Insurance Is Not Evidence
Debunking the idea that “it must be good if insurance companies pay for it”
People assume that medical insurance companies are so savvy, mercenary, and parsimonious that they would never be willing to pay for ineffective health services. This idea is often used as a substitute for scientific evidence by alternative medicine advocates: surely such tight-fisted corporations wouldn’t pay for useless treatments? Right? Therefore acupuncture, homeopathy, and laser therapy must work.
Following the money is almost better than science!
That’s not how it works. Insurance companies do not have secret methods of determining the efficacy of unproven treatments. They are not ahead of science. They do not have the evidence. “Insurance-based medicine” is not a thing.
And they do have other greedy motives. You get what you pay for: ineffective treatments are generally cheaper! And their customers demand it. That’s it in a nutshell.
You get what you pay for
Insurers know they can get away with paying a lot less to “amuse the patient while nature cures the disease.”1
Ineffective treatments are mostly much cheaper, and yet also famously good at seeming effective, especially in the relatively short term2 — it’s practically their job description, the reason they exist and persist in the marketplace. And then regression to the mean kicks in, and that is a powerful force.3 Most people will recover from most things just fine in time without some of the more expensive surgical options that (in some cases) would have gotten them to the finish line sooner and easier.
This was hilariously satirized by Dr. Glaucomflecken bit (1 minute video), with “Ortho Guy” talking to “Insurance Guy” and getting told that he his patient can’t get coverage for surgery because he hasn’t tried alternative medicine first:
INSURANCE GUY — Come on ortho, let’s try some futile non-surgical options for a while.
ORTHO GUY — No!
INSURANCE GUY — Well, your patient has to fail something before I can approve a treatment that works.
Dr. G is doubling up on his punching up, simultaneously satirizing two behemoths that get in the way of good care:
the wide array of “futile non surgical options,” many of which are either blatant quackery or at least pseudo-quackery,
and the American medical insurance industry, which likes to pay for those cheaper options.
(Not that orthopedic surgery doesn’t have plenty to answer for as well. Sigh)
Insurers pay for some alternative medicine because it’s popular
The insurance industry also has a long history of insuring the treatments people want, regardless of any other consideration; they get sucked in by the same hype that their clients are sucked in by. They may be infamously tight-fisted, but they also have to sell insurance. They want to attract new customers and placate existing ones. They will only drop coverage of a treatment when the absence of evidence and/or evidence of absence reaches a critical mass, or if cost ineffectiveness starts to become a glaring problem.Dr. Edzard Ernst makes this point in, “Why Do Insurance Companies Pay for Ineffective Treatments?” Here he's paraphrasing actual insurance folks explaining why they pay for dubious treatments:
We know the evidence, of course, and we know how flimsy it is, particularly for homeopathy. But we still pay for it, because the competition does it too. We cannot be seen to offer less than they do. This is purely a commercial decision about being seen to be competitive.
So there you have it, right from the horse’s mouth (well, close). Insurance companies do have reasons for paying for a service even when they know it’s ineffective. Which shouldn’t surprise anyone.
An insurance company grapples with the value of massage therapy
Consider this recent insurance company report on the long-term effect of paying for massage therapy:
We may think intuitively that there is a downstream positive impact for people who use these benefits [mainly massage therapy, but also chiropractic and physiotherapy]—it makes them feel better, so arguably their usage of other benefits [health care services] should be lower than other plan members. But in our study, when we looked at those who use massage and chiropractic and compared their drug costs to others who didn’t use them, we found their drug costs are, in actual fact, higher.
So this is completely at odds with what most people probably assume: an insurance company saying that they have data that strongly suggests that massage therapy and chiropractic may not be worth paying for, because those patients do not have reduced health care costs later on (not their drug costs, anyway).
And yet they’ve been paying for it anyway. Why? Probably because they’d have a major marketing and PR problem if they refused to pay for massage therapy and chiropractic! These are popular services. If only popularity actually meant something …
The point is the surprising self-doubt of an insurance company
The point is not whether or not the insurance company is correct. It is not about whether massage therapy and chiropractic are actually cost-effective in the long run. We don’t know. They don’t know. The quoted position of an insurance company is not even low quality evidence of that one way or the other.
The point here is that an insurance company was having some surprising self-doubt about the value of paying out this particular benefit. People like to assume insurance companies “know” because they have a finely tuned sense of value. The only evidence I’ve presented here is evidence that they do not know. They pay for services mainly because people want them. And, contrary to what most people would expect, here’s a company that actually fears that perhaps they should not be paying for massage and chiropractic... but is still doing it anyway, at least for now. I think that’s inherently interesting.
But it doesn’t tell us whether or not massage therapy and chiropractic patients actually do end up spending more on drugs in the long run.
About Paul Ingraham
I am a science writer in Vancouver, Canada. I was a Registered Massage Therapist for a decade and the assistant editor of ScienceBasedMedicine.org for several years. I’ve had many injuries as a runner and ultimate player, and I’ve been a chronic pain patient myself since 2015. Full bio. See you on Facebook or Twitter., or subscribe:
Related Reading
- Science versus Experience in Musculoskeletal Medicine — The conflict between science and clinical experience and pragmatism in the management of aches, pains, and injuries
- 14 Kinds of Bogus Citations — Classic ways to self-servingly screw up references to science, like “the sneaky reach” or “the uncheckable”
- Alternative Medicine’s Choice — What should alternative medicine be the alternative to? The alternative to cold and impersonal medicine? Or the alternative to science and reason?
- Ioannidis: Making Medical Science Look Bad Since 2005 — A famous and excellent scientific paper … with an alarmingly misleading title
- Popular but Weird & Dangerous Cures — The most dangerous, strange, and yet popular snake oils and “treatments” in history (and why anecdotes and testimonials cannot be trusted)
- Why “Science”-Based Instead of “Evidence”-Based? — The rationale for making medicine based more on science and not just evidence… which is kinda weird
What’s new in this article?
Apr 22, 2025 — This article just got its first-ever substantive update. After being largely ignored for years, suddenly it seemed obvious that more could and should be written — and so it was. A small update relative to others on the site, but big for this little article. In particular, I wanted to point out that insurers are motivated by the relative bargain of paying many ineffective treatments.
2015 — Publication.
Notes
“Doctors and quacks amuse the patient while nature cures the disease.”
not Voltaire
A classic quote with many variants and weak attributions. It dates to the 1600s and was popularized by Pitton, but he gave credit to “Eraste” … identity unknown! Several other famous names are weakly attached to this quote (usually Voltaire), but none of them deserve it. See QuoteInvestigator.com: Quote Origin: Doctors Are Paid To Talk Nonsense With the Patient Until Nature Heals Or the Remedies Kill.
- CSICOP.org [Internet]. Beyerstein B. Why Bogus Therapies Seem to Work; 2011 Dec 7 [cited 25 Apr 21]. PainSci Bibliography 55159 ❐
- “Regression to the mean” just means that everything, including health, tends to drift back towards normal over time. It’s just a statistician’s way of saying “people mostly get better” — because, statistically speaking, they usually do. They also tend to finally get better somewhere around the same time they are getting sick of being sick, and typically attribute their “recovery” to whatever treatment they happened to be paying for lately, no matter how unlikely, because the human mind is ridiculously prone to simplistic causality inferences. For more about all this, see The Power of Barking: Correlation, causation, and how we decide what treatments work: A silly metaphor for a serious point about the confounding power of coincidental and inevitable healing, and why we struggle to interpret our own recovery experiences.