Consumer Education Initiatives in Financial and Health Literacy. Lessons Learned Relating to the Target Audiences


Better long-term financial and health outcomes are associated with highly targeted and proactive counseling. Evaluations of financial and health literacy initiatives have shown that developing initiatives aimed at a specific audience  or better yet, an individual  are superior to initiatives aimed at a more general audience. In a literature review conducted by the Federal Reserve Bank of Cleveland, the authors found that highly targeted and proactive programs are more likely than more general ones to be effective in changing peoples financial behavior (Hathaway & Khatiwada, 2008). The authors also indicate the need for more rigorous study of financial education. Programs should target a specific audience, such as homeowners, and a specific area of financial activity, such as choosing among mortgages or mortgage modifications. In addition, the authors suggest that training should occur just before the related financial event, such as applying for a mortgage. This finding may explain other findings suggesting that financial education and counseling provide only modest financial improvements. Perhaps the reason for the modest financial improvements is that the financial education is general and not specific to a particular event, issue, or concern. The Federal Reserve Bank authors found that, in studies on counseling on homeownership and on credit card use, preemptive counseling, before the purchase of a home or a bad credit event, could improve outcomes by decreasing default rates or future loan delinquency, or by improving borrower skills and planning. In contrast, reactive counseling, such as postpurchase or crisis counseling, was not as effective as preemptive counseling at limiting bad credit outcomes or future problem behaviors. Similarly, both research studies by Zhan, Anderson, and Scott (2006 and 2009) suggest that focused information for small, targeted populations is likely to improve financial literacy. In the 2006 study, Zhan et al. reported that low-income participants were not aware of public benefits such as transitional Medicaid, subsidized child care, and the Earned Income Tax Credit (EITC), suggest the need for better dissemination of these important potential benefits when conducting financial education. Zhan et al.s 2009 study found that providing financial education to immigrants who were unfamiliar with banking and/or were skeptical of banks increased understanding about banks; for example, there was a 58% decrease in the number of people who found understanding how to use a bank hard.

Health literacy has a history of targeting small subpopulations and even tailoring information to individuals. Targeting is developing materials for a specific segment of the population, smaller than the general public, but still fairly broad, like minority women or older adults with heart disease. With tailoring, the aim is to develop information or an intervention for an individual on the basis of an assessment (HHS, 2000; Kreuter & Skinner, 2000).

To develop targeted or tailored and culturally appropriate materials that engage the desired audience and to determine the best method for disseminating the information, developers may use a variety of methods, such as focus groups, interviews, and observations. Many tailored initiatives in health literacy focus on a specific issue, such as asthma control, diabetes control, or increasing colorectal screening rates. An example of this is the Chicago Initiative to Raise Asthma Health Equity, developed by Martin et al. (2009), which used four educational activities and six home visits responsive to each participants own particular needs, to improve that individuals asthma self-management. Champion et al. (2006) examined different interventions to increase mammography rates. Examining pamphlets, videos, and an interactive computer-assisted instruction program that was tailored to the individuals own beliefs and readiness for mammography, the authors found that 52% of the interactive computer group either worked toward getting a mammogram or obtained a mammogram, compared with those in the pamphlet or video group. These data indicate that tailored, interactive approaches are more effective in increasing mammography rates among African American women. Similarly, Kagawa-Singer, Tanjasiri, Valdez, Yu, and Foo (2009) found that using a culturally customized intervention with Hmong women in California improved mammography rates by almost 30%. In a randomized study of ethnically and linguistically diverse low-income patients, Percac-Lima et al. (2008) found that a culturally tailored navigator program designed to overcome barriers to colorectal cancer screening could significantly improve patient colonoscopy rates. A trained navigator or community health worker met with patients and provided individually tailored interventions, including patient education, procedure scheduling, translation, explanation of preparation, and help with transportation and insurance coverage, resulting in twice the number of colonoscopy completions and colorectal cancer screenings. Smith and Wolleson (2010) also reported that individualized and tailored counseling to low-income pregnant women resulted in increases in health literacy scores and functional self-care literacy[3] scores. In a study of low-income patients receiving diabetes education while waiting in a doctors office, Drago (2009) reported that 92% of patients demonstrated improvement in health literacy skills due to short (15-minute to one-hour) training sessions. Montz and Seshamani (n.d.) examined data from 10,000 low-income and uninsured or underinsured women who participated in a tailored counseling program to improve their diet and exercise, reduce or stop smoking, and reduce other risks identified by study participants. The authors reported a 5% reduction in 10-year estimated chronic heart disease risk, an 8% reduction in 5-year estimated cardiovascular disease risk, and a 7% decline in smoking since the program began. It is important to consider both the target audience and the timing of delivering an educational message in order to have the greatest impact. If possible, tailoring messages to individuals, to address their specific needs at the time of need, could promote even greater behavior change.

