Rolfing and rebates: the rise of natural therapies
The acceptance of natural therapies by private health insurers has boosted the industry's credibility but also boosted the cost on the private and public purse, writes Joanna Heath
by Joanna Heath
Did you know the government would subsidise you to get Rolfed if you wanted to?
Rolfing is the practice of manipulating soft tissue to better organise the body in gravity, popular in the United States in the 1970s and now enjoying a resurgence. There's little credible evidence that it works, but that hasn't stopped Medibank , which up until late last year was owned by the government, from reimbursing its members for a session with a qualified Rolfer. And through the private health insurance rebate, that Rolfing session is effectively subsidised by the government.
The increasing popularity of natural therapies like Rolfing and the push from private health insurers to attract younger members by covering them is starting to attract some unwelcome controversy. Should taxpayer dollars be used to help cover the cost of unproven therapies?
Agnes Tzimos, a Canberra resident in her 30s, regularly claims for naturopathy, massage and herbalist treatment on her private health insurance, as well as gym membership. She says she would still get the treatments even if they were not available on private health, but argues they should stay eligible.
"It does offer a solution for many people with certain health problems that commercial medicine doesn't address. The body is more complex than handing over a bunch of pills," she says.
"Often GPs just look at stuff in quite a reductionist way, that more linear style. Not all, but a lot do."
Tzimos use of natural therapies reflects a trend by the private health companies to cover these areas to attract younger policyholders who tend to be healthier, and don't claim as much on expensive hospital or emergency treatments.
But while the gradual acceptance of alternative treatments by private health insurers has boosted the natural therapy industry's credibility it has also boosted the secondary effects on the private and public purse.
As coverage has increased, so have private health insurance claims. According to the Private Health Insurance Administration Council, benefits paid out by insurers in the natural therapies category of treatments increased by 345 per cent between 2002-03 and 2012-13. The $135.2 million payout in 2012-13 was far larger than benefits for ambulance services.
In the December quarter of 2014 alone, policy-holders lodged 1.3 million claims for natural therapies, with average fees of about $63.70. Private health insurers paid nearly half of that back (46 per cent) in rebates on average.
Apart from Rolfing, some other lesser-known therapies that are covered include iridology, which involves diagnosing diseases through patterns in the iris. Feldenkrais, Bowen Therapy and kinesiology all teach that manipulating the body in different ways helps to promote self-healing. There's also the old stalwarts naturopathy, which is viewed as the "general practice" of natural therapies, and homeopathy.
Homeopathy treats health problems "holistically", according to the principle that substances which cause symptoms in a healthy person can be used to treat a sick person in their diluted form. The Australian Homeopathic Association uses the example of coffee - in a healthy person, it could cause insomnia. So if a person presents who is already afflicted with insomnia, they can be given diluted coffea cruda for their treatment - unroasted coffee beans.
But a landmark review by the National Health and Medical Research Council this week put homeopathy in a harsh spotlight.
After examining more than 1800 papers, the Council found there was no credible evidence that homeopathic treatments were more effective than a placebo or as effective as any other treatments. The report's authors called on private health insurers to stop covering the therapy.
It comes at a tricky time for the natural therapies industry which, according to a report by IBISWorld, will be worth $3.9 billion nationally in 2014-15.
Newly-installed Health Minister Sussan Ley is sitting on a report commissioned by the former Labor government on whether the private health insurance rebate should be removed from natural therapies that are deemed to be unproven. Leaks from the report suggest it has concluded in the affirmative, and Ley is under pressure to find savings in the upcoming May budget.
The government's previous attempts to find structural savings through Medicare reform have stalled, with the majority of the $3.2 billion package announced by Prime Minister Tony Abbott and former Health Minister Peter Dutton in December 2014 since dumped. Ley is now tasked with finding a new savings measure to replace the GP co-payment, which was tossed out this month, to keep the budget number-crunchers happy.
The private health insurance rebate, which is as high as 38 per cent of the cost of premiums for some age groups, is applicable to general treatment policies which include coverage for natural therapies.
