An orthotic is a specialized designed appliance formed to your individual foot.  It is different than most shoe inserts, arch supports, or over-the-counter orthotics.  To help you better understand orthotics, we must first discuss the other items commonly seen:
Orthotics can correct foot imbalances, decreasing pain
Shoe Insert -- Many stores (including grocery stores, sports stores, and pharmacies) carry shoe inserts that are designed by multiple manufacturers.  A good example of this type of insert would be most Dr Scholls type inserts.  These are typically pads (especially the gel type inserts) and usually just increase the cushioning to the shoes.  The provide no arch support and usually wearout quickly.  Although they may be more comfortable than the original shoe insert, they provide little or no longterm benefits to the way your feet function.

Arch Support -- Although these inserts can also be found from similar stores as shoe inserts, they typically will provide some increased support to your feet (as in the Dr Scholls Arch Support) and may even prevent pronation in some individuals.  These are typically designed for average foot types and have little or no benefit for the flat foot (pes planus) or high arched foot (pes cavus).  Some common brands include spenco and sofsole.

OTC Orthotic -- The next level will include arch supports that can be slightly modified for size and foot type. Among others, these include SuperFeet orthotics, Lynco orthotics, and GoodFeet orthotics if they are fitted to your foot by someone with knowledge of the product.  Again, these are not specifically designed for your feet, but do provide some support and may even modify your walking or standing patterns sufficiently to improve some foot and ankle complaints.  These are a relatively inexpensive alternative for many people that just need some additional support.  These also may not truly function with a flat foot or high arched foot, but much better than the alternative.

Heat Moldable Orthotics (Semi-Custom Orthotics) -- Although these are also off-the-shelf products, they can be modified by heating the product and adjusting them to your feet.  The start with a standard shell and can be modified to better fit your feet.  One type of product of this type is Sole Custom Footbeds, that have helped many people get the mild to moderate support to their feet without the cost of a custom product.  These still are limited in their functioning and will not last more than 6 - 12 months usually in an active individual.  Dr Gibson commonly uses this product in his running shoes and must replace the insole at least every 6 months.

Custom Orthotics -- This is a product that is designed specifically for the foot and can be either accomodative or functional.

A Accomodative Orthotic is a custom appliance designed for the patients foot that moderately modifies the functioning of the foot to more ideal function, but primarily serves as a comfort type appliance that will improve the comfort of a shoe while providing some improved support and improved function.  This is typically a softer appliance made from cork, leather, plastizote and other mildly forming materials.

A Functional Orthotic is a custom appliance designed to modify the functioning of your foot, by modification of your gait pattern.  They are designed from firmer materials such as polypropylene or fiberglass and could include some of the softer materials as top covers for comfort.  Although there are multiple variations on a custom orthotic, the goal is to produce a more ideal gait pattern and alleviate the stresses and abnormal motions that may produce pain.  This product or appliance should be considered as a more longterm solution that can alleviate pain and help you minimize injury.  The key to remember is although these cost more, you are getting significant benefit for the price.  This is not just a shoe insert or an arch support, but should optimize what you were born with.

Brandt R Gibson, DPM
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Podiatrist, Neuropathy Doctor, Father of 11 and Founder of Mountain West Foot & Ankle Institute