Use of theoretical models on behavioral change have proved useful for developing initiatives. Health literacy has developed theoretical models to help develop interventions. These theoretical models, while untested by themselves, have proved valuable in developing a plan to address a health concern. Champion et al.s intervention to improve mammography rates was informed by the Prochaska and DiClementes (1984) Stages of Change Theory. This theory reasons that people tend to progress through different stages on their way to successful change. There are five stages: (a) precontemplation (not yet seeing that there is a problem behavior that needs to be changed), (b) contemplation (realizing a problem exists but not being ready to make a change), (c) preparation, (d) action (changing behavior), and (e) maintenance. The authors found that there was significantly more forward movement in mammography stage of readiness among participants in the interactive computer group, compared with those in the pamphlet or video group. These data indicate that tailored, interactive approaches are more effective in moving African American women forward in their mammogram stage of readiness. This finding could be modified to apply to financial literacy initiatives.

Similar to the Stages of Change Theory, some of the research in financial literacy has found that educating individuals at the time of their need is more effective than educating individuals after a negative financial event has occurred (Hathaway & Khatiwada, 2008). The objective of the study described in the literature review was to provide the information that individuals needed to know at the time when they needed it. For financial literacy, topics could include retirement planning, home ownership, obtaining a mortgage, or managing debt. The purpose of focusing the topic is to tailor the initiative to an individual at the time that would be most appropriate.

Another commonly used behavioral theory is the Health Belief Model. This theory examines (a) perceived susceptibility of a health condition, (b) perceived severity of a health condition, (c) perceived benefits of changing ones behaviors, (d) cues to action or strategies to facilitate embracing new behaviors, and (e) self-efficacy (Glanz, Rimer, & Lewis, 2002). For example, initiatives could increase perceived susceptibility to and severity of a poor financial outcome, the perceived benefits of changing ones behaviors, strategies to facilitate embracing new behaviors, and self-efficacy. Using the Health Belief Model, focus groups and interviews could examine perceived susceptibility to a specific negative financial outcome (e.g., loss of money from a bank), perceived severity of the negative financial outcome, perceived benefits of changing ones behaviors, and strategies to facilitate positive financial behaviors. This information could be used, for example, to develop an initiative that mitigates negative beliefs about banks, increases positive beliefs about banks, such as financial safety and ease of paying bills, and increases self-efficacy to perform positive financial behaviors.

The Theory of Planned Behavior has been used in both health and financial literacy (Ajzen, I, 1985). In the Theory of Planned Behavior, action is guided by behavioral beliefs (e.g., beliefs about the consequences of a behavior), normative beliefs (expectations about others), and control beliefs (e.g., beliefs about what may facilitate or impede the performance of a behavior). Collins 2010 study used the Theory of Planned Behavior to develop and examine a five-session financial education initiative. Based on the theory, it was expected that, compared with the control group, the housing voucher clients who completed a mandatory financial education program would improve in the following areas: (a) self-assessed knowledge of financial issues; (b) attitudes about saving and budgeting; and (c) objective measures of financial behavior, including credit reports and bank statements. Collins found that the knowledge of current interest rates and what is in a credit report increased by 29% and knowledge of managing money by 44% at follow-up. In a similar manner, at follow-up, the program led to a 25% increase in self-reported spending control, a 44% increase in timely bill payment, and a 35% increase in following a budget.

Self-perceptions are a poor reflection of health and financial literacy. This finding can be particularly important, since program evaluations often rely on self-assessments rather than direct observation of behaviors or records of behaviors. Among consumers who speak Spanish as their primary language, a significant number of patients who report English proficiency in fact have an inadequate level of English health literacy, as measured by the Rapid Estimate of Adult Literacy in Medicine (REALM) and the Short Test of Functional Health Literacy in Adults (STOFHLA). This fact suggests a need for a more liberal use of interpreters (Zun, Sadoun, & Downey, 2007). In addition, in Sarkar, Fisher, and Schillengers (2006) study of primary care patients, the authors found that health literacy levels were not a predictor of better self-management of diabetes[4].

Findings in financial literacy are similar. Courchane, Gailey, and Zorn (2007) analyzed the relationship between individuals (of all income levels) real credit records from 1.2 million mortgage loans and their self-assessments of their credit from a survey. These authors found that consumers perceptions of their credit quality did not always reflect their actual credit scores, although financial knowledge and literacy increased the accuracy of self-assessment. Those with low to moderate levels of knowledge about their personal credit scores often overestimated their level. Those with incomes of less than $35,000 also overestimated their credit scores. These findings suggest that individuals who inaccurately assess their own credit scores are likely to be denied credit, pay higher costs on mortgages, and/or have other negative financial outcomes.

Past behaviors are indicators of future behaviors. Within the financial literacy research, many personal characteristics indicative of stronger previous financial management, such as homeownership or having greater financial assets, are associated with better future financial decision making. In a study of a small IDA program, Grinstein-Weiss, Curley, and Charles (2007) found that home ownership upon entry into the IDA program was an important predictor of savings. In a similar manner, graduation from an IDA program emerged as a significant predictor of household savings, resulting in a $341 increase in household savings, compared with the savings of those who did not complete the IDA program (Loibl et al., 2008). The authors found that future orientation toward financial planning emerged as a main effect in predicting household savings. Loibl et al. also reported that participants with greater household financial assets were more likely to be employed full time or to own an investment account, and were more aware of the future consequences of their financial actions. These findings suggest that previous successes in financial management create financial dispositions and behaviors that provide long-term benefits. Over several years, the strict program structure and intensive financial training may help participants build the skills they need to achieve savings goals even after leaving the IDA program. As greater household financial assets are associated with considering future consequences, it is possible that individuals with better previous financial behaviors are more likely than program graduates to have better future behaviors (Loibl et al., 2008).

