One of the most interesting issues in the health care finance debate is whether a consumer should be able to shift at least a portion of the cost of a placebo to a broad base of insureds. As The Economist notes, placebos are big business and – in some cases – just as effective as the real thing:

Alternative medicine is big business. Since it is largely unregulated, reliable statistics are hard to come by. The market in Britain alone, however, is believed to be worth around ¬£210m ($340m), with one in five adults thought to be consumers, and some treatments (particularly homeopathy) available from the National Health Service. Around the world, according to an estimate made in 2008, the industry’s value is about $60 billion.

Over the years Dr [Edzard] Ernst and his group have run clinical trials and published over 160 meta-analyses of other studies. (Meta-analysis is a statistical technique for extracting information from lots of small trials that are not, by themselves, statistically reliable.) His findings are stark.

According to his “Guide to Complementary and Alternative Medicine”, around 95% of the treatments he and his colleagues examined–in fields as diverse as acupuncture, herbal medicine, homeopathy and reflexology–are statistically indistinguishable from placebo treatments. In only 5% of cases was there either a clear benefit above and beyond a placebo (there is, for instance, evidence suggesting that St John’s Wort, a herbal remedy, can help with mild depression), or even just a hint that something interesting was happening to suggest that further research might be warranted.

Should a portion of your health insurance premiums be used to pay a portion of the cost of a placebo for your co-insured? Or is this an example of the situation in which the third party-payor system simply doesn’t control costs as well as a consumer-payor system?