The rebate is one of the biggest single line item costs for the government, though this has been reduced since the former Labor government introduced means-testing in 2012. According to a report in News Corp newspapers earlier this year, the government would save about $80 million over the budget forecast period by stripping the rebate from 17 natural therapies.
Adam Stankevicius, chief executive of the Consumers Health Forum, thinks it is a no-brainer for the government to act.
"Certainly we are very concerned that taxpayer dollars would be going into therapies which are not only unproven but give consumers false hope. Where consumers see the government supporting something financially there is an implicit view those therapies must be worth something," Stankevicius says.
"This, I suppose, is one of those things which is glaringly obvious where the government could make savings but also put a bit more certainty back into the system as to what works."
Former Health Department Secretary Stephen Duckett , now health program director at the Grattan Institute, doesn't have a problem with natural therapies per se but takes issue with government subsidising them.
"Does it matter if I think acupuncture works or homeopathy works if there is no government subsidy?" he says.
Not incidentally, the government also helps with the cost of natural therapy courses given by accredited providers through its FEE-HELP student loan program.
Private health insurers jumping on the bandwagon is also part of a general industry move away from just health insurance and towards a more diversified concept of "wellness". This is where you don't just call on your insurer when you get sick but they proactively offer you dietary advice and pay for your yoga classes.
Bupa Health Services managing director Hisham el-Ansary sums up why his organisation covers natural therapies.
"There is one element of the debate that focuses on clinical efficacy. The other element focuses on what consumers want and demand. As an organisation that is focused on delivering for our customers we need to have a perspective that covers both of those bases," el-Ansary says.
For example, he says although some doctors believe vitamins don't work, "consumers don't believe they're useless".
Medibank says its decision to cover natural therapy consultations "is not intended to be an endorsement of the therapy, but is simply a response to demand from our members". It says its total benefit outlays on natural therapies are small - only 1.4 per cent in the 2014-15 financial year.
Nib does not share its competitors' easy-going attitude. Despite its customer base being dominated by younger policyholders, chief executive Mark Fitzgibbon has taken a hard line against treatments which he deems do not have a solid evidence base. His fund has not covered homeopathy since 2013. But it's not just natural therapies - Fitzgibbon also says clinical treatments like knee arthroscopies have questionable effectiveness.
"Things without any clinical efficacy we shouldn't be paying for. I think the industry should be taking a close look at homeopathy on that basis," Fitzgibbon says.
"I think it's probably just the start. There's far too many things we are paying for without clinical evidence."
But the coverage of natural therapies by private health insurers has one significant benefit to other private health insurance policyholders.
Insurance in Australia is underpinned by something called a risk equalisation pool. On a regular basis, insurers are required to contribute to an industry-wide pool of funds that are then redistributed to make sure that insurers who have a majority of older or sicker policy-holders on their books are not required to charge them higher premiums to stay afloat. It's the basis of the "community rating" system, which means policy-holders are not charged more or less based on how old or sick they are.
The younger the population of policy-holders an insurer attracts through offerings like natural therapies, the more that insurer is required to pay into the risk equalisation pool. So people holding policies with that sort of coverage are actually helping to subsidise sicker people, and keep their premiums low.
"Privately insured Australians who purchase these products are frequently young and healthy, and they comprise a population which looks after its own health status," chief executive of Private Healthcare Australia Michael Armitage says.
"Their premiums help to keep the premiums of the older, sicker population lower, so abandoning this young, healthy population would force premiums up for older, sicker members."
In the context of claims for general treatment as a whole, natural therapies are still small - only 1 per cent or $171.5 million of the total claimed in the category in 2014.
In their submission to the Department of Health's review into stripping the private health rebate from natural therapies, the Australian Natural Therapists' Association argued natural therapies should be recognised for their benefits, safety and cost-effectiveness through retention of the rebate.
Following NHMRC's report into homeopathy, the nation's largest health insurer Medibank says it will consider its findings when reviewing its coverage areas.
Linlee Jordan, a homeopath with 25 years' experience, says she is unconcerned about the impact of the removal of the private health insurance coverage for her profession since rebates are typically low.
"People keep coming back, they vote with their feet," she says.
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