The Alt Med Doctor 
Will See You Now

Insurers See a Profitable New Market 
in Allowing Patients To Seek Medical Care 
from Alternative Providers

By Suzanne Fischer

It was the last ripe tomato that nearly broke her back.

After bending and squatting in her garden for hours, Terri Clawson, a Raleigh freelance editor, reached for the furthest vine when something snapped in her low back. “The pain was awful. I sunk to my knees,” Clawson recalls.

The backache, in addition to frequent migraines, drove Clawson to a chiropractor recommended by a friend. After several weeks of regular visits and then more occasional trips for “tune ups,” her back healed and she hasn't suffered from a killer headache since. Only one problem: Clawson's chiropractic coverage ran out before her pain did.

“Doesn't matter to me,” she says. “This has changed my life so much that I'm willing to pay for it out of pocket.”

She's not the only one. According to a study published in the Journal of the American Medical Association, in 1997 Americans spent $27 billion out of pocket on chiropractic and other nonconventional therapies. One out of every four of us uses some kind of alternative medicine, and we visited these practitioners 629 million times, a 47 percent increase since 1990. This figure far exceeds the number of visits made to all primary care physicians. See a lexicon of alternative medicine practices.

“Consumer demand is absolutely phenomenal,” says Richard Dunn, president and founder of Alternative Healthcare Options, a preferred provider network of alternative medicine practitioners.

And the numbers are predicted to go nowhere but up. The New England Journal of Medicine estimates that by 2010 the per capita supply of alternative medicine clinicians will grow by 88 percent, meeting the needs of an increasingly alt-med-friendly public. Also, the study iscareful to point out that the growth in the number of visits to nontraditional providers reflects an increase in the number of people turning to them, not to increased visits per patient.

“Bottom line, there is a huge amount of money involved in this, just tremendous,” says Paul Mahoney, president of the N.C. Association of Health Plans. “If some of that can get moved under the wings of the insurance companies somehow, there's a real opportunity.”

Health insurers are beginning to take note. In recent months several of the state's largest health plans have added a variety of alt med programs to their offerings.

Blue Cross Blue Shield of North Carolina, for example, was the first to announce such a plan, called Alt Med Blue. The program allows nearly 1 million BCBSNC customers across the state access to a wide range of alternative medicine and therapy services at a 25 percent discount and to participating personal trainers and fitness centers at a 15 percent discount. Services covered under the plan include acupuncture, stress management, massage therapy, somatic education, homeopathy, naturopathy and nutritional counseling. Clients don't need referrals from their primary care physician before visiting any alternative practitioners. Chiropractic care is a covered benefit and not included in the discount plan.

“Clearly, Blue Cross Blue Shield has been listening to the marketplace and to what our customers want,” says Susanne Powell, a spokesperson for the company. “Such a large number of people are using alternative medicine, and we wanted to come up with a way to meet that need. The discount plan is a way to give value without increasing premiums. It's very popular because it's the best of both worlds.”

The company contracts with Consensus Health, which builds networks of nontraditional care providers and screens all practitioners according standards that mirror those set for traditional physicians.

Probably to no one's surprise, Consensus is based in California, where alternative medicine has its strongest foothold in this country. North Carolina, however far from California geographically and spiritually, has proven to be no slouch in the alt med field either, says Cheryl Angel, marketing manager for Consensus.

“North Carolina has been one of the earlier states in the country to offer a program like this, and it's one of the most comprehensive at that,” she says. “Your state is really quite progressive and on the forefront of this movement.”

The medical schools of both Duke and UNC-Chapel Hill offer coursework in alternative medicine, placing them in league with nearly 65 percent of medical schools nationwide.

Durham-based WellPath, the first in the state to actually institute an alt med program, offers a similar discount arrangement. In early 1998, after talking to customers and conducting focus groups, company officials noted that alternative medicine surfaced repeatedly in discussions, says Cindy Scherer, director of public relations. “At that time there wasn't an alternative medicine network, but we heard that Alternative HealthCare Options was starting one.”

Launched by former insurance broker Richard Dunn, Charlotte-based AHO became the first multidisciplinary alternative PPO in the state. The company credentials providers, verifies certifications and licenses, talks to references and runs malpractice checks. In addition to providing service to WellPath, AHO also sells a $49.95 discount card that entitles buyers to reduced rates — typically 20 percent off of the usual price — to services like acupuncture and chiropractic from its network of providers. The card is also good for herbal remedies.

Dunn sees some basic trends among the three general types of health insurance providers. Health management organizations, like BCBSNC and WellPath, are “sticking their big toes into the waters of alternative medicine” through these discount programs.

Angel, of Consensus, agrees that HMOs might be looking at discount programs as a sort of trial balloon. “That's a good metaphor. They can offer this program and see what the response is. It induces people to try something they might not have tried before.”

Eventually, however, Dunn and others in the field hope that insurers treat nontraditional therapies as a covered benefit just like allopathic (traditional) medicine.

“When they integrate complementary alternative medicine with traditional medicine they'll net a double benefit,” Dunn predicts. “First they'll increase their market share and second they'll realize decreased healthcare costs because these services cost less, have few side effects, are less invasive and because people who use them tend to be more interested in preventive medicine.”

The discount program also gives insurers the chance to track data on frequency of use, success of the therapies, and customer satisfaction. Both Consensus and AHO track this kind of information as part of the service they provide to their respective customers.

Preferred provider networks (PPOs) likely will be the last to venture into alternative medicine, Dunn suspects. “They just aren't recognizing the magnitude of this quite yet,” he says.

