Financial Literacy From A Healthcare Point-of-View (Part 3)
Consumerism / By Lance De Peralta / October 27, 2021
"Each One, Teach One."
Better Late Than Never
Let me preface this article by saying it's long overdue.
Let's just say Life took me on a momentary, but necessary detour. My pen, paper, and thoughts put aside, I proceeded on this unexpected journey. Eventually, I would forget about the article…that is, until recently.
If you've been waiting for this article - I apologize. Thank you for your patience and I hope you enjoy it.
If you're new - WELCOME! This article is the final installment of a 3-part series that I originally started on LinkedIn. I've since republished Part 1 and Part 2 on our blog in the event any of my readers don't use LinkedIn.
Whether you're a new or past visitor, either way, allow me to catch you up first before diving into Part 3.
I started down the path towards writing about health literacy near the end of 2020. By that time, the U.S. healthcare industry had been deeply affected by COVID. But from a patient / healthcare consumer perspective, it was about to undergo significant regulatory changes, beginning with the introduction of the Hospital Price Transparency Rule (the "Rule"), which went into effect January 1, 2021.
Before turning the page on 2020, I wanted to familiarize myself with the Rule, along with its counterpart, the Transparency in Coverage Rule, which is supposed to go into effect next year and applies to health insurers (i.e., payers). During this process, I was astonished to learn how bad the health literacy rate is in the United States. This revelation planted the seed to write about it.
But the writing didn't happen overnight.
It took a Milliman white paper and, soon after, a brilliant and articulate high school student, to propel me to act.
The common thread?
In that moment, I decided to write about financial literacy but add a healthcare spin to it.
Part 1 was published in April.
In a way, it's a dedication to Harsimran, the young lady whose moving TEDx talk inspired me to action. As I said then, I encourage my readers (especially those with children) to listen to her 11-minute presentation and share & discuss it with others.
April happens to be Financial Literacy Month (FLM).
Peering into my early adult life, I talked about my relationship with money & finance, revealed how I stumbled into healthcare, and explained how these two seemingly unrelated events were, in fact, connected.
"Health literacy…is really another form of financial literacy…" I wrote.
A month later, I expanded upon this statement.
The "Main Course"
In Part 2, I introduced Jim and Barbara Moss, a married couple in their late 40's with 3 children. I used them as a shining example for why health literacy deserves a seat at the finance table. It deserves to be there by virtue of the complexity and exorbitant cost of the American healthcare system.
Now that we're all caught up…who's ready for dessert?
"Dessert" Is Served!
This month (October) is Health Literacy Month (HLM). It's also that time of year where many Americans (maybe you included) are gearing up for Open Enrollment.
The timing of this article is not lost on me. Matter of fact, I reference HLM in Part 2 to bolster my point that low health literacy has serious financial implications. Also, its publication is coming on the heels of medASTUTE's Open Enrollment blog series which I encourage you to read.
I ended Part 2 by proclaiming that financial literacy and health literacy are more similar than you realize. So, it seems only fitting that I pick up where I left off before HLM ends.
The Milliman paper that I spoke of earlier had some interesting points about the state of financial literacy in America. What resonated with me, in particular, is how the authors weave their own experiences - and the experiences of other people in their lives - into the broader narrative. After reading the piece, I couldn't help but draw comparisons to the "health" of our nation's health literacy. Here's what I've observed and learned:
- Knowledge is NOT power!
- Crawl before you walk
- The power of language
- Wellness is a two-sided coin
- "Each one, teach one"
Knowledge Is NOT Power!
What is financial literacy?
According to the National Financial Educators Council (NFEC), whom the authors cite, financial literacy is "possessing the skills and knowledge on financial matters to confidently take effective action that best fulfills an individual's personal, family and global community goals."
What is health literacy?
The Affordable Care Act (aka Obamacare) defines health literacy as "the degree to which an individual has the capacity to obtain, communicate, process, and understand basic health information and services to make appropriate health decisions.”
What do these definitions have in common?
Knowledge AND Action!
We've heard these sayings before:
"Knowledge is power."
"Actions speak louder than words!"
Business and life strategist Tony Robbins, someone who I follow and admire, combines them when he says:
"Knowledge is NOT power.
Knowledge is POTENTIAL power.
Execution TRUMPS knowledge!"
Information regarding your finances and healthcare is meaningless unless you act on it.
Barbara and Jim Moss decided to address their family's healthcare needs & expenses, educated themselves, and ACTED! They called this "self-managed care."
Or you may know it as "healthcare consumerism."
Crawl Before You Walk
Understanding basic concepts is another trait shared between health literacy and financial literacy. Unfortunately, many people in this country are ill-equipped to crawl.
The Milliman publication cited a study from the Financial Industry Regulatory Authority (FINRA) which found that just over one-third of respondents "could answer at least four of five basic financial literacy questions…."
