Examining the influence of insurance and moral hazard on the utilisation of practitioner-based complementary and alternative medicine

Abstract

Moral hazard (excess consumption of clinical services) is representative of consumer behaviour associated with the utilisation of services reimbursed from third-party payers. Within the USA, CAM is supported by numerous commercial and public insurance programmes. The objective of this article is to assess the utilisation of CAM when paid for by third-party payers. Data from the 2007 US National Health Interview Survey were examined to measure the relationship between insurance coverage and the utilisation of practitioner-based alternative medicine. Participant use of chiropractic, osteopathic manipulation and acupuncture was compared with health insurance coverage. The analysis applied standard epidemiological risk ratios to the data in order to calculate the effect of insurance coverage on CAM and moral hazard. The presence of health insurance was a strong facilitator of utilisation, with up to a 40% increase in utilisation when reimbursement mechanisms were introduced. The finding suggests that market-based strategies for dealing with moral hazard have little influence when applied to practitioner-based CAM, while insurance coverage plays a significant role in its delivery. Consequently, factors related to behavioural economics and agency modelling may undermine efficient utilisation and payment for CAM services.