A short new post from Dr. Edzard Ernst adds a nice point to something I wrote in 2015 debunking that silly old idea. It really is not how the insurance industry works. Dr. Ernst had an opportunity to talk with some actual insurance people about this. Here’s how he paraphrased their explanations of 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, 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 actually surprise anyone.