Approximately 60% of Australians have low or marginal health literacy, which is associated with poorer outcomes in patients with chronic disease. Patient-centred strategies (such as reduced medical jargon, use of pictograms, multimedia narratives) are effective in improving outcomes for many chronic diseases, with the impact being greatest in individuals with low health literacy. However, clinicians need a reliable and practical tool for assessing health literacy, the results of which help inform the choice of communication techniques best tailored to deliver information to patients. This article reviews the evidence of health literacy as an independent predictor of poor disease outcomes, describes feasible methods for assessing health literacy and presents communication strategies aimed at facilitating shared decision-making among those with low health literacy.