Why Health Insurance Companies Should Look Beyond One-Year Economic Impact

What I’ve seen in Saudi private healthcare

I've noticed something about how insurance companies operate in KSA; they will not pay for something that is more expensive, even if it has an improved clinical profile. Also, insurance companies have been known to reject therapies that need more than 1 year to achieve cost savings. (Caveat: depends on strength of the patient's policy)

Is this behaviour right?

Case study: knee replacement

I find this question impossible to answer if we look at things generally so let's focus on 1 procedure:

Knee replacement

As above, I’ve heard that knee replacements are typically difficult to get approved at an insurer. So, is delaying surgery good or bad for the patient, the insurance company, the healthcare system and society as whole?

Short answer

Delaying the surgery is bad for all of the above, according to a systematic review published in 2017.

Long answer

In their systematic review of knee and hip replacement surgery, the authors of a 2017 publication identified 98 studies between 2004 and 2016, which covered 9 countries (North America, Europe and Singapore). The most common interventions were total knee or hip arthroplasty.

We will only look at knee replacement.

Comparing knee replacement with non-surgical methods (e.g., medication and physio), all 4 studies identified found total knee arthroplasty to be cost effective. This means that it was more expensive to do the surgery over an extended period of time, but the improved patient outcomes were worth paying the extra cost because it was small enough to be justified.

Comparing knee replacement with ‘a do nothing approach’ showed the same as above, surgery was cost effective (more expensive, but the added cost was small enough to be worth it).

What about delaying the surgery? Another study did the analysis and showed that knee replacement “without delay may be an overall cost-saving health care delivery strategy”.

My opinion

At the end of the day, insurance companies must generate a profit to survive. However, decision making on therapies that need more time to realise a cost saving or ones that provided added benefit for added cost must be evaluated through a different lens. The Council Of Health Insurance (CHI) have implemented the Essential Benefits Package, which does address parts of this problem, but it does not cover all disease that have therapies that fall in this bucket.

Perhaps the upcoming changes by the CHI will walk us one step closer to improved patient access to these therapies.

Important disclaimers

1. I work for a Medical Devices company. It is in my interest that insurance companies pay for more therapies.
2. I do not have any reference to support the claims “insurance companies only consider the cost at 1 year” and “insurance companies do not pay for knee replacements”, just what of heard...
3. I am talking about knee replacement, where the data neatly fit my argument. Other conditions need their own deep dive before an overall decision is reached. Always be careful to avoid selection bias. In the same study, hip replacement is reviewed, and the outcomes are broadly in line with knee replacement, but there are fewer studies, increased variables and more nuance.

Sources

Inspiration: The idea is mine, but I used MS Copilot to sharpen into this article. AI was not used to write anything.

Kamaruzaman H, Kinghorn P, Oppong R. Cost-effectiveness of surgical interventions for the management of osteoarthritis: a systematic review of the literature. BMC Musculoskelet Disord. 2017 May 10;18(1):183. doi: 10.1186/s12891-017-1540-2