Meanwhile, more than one-third of American adults have low health literacy. You can thank our complex healthcare system for that abysmal statistic. Navigating the U.S. healthcare system requires certain literacy skills - math being one of them.
Consider this: 157 million people - nearly half the U.S. population - are covered by employer-sponsored health insurance. If you have health insurance and are (as of this writing) in the process of selecting coverage for next year, you know that it comes with out-of-pocket (OOP) expenses. Those OOP costs come in a variety of flavors depending on the insurance policy's level of coverage. Yet, most Americans can’t correctly define basic health insurance terms like a deductible and coinsurance – the very costs they’re responsible for paying! As a result, many people don't know what they paid or why they paid it. Even worse still, some of them may get hit with "surprise" medical bills so outrageous - sometimes several thousands of dollars - they may be on the hook for the full amounts.
Are you beginning to see why math is an essential healthcare skill, let alone an important financial skill?
The Power Of Language
When you boil it down, math is a literacy skill that deals in precision and absolutes.
- 2 + 2 = 4
- A solar year is defined as the amount of time (365.25 days) it takes the Earth to orbit the Sun (which is why we have a leap year every 4 years).
- Your gross income is $50,000 a year.
- Your Visa card has a $10,000 credit limit with an APR of 14.99%.
- Your HMO plan includes free preventive services.
- You pay a $5 copay each time you fill a prescription at the local pharmacy.
I could go on.
It certainly bears repeating - math is a valuable skill. HOWEVER, it’s not the be-all and end-all.
We don’t live our lives like an algebraic equation. Life is a complicated and nuanced tapestry with many grey areas in between.
So too is finance and healthcare.
That said, a different set of literacy skills are required to navigate them. These skills include listening, speaking, reading, and writing. They represent the four basic “language skills” for effective communication.
Healthcare and finance each have their own language system as evidenced above:
- Finance: Gross income, credit limit, APR
- Healthcare: HMO, preventive services, prescription
The aim is to learn their respective language enough to understand others and be understood by others.
Furthermore, finance and healthcare need to be approached and maneuvered with caution due to their sensitive nature. In that regard, what is communicated is only as good as how it’s communicated.
For a lot of people, money evokes certain emotions. The very thought of revealing to someone how much they make, for example, can be cringeworthy. Good or bad, it invites a level of scrutiny. As a result, a person will, instinctively, avoid revealing his / her financial situation. The Milliman authors use the phrase "money taboo" to describe this deflective behavior. It's a type of defense mechanism that, while beneficial at times, can affect a person's ability to make prudent financial decisions. Addressing this issue requires approaching the subject of personal finance with someone almost with a therapist's touch.
"Like a financial therapist?" you may be asking yourself.
Financial therapists do, in fact, exist. "Financial therapy" emerged as a specialty, according to the authors, just over a decade ago with the formation of the Financial Therapy Association (FTA). This practice "combines financial planning services and mental health treatment." What the authors didn't mention, but is particularly noteworthy and perhaps a motivating factor, is that this occurred during one of the worst periods in American history - the Great Recession.
And interestingly, the FTA only began offering financial therapy certification in 2019, the authors noted. This was, of course, before COVID entered our lives and became a part of our general lexicon.
The Silent Killer
Eventually, the coronavirus would put health & wellness front and center. And perhaps nowhere has the spotlight shine so bright than on mental health. "It seems that much of what we have learned from past disasters and epidemics is holding true in the context of the COVID-19 pandemic," writes Joshua A Gordon, M.D., Ph.D., Director of the National Institute of Mental Health (NIMH). He was specifically referring to the large spike in reported mental illness cases during the height of the pandemic. One CDC study that Dr. Gordon cited, in particular, showed that the mental illness rates for conditions like anxiety, substance abuse, and stress were twice the expected rates, pre-COVID.
Mental illness - like a person's finances - has a certain stigma attached to it. Known as the "silent killer," a loved one, close friend, or someone physically next to you could be suffering some form of mental illness and you wouldn't even know it. This means the estimated number of people with mental illness is, in all likelihood, woefully underreported. In addition, the stigma can vary across race and ethnicity. This very fact reminded me of the time back in May when I posted about Mental Health Awareness (MHA) Month on LinkedIn. It came on the heels of another LinkedIn post that I wrote commemorating Asian American Pacific Islander (AAPI) Heritage Month which also falls on May.
"After reading Michael Fenlon's post," I said, "I would be remiss if I didn't acknowledge #MentalHealthAwarenessMonth." Mr. Fenlon is PwC's Chief People Officer who referenced a study from the American Psychological Association (APA) which found that Asian-Americans have high rates of mental illness but are "three times less likely to seek mental health services than Whites." Stigma plays a significant role, according to the study, along with the lack of awareness of available resources and services.
Proper communication, in this instance, can help to create an environment that welcomes individuals to share their experiences with mental illness - and learn from others - without judgment.
Wellness Is A Two-Sided Coin
"One-third" seems to be a recurring statistical theme.
