The impact of low health literacy on the medical costs of Medicare managed care enrollees

Abstract Purpose To examine the impact of low health literacy on medical care use and costs. Methods The study sample consisted of 3260 noninstitutionalized elderly persons enrolling in a Medicare managed care plan in 1997 in Cleveland, Ohio; Houston, Texas; South Florida; and Tampa, Florida. Health literacy—the degree to which individuals have the capacity to obtain, process, and understand basic health information and services needed to make appropriate health decisions—was measured using the Short Test of Functional Health Literacy in Adults. We used a 2-part regression model to examine the association between health literacy and medical costs, adjusting for age, sex, race/ethnicity, education, income, alcohol and tobacco consumption, and comorbid conditions. Results are presented as mean differences (with 95% confidence intervals [CI]) between the inadequate and adequate groups and, separately, the marginal and adequate groups. Results When compared to those with adequate health literacy, emergency room costs were significantly higher ($108; 95% CI: $62 to $154; P<0.0001) among those with inadequate health literacy, while differences in total ($1551; 95% CI: −$166 to $3267; P = 0.08) and inpatient ($1543; 95% CI: −$89 to $3175; P = 0.06) costs were marginally significant. Total costs were higher in the marginal health literacy group, but the difference was not significant ($596; 95% CI: −$1437 to $2630; P = 0.57). Conclusions Persons with inadequate health literacy incur higher medical costs and use an inefficient mix of services.