You have been suffering from osteoarthritis for the better part of a decade. It has finally gotten so bad that pain medication just isn’t helping. Now you’re facing knee replacement surgery. Your doctor asks you to consider stem cell therapy, but there’s a hitch: your insurance company won’t cover it. You are leaning toward surgery because you cannot afford to pay for the stem cell injections yourself.
What’s wrong with this picture? If you don’t know, it is the fact that insurance companies are willing to cover a procedure fraught with risks, yet they will not cover another procedure that has already been declared safe by the FDA and could potentially alleviate the need for surgery altogether.
No, insurance companies still don’t cover regenerative medicine procedures like stem cell and PRP therapies. It doesn’t look like they plan to anytime soon, either. The regenerative medicine industry of today is facing the same thing chiropractic and acupuncture faced back in the 1970s and 80s. Insurance companies simply will not cover procedures no matter how much doctors and patients beg.
Here are four possible reasons that might explain insurance company reluctance:
1. Regenerative Medicine’s Experimental Status
Procedures like stem cell and PRP injections to treat osteoarthritis don’t have to be approved by the FDA as long as the material used in a given procedure is both autologous and minimally manipulated. As such, doctors and clinics don’t bother with the time-consuming and expensive approval process.
The end result is that, while the procedures may actually work, they are considered experimental because they don’t have FDA approval. Anyone who knows anything about insurance companies knows that they do not cover anything labeled ‘experimental’ unless it’s part of an FDA approved clinical trial.
2. Perceived Danger
There is a general perception of danger associated with regenerative medicine procedures. Those perceptions are unwarranted. According to the Advance Regenerative Medicine Institute, stem cell and PRP therapies are completely safe when performed in accordance with existing FDA rules. Nonetheless, that perceived danger makes insurance companies leery of covering regenerative medicine procedures. They simply do not want the liability.
3. Cost Management
The combination of experimental status and perceived danger suggests to insurance companies that covering regenerative medicine procedures will result in additional expenses later on. They fear they may pay thousands of dollars for a stem cell procedure, for example, and then still have to fork out thousands more to cover knee replacement surgery later on. Refusing to cover regenerative medicine thus becomes a cost management issue.
4. Bottom Line Concerns
This last reason, though it may be conjecture, is actually quite damning if true. It has been suggested that insurance companies don’t cover regenerative medicine because it could actually bring healthcare costs down, which would, in the end, harm the bottom line. Remember that health insurance is not insurance in the traditional sense. It is more of a payment transferal system than anything else.
Health insurance premiums are based on expected losses. The problem with this model is that premiums are supposed to go down as losses are reduced. But what insurance company wants to actually reduce premiums? Rather than covering procedures that might cut the cost of healthcare, they would rather cover things like joint replacement surgery and opioid prescriptions – things that keep loss rates stable.
The four reasons listed here can neither be proved nor disproved. They are conjecture. But each of them makes sense if you analyze the situation carefully. It could be that all four are contributing factors rather than just one being worthy of all the blame.