Informing decisions: to help employees cope with the complexities in making medical choices, employers are offering health education

HR Magazine, June, 2005 by Carolyn Hirschman

It's now a core tenet of employer-sponsored health care: The more employees know about their health options and their own health status, the better off everyone is.

With good health education resources, experts say, employees can make more-informed decisions about medical matters, be more judicious in their health spending habits, and get problems diagnosed and under treatment before they mushroom into costly major illnesses. In turn, as employees become smarter health consumers, employers will be able to tighten their rein on premium increases and productivity losses.

Although employee-centered health education could be a plus for employers no matter what types of health plans they offer, it may be especially important, experts say, for employers offering consumer-directed plans. Those are the high-deductible plans that require employees to decide how to spend health care dollars that are, in effect, theirs. As employees take on more responsibility for health decisions, they should have access to resources to make the best possible decisions, experts explain.

In fact, many employers with consumer-directed plans already provide such resources, typically through health plan providers or other third parties. But even some companies without such plans are offering health education--not only to make employees more careful in their health spending habits now but also to prepare them for possible consumer-directed options in the future.

Another, perhaps more speculative, reason for employers to provide such education, however, is to shield themselves from potential complaints--and even litigation--centered on whether employees' health problems stemmed from a lack of proper health decision tools.

Although no such suits are believed to have materialized, they are "theoretically possible," says Helen Darling, president of the National Business Group on Health in Washington, D.C.

Timothy J. Stanton, a benefits attorney with Gardner, Carton & Douglas LLP in Chicago, says that although he has not seen any such lawsuits, "I could imagine cases where a participant who made ill-advised ... decisions in a [consumer-directed] plan could sue a plan sponsor, alleging a breach of an ERISA fiduciary duty for failing to educate participants." (ERISA is the Employee Retirement Income Security Act of 1974, which governs private health and welfare plans.)

"As fiduciaries," Stanton continues, "employers should never put employees into plans the employees don't understand and won't be able to navigate successfully." And because employees stand a greater chance of making mistakes in deciding about their health care under consumer-directed plans than under conventional plans, he adds, "I think education will be very important with the new consumer-directed programs."

Schooling Needed

Although health care consumerism is still in its early stages, HR has been engaged from the start. HR professionals at many companies have been implementing health education and communication strategies--many of them online--for some time, and such efforts are spreading. (For more information, see "Health Education Turns Proactive" in the April 2005 issue of HR Magazine.)

But newer, better efforts may be needed because there is evidence that many employees lack the skills necessary to use the health information already available to them--which can be costly for employers.

According to a report issued last year by the Institute of Medicine, a private science advisory organization in Washington. D.C., nearly half of U.S. adults suffer from "health illiteracy" and cannot adequately use the mass of data already available to them.

About 90 million people have trouble obtaining, understanding and using information to make decisions about their health, which results in billions of dollars in avoidable medical costs, according to the institute's report, Health Literacy: A Prescription to End Confusion. The report explains that those individuals who know little about health matters get less preventive care and use more emergency services than those who are health literate.

Health illiteracy crops up in many ways, from misreading drug dosage information to misunderstanding patient consent forms. Moreover, it spans the educational spectrum--from Ph.D.s to those with poor reading and writing skills to those for whom English is not their native language--according to William Smith, who served on the committee that wrote the report.

Smith, executive vice president of the Academy for Educational Development, a Washington, D.C.-based organization focused on the least-advantaged people in the United States and in developing countries, adds: "If you employ a significant number of employees, some of those with health illiteracy are working for you and costing you money. They're using more health care than they should."

Employers can do their part to make employees better informed about health matters, Smith says, by testing the read-ability of their benefits materials, making sure employees understand the health information they receive and guiding them to objective sources of information.