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Insurance Is Not Evidence

Debunking the idea that “it must be good if insurance companies pay for it”

Paul Ingraham, updated ARCHIVEDThis page has been archived. Archived pages are rarely or never updated. Most featured articles on PainScience.com are updated regularly over many years, but not archived pages.

People assume that insurance companies are so savvy and parsimonious that they would never cover health services that weren’t effective. This premise is often used as a substitute for scientific evidence by alternative medicine advocates: surely such infamously tight-fisted corporations wouldn’t pay up if it wasn’t worthwhile, right? That’s almost better than science! Follow the money!

But insurance companies do not have secret methods of determining the efficacy of unproven treatments, out of the reach of science.

The insurance industry has a long history of insuring the treatments people want; they get sucked in by the same hype that their clients are sucked in by. Remember, insurance companies 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.

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 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 good evidence of that one way or the other. It’s worth noting, but it could easily be quite misleading … and, in fact, I suspect it is!

The point of this post 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.

So why do insurance companies pay for treatments? If not evidence?

A short post from Dr. Edzard Ernst, “Why Do Insurance Companies Pay for Ineffective Treatments?” adds a nice point to this discussion, further demonstrating that the insurance industry is not inspired by evidence. Here’s Dr. Ernst 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. Insurance companies do have reasons for paying for a service even when they know it’s ineffective. Which shouldn’t surprise anyone.

About Paul Ingraham

Headshot of Paul Ingraham, short hair, neat beard, suit jacket.

I am a science writer, former massage therapist, and I was the assistant editor at ScienceBasedMedicine.org for several years. I have had my share of injuries and pain challenges as a runner and ultimate player. My wife and I live in downtown Vancouver, Canada. See my full bio and qualifications, or my blog, Writerly. You might run into me on Facebook or Twitter.

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