visit patients at their homes to provide education and support. It decreased ED visits by 8.49% and total costs by $18,892 between February 2015 and July 2020. A community health worker program reduced ED visits by 13% and total costs by $108,406 during that time, Snow adds.

“We’re going about it in the right way that makes sense to the patient or the caregiver,” Snow says.

VA Study Demonstrates Effectiveness

The correlation between health literacy and hospital use has been documented previously, notably in a Veterans Affairs study.2

“Researchers in that study concluded those without health literacy consumed twice as much [healthcare services] as those with adequate health literacy,” Greene says.

Researchers studied 92,749 veterans from 2007 to 2009 and concluded the average per-patient cost for those with inadequate and marginal health literacy was significantly higher than those with adequate health literacy. They estimated the three-year cost was $143 million more for those without adequate health literacy.2

The MedEncentive study authors concluded participants found the program valuable, leaving them better able to manage their own health, but further research is needed to confirm the outcomes.1

The program has been tested for a decade and puts the patient’s level of understanding on par with the doctor, which makes for better communication, Greene says.

“It gives patients the tools to be effective in self-managing their health,” he explains. “If you give people the knowledge they need at the right time, in the right way, it can affect dramatic reductions in hospital and ED costs.”


  1. Greene JC, Haun JN, French DD, et al. Reduced hospitalizations, emergency room visits, and costs associated with a web-based health literacy, aligned-incentive intervention: Mixed methods study. J Med Internet Res 2019;21:e14772.
  2. Haun JN, Patel NR, French DD, et al. Association between health literacy and medical care costs in an integrated healthcare system: A regional population-based study. BMC Health Serv Res 2015;15:249.