While it is still unknown whether insurance will pay for psychedelics-based mental health treatment, there is some evidence that providers are at least looking for more data on the therapy.
Two years ago, the Multidisciplinary Association of Psychedelic Studies (MAPS) worked with Elliot Marseille, the course director for cost-effectiveness analysis in medicine and public health at the University of California in San Francisco, to get an idea of the cost-effectiveness of MDMA-assisted psychotherapy from the health care payer’s perspective.
That psychedelic is more advanced than many others in terms of research and development for insurance coverage.
The research team built a decision-analytic model to show the costs and health benefits of treating patients with chronic, severe, or extreme treatment-resistant PTSD. Their model calculated the expected medical costs, mortality, quality-adjusted life-years (QALYs), and incremental cost-effectiveness ratio. They discovered a net savings of $103.2 million over 30 years compared to continued standard of care.
Ketamine-assisted psychotherapy treatments, which is currently the only FDA-approved psychotherapy, largely get paid out-of-pocket, which puts these therapies out of reach for most people. According to Joseph del Moral, co-founder and CEO of Field Trip, during a July 2021 webinar at Network for Excellence in Health Innovation, a full course of treatment (14 visits including screenings, ketamine dosing sessions, integration therapy, and evaluations) may exceed $5,000 for the first year alone. The Institute for Clinical and Economic Review, an independent nonprofit research institute that produces reports analyzing the evidence on the effectiveness and value of drugs and other medical services, reported the annual costs of ketamine treatment after the first year to be $3,700.
Progress on cost-effectiveness of these treatments is being made. Marseille is also a principal of the Global Initiative for Psychedelic Science Economics, a network of health economists working on a variety of projects that will give insurance companies the data they need to work with psychedelics.
Current projects include:
- Collaboration with the Usona Institute, modeling the cost-effectiveness of psilocybin-assisted psychotherapy to treat major depressive disorders.
- Collaboration with Johns Hopkins University’s Center for Psychedelic and Consciousness Research, evaluating the cost-effectiveness of psilocybin-assisted therapy for smoking cessation.
- Modeling the short and long-term epidemiological, economic, and budgetary impacts of scaled-up access to psychedelic therapies at the state and national level.
For now, the clinical trials on MDMA, psilocybin and other psychedelics continue to demonstrate how effective they are for treating mental health conditions, something that had been basically shots in the dark from mainstream pharma using medications that were only briefly effective and had bad side effects.
As more clinical trials prove the effectiveness of psychedelics, insurance companies are beginning to pay attention. They are game changers, as noted in one study that concluded the use of psilocybin in the treatment of addiction could alter the landscape of an area of medicine that has evolved incrementally.
“For those individuals with substance-use disorders and tobacco addiction who wish to decrease or eliminate their behavior, psilocybin-assisted therapy may become a useful asset for medical professionals attending to these individuals,” the study reported. “The use of a substance with a low risk of dependence and toxicity on a limited, supervised basis in the pharmacologic treatment of individuals predisposed to addiction is ideal.”
There are glimmers of hope for coverage of psychedelics. For example, the Affordable Care Act (ACA) and other federal laws and rules require most health insurance plans in the U.S. to cover some level of tobacco cessation treatments. Will that include psychedelics?
Another signal from the insurance industry happened last November, when Novamind (CSE: NM) (OTCQB: NVMDF) (FSE: HN2) announced that it received approval for direct billing of intravenous ketamine for treatment-resistant depression from four major health insurance providers: Blue Cross Blue Shield, the University of Utah, PEHP Health & Benefits, and MBA Benefit Administrators.
CBD hemp products company HempLucid offers ketamine therapy as a mental health benefit to their 20 employees, working in partnership working with Numinus (NUMI: TSX). HempLucid reported that their corporate mental health program “has profoundly affected the lives of the employees who have participated. Ketamine treatments are often highly meaningful for individuals, who are able to return to the workplace feeling like their stress and anxiety are lessened and more manageable. Employees surveyed have routinely reported increased productivity, creativity, and well-being as a result of the treatments.”
With medical psilocybin legalized in Oregon and Colorado – and more legalization likely to come in states that have taken the steps to decriminalize psychedelics – insurance companies are poised to jump into what could be a very lucrative industry that could help reduce health care costs across the board.