Higher self-efficacy is associated with better self-care and disease management. Self-efficacy is the belief in one's own ability to succeed at performing specific tasks. Individuals with high self-efficacy are likely to be more proactive about a situation because they believe that their actions matter, whereas people with low self-efficacy may have a sense of hopelessness or fatalism about a situation, feeling that nothing that they do will make a difference. Self-efficacy was originally defined by Bandura (1977) and is used to understand an individuals ability to perform activities, as well as to take initiative. Three recent studies examined the association between self-efficacy and managing chronic health conditions.

Sarkar, Fisher, & Schillinger (2006) conducted a study examining factors associated with better self-care and disease management of low-income patients at two primary care clinics. Across race/ethnicity and health literacy levels, people reporting higher levels of self-efficacy also tended to show a greater likelihood of following an optimal diet and an exercise regimen. Each 10-point increase in reported self-efficacy (out of a 100 point scale) was associated with a 16% higher likelihood of following an optimal diet and a 10% higher likelihood of following an exercise regimen. There were also significant relationships found between self-efficacy and self-monitoring of blood glucose and between self-efficacy and foot care.

In a smaller study of adults in Chicago who sought to improve asthma self-efficacy, the researchers randomized participants into a control group that received only education pamphlets and a treatment group that participated in four group sessions lead by a community social worker and received six home visits by community health workers (Martin et al., 2009). The 42 participants were predominantly African American and of low-income status, and had poorly controlled, persistent asthma. After the counseling, the treatment group reported significantly higher asthma self-efficacy at 3 months. At 6 months, the intervention group had improved asthma quality of life, compared with controls. Another study of 275 hospital patients found that the most significant predictor of low medication adherence was low self-efficacy (Gatti, Jacobson, Gazmararian, Schmotzer, & Kripalani, 2009). In other words, patients who did not believe that they could manage their medications were not likely to do so. Finally, in one study on information seeking by low-income pregnant women, Shieh, Mays, McDaniel, and Yu (2009) found that a significant barrier for women with low health literacy was low self-efficacy.

Although the direction of causality is unclear, whether certain behaviors cause self-efficacy or self-efficacy causes certain behaviors, there is evidence that self-efficacy is a predictor of self-management. This finding suggests that activities and information to increase self-efficacy could play a critical role in health and financial literacy. Thus, developing an initiative that attempted to increase an individuals self-efficacy as well as changing a behavior may increase the likelihood of success for an initiative.

The benefit from focusing on consumers with the poorest financial literacy could apply to health literacy initiatives. Low-income consumers have the most to gain from financial education if the education targets low-income-specific issues. Two recent studies also found that counseling provided the greatest benefit to those borrowers with the least demonstrated ability to handle credit at the time of counseling (Chang & Lyons, 2008; Elliehausen et al., 2007). In a similar manner, Hathaway and Khatiwadas (2008) literature review found two studies suggesting that education for low-income consumers should target financial issues particularly affecting low-income households, such as public and work-related benefits and predatory lending, although the authors did not provide specific data from the studies. Furthermore, the authors argue that, because of the variety of public benefits, financial educators must be knowledgeable about what is available in their area. Translating this finding into the health field, targeting persons with multiple chronic conditions or with significant disabling conditions may lead to better outcomes or better health stabilization than more general health literacy initiatives would. Targeting those with the greatest need is not a widespread practice in the health literacy field, although there are two such examples: The patient-centered medical home and the Chronic Care Model. A patient-centered medical home is an approach to providing comprehensive primary care that is patient centered; care is coordinated and integrated, and has a whole-person orientation. Patient-centered medical homes typically concentrate on persons with chronic conditions, and have been effective in preventing emergency room visits, reducing costs, and improving quality of care (Grumbach, Bodenheimer, & Grundy, 2009). The Chronic Care Model encourages more education and interaction between the provider and the patient (Wagner, 1999). First developed by Wagner in 1999, this model seeks to improve clinician interactions with patients, thereby encouraging patients to be informed, engaged, and active. Clinicians plan, educate, and provide decision making support. The model starts with changing the behavior of the health care team to tailor information to patients and train patients to take care of themselves and manage their own condition or conditions. In turn, patients have the necessary information and skills to make decisions and have confidence in making health care decisions later. In a study using the Chronic Care Model in the community, the researchers reported decreases in blood glucose levels, decreases in non-HDL cholesterol[5], and improvements in diabetes knowledge (Piatt, et al. 2006). Focusing on individuals with the greatest need could benefit health outcomes and could be a more effective use of resources under certain circumstances.

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