How do insurers benefit from clients' choices to utilize CAM?

How do insurers benefit from clients' choices to utilize CAM?

• A. It increases the variety of services covered
• B. It leads to lower overall payouts
• C. It enhances customer satisfaction
• D. It reduces administrative costs

Answer: (B)

Insurers benefit from clients' choices to utilize Complementary and Alternative Medicine (CAM) primarily because it can lead to lower overall payouts. When clients choose CAM options, they may be opting for treatments that are less expensive than conventional medical interventions. This can result in reduced claims and lower overall costs for the insurer. Many CAM treatments, such as certain herbal therapies, acupuncture, or mind-body practices, might not require extensive medical infrastructure or elaborate diagnostic processes, ultimately resulting in less financial burden for the insurance company compared to standard medical care. While enhancing customer satisfaction and providing a variety of services may have their own benefits for insurers, the key financial advantage lies in the associated cost reduction of treatment payouts due to the lower costs of many CAM options.

Insurers benefit from clients' choices to utilize Complementary and Alternative Medicine (CAM) primarily because it can lead to lower overall payouts. When clients choose CAM options, they may be opting for treatments that are less expensive than conventional medical interventions. This can result in reduced claims and lower overall costs for the insurer. Many CAM treatments, such as certain herbal therapies, acupuncture, or mind-body practices, might not require extensive medical infrastructure or elaborate diagnostic processes, ultimately resulting in less financial burden for the insurance company compared to standard medical care.

While enhancing customer satisfaction and providing a variety of services may have their own benefits for insurers, the key financial advantage lies in the associated cost reduction of treatment payouts due to the lower costs of many CAM options.