I was alerted to this recent and most interesting announcement by the Australian Government:
From 1 April 2019 the following natural therapies will be excluded from the definition of private health insurance general treatment and will no longer receive the private health insurance rebate as part of a general treatment policy: Alexander technique, aromatherapy, Bowen therapy, Buteyko, Feldenkrais, Western herbalism, homeopathy, iridology, kinesiology, naturopathy, Pilates, reflexology, Rolfing, shiatsu, tai chi, and yoga.
Rules have been made to exclude these natural therapies from the definition of general treatment under section 121-10 of the Private Health Insurance Act 2007. Insurers will then not be able to offer benefits for these therapies as part of a complying health insurance policy.
Insurers can offer incentives to purchasers of private health insurance as long as the incentives meet the requirements of the Private Health Insurance (Complying Product) Rules. These incentives could include services provided by a natural therapist. It will be up to each insurer to decide whether to offer this type of incentive.
Consumers will still be able to choose to access these natural therapies outside the private health insurance system.
Why is this important?
A review chaired by the former Commonwealth Chief Medical Officer found there is no clear evidence demonstrating the efficacy of the excluded natural therapies.
This review was informed by an evaluation of the evidence undertaken by the National Health and Medical Research Council (NHMRC). NHMRC was tasked with reviewing scientific literature examining the effectiveness and, where available, the safety and cost effectiveness of 17 natural therapies. This was conducted in line with NHMRC’s approach to assessing evidence, and was undertaken for the specific purpose of informing the Australian Government’s Natural Therapies Review.
Changing coverage for the excluded natural therapies will ensure taxpayer funds are spent appropriately and are not directed to therapies that do not demonstrate evidence of clinical efficacy.
Who will benefit?
Around 54 per cent of the Australian population is covered by general treatment (extras) insurance. Changing coverage for the excluded natural therapies will remove costs from the system and contribute to reducing private health insurance premium growth.
What impact will this change have on private health insurance?
This change will contribute to reducing private health insurance premium price increases.
The attempt to make health insurance more evidence based is no doubt laudable. I therefore commend this decision and hope other countries are following suit. Despite my general agreement, I feel compelled to make a few critical comments:
- Some of the banned treatments are not entirely devoid of good evidence. I am thinking of herbalism and tai chi, for instance.
- Iridology is a diagnostic technique and not a ‘natural therapy’.
- The term ‘natural therapy’ is of debatable value: not all of the listed modalities are natural (nothing natural about homeopathy, for instance). Personally, I much prefer ‘so-called alternative medicine (SCAM).
- I can think of many more SCAMs that should be on this list.
It will be fascinating to see whether the stated prediction that the ban will reduce health insurance premiums will be borne out by data. Many SCAM enthusiasts have in the past argued that it will have the opposite effect. Therefore, it would seem very important that the economic effects of this decision are being accurately monitored and that, in time, the results are analysed and published.