Then there are the self-insured companies, which essentially take on all the insurance risk by paying their own claims and hiring a third party administrator to manage the processing of claims.

“Self insurers are hitting alt med hard,” Dunn says. “Since they're their own insurance company, they're interested in treatments that are preventive, less expensive in the long run, and cost effective.” As of the first of this month, AHO has “a number” of self-insurers on line.

The employee benefits consulting group of AON Consulting also, in a sense, provides certain alt med discounts to its clients who maintain a health care spending account. Under this program, employees opt to deduct part of their pay pre-tax and use this money to reimburse themselves for certain medical expenses approved by the IRS but not covered by their health care plans. Among a long list of allowable expenses are acupuncture, chiropractic care and psychotherapy.

Partners National Health Plans of North Carolina is one of the most recent insurers to step into the alt med arena. In addition to a toll-free telephone number that subscribers can call for information about complementary disciplines, Partners plans to roll out a discount program of its own in January 2000. Vice President Stuart Veach feels the time is right: “Interest from the marketplace has been very strong, and we think these sort of services fit in well. The key word is `complementary.' These are things used in conjunction with traditional medicine.”

Still, plenty of people need more convincing before they jump on the alternative medicine bandwagon.

Phil Soucheray, manager of media relations for United Healthcare, says his company recognizes the popularity of alt med but wants to make sure the demand can be satisfied by treatments with science-based evidence.

“It's important to us that the FDA acknowledge that these therapies are valuable and useful means of treatment,” he says. The federal government, for instance, has indicated that chiropractic and acupuncture offer relief of some specific problems like low back pain and are also successful for general pain management. With the Fed's vote of confidence, United Healthcare decided to offer chiropractic and acupuncture as riders to their plans. Some of the other more alternative therapies, however, demand further study. “There is a definite snake oil issue that needs to be addressed and monitored,” Soucheray adds.

Some also wonder just how beneficial a discount program will be in the face of rising premiums. Brian Lemoine, who heads up a health and welfare consulting practice for Deloitte and Touche, says the discount programs are “admirable and an interesting marketing tool,” but posits that clients might be able to find the same services for less money with practitioners who aren't on the plan.

“I think this is a goodwill gesture. The perception is that it's a benefit, but it's not a big step,” he says. “It's not going to be of any real substance until employers start taking on a significant cost of these therapies. And I don't see that happening in the near future.”

Neither does Dr. Peter Curtis, a professor at UNC-Chapel Hill in the Department of Family Medicine, who also teaches a course on complementary and alternative medicine.

“Alternative medicine is a more patient-centered approach than is allopathic medicine. You have to spend lots and lots of time with a patient,” Curtis explains, “I don't understand how HMOs — which are increasingly pressuring doctors to be quick and productive and see lots of patients — are going to be satisfied with doctors who only see one patient an hour.”

Proponents of the discount plans, however, argue that a small step is still a step in the right direction. Also, they say, by bringing alt med —however small a part of it — under the umbrella of the health plan, clients can be assured of the quality of care they're receiving since insurers assume the responsibility of credentialing practitioners.

Mahoney, of the N.C. Association of Health Plans, says that many of the organization's members are cautiously considering adding alt med into their plans, but that they still have a lot of unanswered questions: How do you check the credentials of some of the more unusual specialists? What exactly does “alternative” mean and what's the purpose of some of these treatments?

“There's some disagreement, depending on who you talk to, about what some of these therapies are supposed to accomplish,” Mahoney says. Although chiropractic medicine, for instance, is widely accepted to be an effective treatment of back and neck troubles, many chiropractors promote their treatment as useful in a whole host of conditions from infectious diseases to immune therapy. Meditation's ability to reduce stress is rarely questioned, but by some advocates it's also touted as a way to increase intelligence and longevity.

Another important issue is whether the alternative treatments turn out to be substitutes for some visits to traditional doctors or simply additional treatments. Obviously, the answer to that question holds huge cost implications for health plans: if additive, alt med could be an additional expense instead of a cost savings.

Finally, NCAHP members want more feedback about what the employer community thinks of alternative medicine. On that, however, it's safe to say that the jury's still out.

“I think a lot of companies don't know enough about alternative medicine yet,” says Jean Racz, manager of human resources at BuildNet, an RTP company that develops software and e-commerce for homebuilders. “The [Alt Med Blue] program is still so new that it's hard to get a read on how popular it is, at least at this company. I think it's great that they're offering it, though. When I first heard about it I thought, `Oh, cool.'”

R.L. Forrester, an independent agent who handles all major health carriers, says his presentations about alternative medicine coverage are greeted with enthusiasm. “Alt Med Blue doesn't affect premiums and employees seem to like it. It's like subscribers are being rewarded with a little something extra.”

That little something extra might also serve as a recruiting tool in a tight labor market, Mahoney suggests. And according to a Stanford University study, while people of all ages, races and income levels use alternative health care, one factor that stood out was education. Those with higher levels of schooling were more likely to try nonconventional therapies than were those with less education.

Even with the advent of alternative care, traditional docs have little to fear: a survey by Landmark Healthcare shows that only 15 percent of those that use alternative care do so as a total replacement for traditional medicine.

“Our focus, and I suspect this is true of most alternative healthcare folks, is not to do away with traditional healthcare,” says Angel, of Consensus. “Far from it. We just want to build a bridge between the two to help people become more healthy.”

COPYRIGHTED MATERIAL. This article was first published in the November 1999 issue of North Carolina Magazine.