OPINION: Cut to private health insurance for Australian natural therapies a 'false economy'

By Gary Scattergood contact

- Last updated on GMT

President of the Australian Homoeopathic Association, Gerry Dendrinos.
President of the Australian Homoeopathic Association, Gerry Dendrinos.

Related tags: Medicine

The Australian Federal Government will cut rebates for a range of natural therapies from 1 January 2019, affecting 16 widely used therapies such as naturopathy, herbal medicine, homeopathy, yoga, tai chi and aromatherapy, writes the president of the Australian Homoeopathic Association, Gerry Dendrinos.

Two in three Australians use some form of complementary medicine and / or natural therapy, which equates to around 14 million people.

The Australian Treasury has estimated short-term cost savings of just over $50m per year from the proposed PHI cut measure.

However, the complementary medicine sector argues that this represents a false economy, an apparent saving that in fact leads to greater long term costs to the health care system.

This is because natural products and therapies contribute to the maintenance of a healthy lifestyle and better quality of life, as well as assisting people to manage chronic health conditions. Government investment in private health insurance for natural therapies represents an investment in both disease prevention and chronic disease management.

Another factor is that the policy will increase peoples’ out of pocket expenses, which will drive pressure on the public health system as people budget for natural therapies at the expense of investing in private health insurance. A recent Newspoll survey commissioned by industry found that 21% of those with private health insurance would consider reducing, changing or stopping their cover altogether and that amongst users of natural therapies, 37% would consider reducing/changing their private health insurance cover should a fund remove or reduce their coverage.

Preventive health is important in improving the cost effectiveness of, and taking pressure off, the public healthcare system. Research conducted by PricewaterhouseCoopers indicates that when people invest in natural therapies, it results in substantial cost savings to the healthcare sector. It shows that across all levels of hospital cover, members who also receive ancillary benefits for natural therapies and lifestyle services claim almost $200 per person less every year in hospital and medical costs than their counterparts who do not choose these services.

Extrapolating such results across the entire privately insured population indicates the potential cost savings for the national health system would be at least $1 billion per annum, if all insured people were appropriately supported with private health insurance benefits for natural therapies.

Broader benefits

However, it appears the Government has not considered such findings or conducted longitudinal analyses in formulating its position. The Government has also ignored comprehensive reviews of the evidence base for natural therapies practice. For example, the findings of an Australian Bureau of Statistics assessment​, which found that people who had visited a natural therapist were more likely to have healthier behaviours, including eating the recommended minimum serves of fruit and vegetables, exercising more and not smoking.

Instead, the policy is justified solely on the basis of clinical evidence reviews conducted by the National Health & Medical Research Council (NHMRC) on behalf of the Department of Health - the Review of the Australian Government Rebate on Private Health Insurance for Natural Therapies​ (the ‘NT Review’). The NT Review concluded there was “no conclusive evidence” that any of 17 natural therapies work, used by the Government as a basis to remove subsidy support.

The rigour of this process has been challenged by the natural medicines sector, which has pointed out critical flaws in how the Review was conducted.

In the first instance, the NT Review was instigated by the former Labor government in 2012, for the specific purpose of providing a formal justification for pre-proposed budget cuts flagged by the then Treasurer.

This explains the unprecedented and unusual methodology applied, which:

  • Did not retrieve or assess any original research trials for any of the 17 natural therapies
  • Excluded from scope large categories of evidence
  • Did not involve any subject/ research experts in any of the natural therapies under review
  • Appointed anti-natural medicine political lobbyists to the Review overview committee, without declaring or managing the conflicts of interests.

An example of the NT Review’s failure to assess large categories of evidence was excluding from scope the practice elements of Herbal and Naturopathic practice – a research evidence base representing thousands of peer-reviewed published studies. This resulted in the number of published studies considered for Herbalism and Naturopathy (combined) being 0.

A 2014 Frost & Sullivan report showed that several of the better known complementary medicines commonly prescribed by natural therapists (e.g. magnesium, calcium, Vitamins B6/ B12/ D, folic acid, lutein, zeaxanthin, St John’s Wort) are able to reduce the risk of experiencing a medical event associated with common chronic medical conditions, resulting in health benefits and considerable long term savings to the health system. None of this research evidence was assessed.

Terms not met

Moreover, the Department of Health Natural Therapies Review webpage​ informs the public that the Review “examined the evidence of clinical efficacy, cost effectiveness, safety and quality of natural therapies”​. In fact, no evidence was actively retrieved or assessed relating to cost effectiveness, safety or quality for any​ of the 17 natural therapies - only if such studies were accidentally captured within the secondary data retrieved. Thus, the NT Review’s Terms of Reference​ were not met.

It is unclear how a Review intended to inform Government on fiscal matters relating to health policy is fit for purpose, when it excluded any assessment of the predominantly positive research evidence base relating to clinical effectiveness, cost-effectiveness, safety and quality of natural therapies in real-world health care.

A further anomaly with the Government’s policy is that it excludes rebate cuts for massage, despite the NT Review concluding massage also had ‘no conclusive’ health benefits. Rebates for massage services account for over 60% of all claims for natural therapy services, raising a further question mark over apparent ‘savings’.

The Your Health Your Choice​ campaign is drawing public attention to these and other issues impacting the natural medicines sector in Australia. To date, the campaign has achieved around 70,000 sign ups in little over 4 months. It is calling for a Senate inquiry into bias against natural therapies, resulting in the public being misinformed about the research evidence underpinning natural therapies and their healthcare benefits.

Gerry is an experienced Homeopath and Western Herbalist with over 17 years clinical experience and is a representative of the 'Your Health Your Choice' campaign. He is the President of the Australian Homoeopathic Association and also works alongside Complementary Medicines Australia

Related topics: Oceania, Financial plays, Views, Supplements

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