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Public health care systems face criticism when they spend money on treatments that don’t work. With ageing populations and the rising cost of treatments, there’s more and more scrutiny of what these programs pay for. One of the most effective ways that insurance programs can reduce the use of a health service or treatment is to simply stop paying for it. But this is relatively uncommon, because once a benefit’s in place, there tends to be a lot of resistance to change – even if the move was wrongheaded to begin with. That’s one of the (many) reasons this blog has been critical of permitting the licensing of alternative-to-health providers like homeopaths and naturopaths. Legislation gives the alternative medicine a veneer of legitimacy (scientific or otherwise), and this legislative alchemy is the first step towards insurance coverage.

When public insurance doesn’t pay, private insurance may step in. And private insurance programs, from my observation, tend to be less evidence-based than public programs. They’re often offered as a benefit to employees, and so the occasional massage may be seen as a nice perk, even though it may not be medically necessary. Australia has a comprehensive public healthcare system which is supplemented by private insurance to cover the cost of treatments and service that are not publicly funded. In 2012 the Australian government announced a review of “natural” treatments covered by these private insurance plans to determine if these therapies were effective, safe, and provided good value for money. While you might wonder why a government would care about what private insurance covers, it’s because the Australian government offers a rebate on insurance premiums, effectively subsidizing their cost. The review sought to determine if a variety of treatment were backed by good scientific evidence and deserved tax subsidies. The answer may not surprise you.

The Review of the Australian Government Rebate on Natural Therapies for Private Health Insurance

In 2015, the Australian government completed a review of natural products covered by private health insurance plans. The authors looked for direct evidence of efficacy, focusing on systematic reviews and randomized controlled trials (for which there was little evidence.) The review evaluated the following treatments:

As I discussed earlier, the review didn’t consider plausibility in its review, which was a huge oversight. Practices like homeopathy and iridology are pure pseudoscience, while therapies like Pilates, yoga and tai chi are forms of exercise which have far more potential to offer some therapeutic benefits. The authors concluded, however, that the lack of evidence signaled that these treatments could not fairly be considered “evidence based”.

The end of insurance subsidies

Not surprisingly, based on the report, the Australian government has now removed coverage for all 17 therapies studied in the initial review. This move is part of an overall strategy to reduce the cost of private insurance for consumers, and boosting coverage for services like mental health. Not surprisingly, organizations like the Australian Homeopathic Association are not impressed. What this means is that while people can still choose to access these therapies, they cannot be offered benefits under these private insurance programs. Notably, not on the list are chiropractic, acupuncture and reiki, none of which were included in the initial review – it’s not clear to me what their current status is under these programs.

While Australian government should be commended for acting on the expert advice it received, it’s worth noting that the committee, had they considered plausibility, might have arrived at slightly different conclusions about some of these interventions. Ultimately, however, it’s fair to ask if any of these modalities deserve tax subsidies, which was the overall point of this work. As I noted earlier, cutting entitlements is difficult, and Australia’s decision to end these subsidies, on the basis of a lack of evidence, will hopefully trigger similar reviews in other countries.