The Milliman paper cited a May 2020 PwC Employee Financial Wellness Survey which found that "more than one-third of full-time employed Millennials, Gen Xers, and Baby Boomers, have less than $1,000 saved to deal with unexpected expenses."
Meanwhile, a December 2020 survey conducted by AccessOne, a patient financing solutions provider, reported that two-thirds of Americans were worried they couldn't afford healthcare in 2021. That just leaves (you guessed it!) one-third of Americans expressing no concerns. What's more alarming is that nearly half of the survey respondents (49%) weren't confident they had enough money in the bank to cover less than $1,000 in unexpected medical bills.
These studies reveal a stark reality in this country.
With only less than a grand in the bank, many average Americans and their families are faced with the difficult dilemma of having to put food on the table and keeping a roof over their heads versus having to deal with a catastrophic medical emergency or caring for a gravely ill loved one.
It doesn't need to continue to be this way.
Future generations, like Harsimran, shouldn't be forced to succumb to this vicious cycle upon entering the "real-world."
"The good news," say the authors, is that "employers are well-positioned to reverse some of the trends in financial stress and help employees improve their financial wellness."
"By incorporating financial literacy into the workplace, employers and employees reap many benefits, including increased productivity and retention as well as reduced healthcare costs (i.e., lower stress means fewer adverse effects)."
The last point (reduced healthcare costs) got my attention.
In my 20+ years in the healthcare industry, a good portion of it spent analyzing health insurance claims data, I know that health illiteracy leads to poorer health (e.g., chronic disease, physical & emotional stress), increased healthcare costs and, in several cases, mountains of medical debt.
Now pause and think about something for a moment:
- Low financial literacy has an adverse effect on a person's financial well-being which, in turn, can affect his / her mental and physical health.
- Low health literacy has an adverse effect on a person's mental and physical health which, in turn, can affect his / her financial well-being.
Financial and health literacy are really two sides of the same coin: your well-being.
"Each One, Teach One"
The availability of financial literacy programs isn't limited to employers. The Milliman authors are clear to point that out. Whether you're unemployed, in-between jobs, in school, or a stay-at-home parent, options abound.
- Financial institutions you do business with, like a bank or credit union, offer financial tools and resources - they would be stupid not to.
- You can go the academic route, like I did in my early 20's, and take a financial literacy course at your local college or university.
- There are online "self-study" resources if you're someone who prefers learning at your own pace.
- The mission of non-profit organizations like Jump$tart Coalition (which originally promoted FLM) is to improve financial literacy in this country by making education programs widely accessible.
Despite the low financial literacy rate in the United States, the kinds of resources available to people far exceed anything my industry is doing to combat health illiteracy.
Don't get me wrong.
Thanks to a dedicated group of individuals and organizations - including those not affiliated with the healthcare industry (which, in my opinion, is a good thing) - standing up to the status quo, progress is getting made. Sometimes it takes a completely different set of eyes to objectively view and point out the inadequacies of something and provide innovative solutions.
They include the likes of Marshall Allen, a Pulitzer-Prize nominated journalist and author of the new book "Never Pay the First Bill: And Other Ways to Fight the Health Care System and Win," which is a must read! I was fortunate enough to receive a signed copy of Mr. Allen's book after attending a webinar where he was a guest. The book was already on my 2021 reading list based on some glowing reviews and I was intent on buying it. So, to hear him speak about the book - including his motivations for writing it and sharing a few nuggets from the book to the audience - AND getting a signed copy was icing on the cake!
Then there's EVERFI, a company that I was introduced to a couple years ago. Their mission (Impact-as-a-Service ™) is to bring about positive and lasting change in the world - one individual, one community at a time - through education. At the time, EVERFI's online curriculums and modules were available in 35,000 U.S. school districts and the company educated over 40 million students around the globe. Those numbers, I'm sure, have risen significantly. EVERFI has been in the financial literacy space for years, but what most impressed me about the company was their willingness to tackle health literacy. This year, the company launched the nation's first health literacy course for high school students.
The health literacy road, however, remains a long and windy one. As of 2021, my industry is being REQUIRED BY LAW to get pricing information into the hands of consumers to help them make informed healthcare decisions.
Can you believe that?!?
While this paradigm-shifting moment in the healthcare industry is welcomed and LOOOOOONG overdue, more needs to be done to improve health literacy in this country. We need others in positions of influence to join the Marshall Allen's, the EVERFI's, and the courageous industry veterans & institutions already taking up this important cause.
"Each one, teach one."
Sheila Jelinek CRPC®, Suzanne Norman CIMA®, and Jeanne Russo wrap up their paper by including this simple, but powerful African-American proverb about the significance of imparting wisdom to others.
I began this article with it and will gladly end with it.
"We are uniquely qualified to fill the knowledge gap and by sharing our knowledge and resources within our communities we can help turn the tide and strengthen our society," the authors conclude.
I share their sentiment.
This article, like others before it, is a small testament to it.