Alternative Medicine:Expanding the Benefits Menu
Consumers are a key force prompting change in the U.S. healthcare system, and as patients’ preferences for treatment change, so may employer-sponsored benefits. Many patients now choose complementary and alternative medicine (CAM), pay fees out of pocket, and hope employers’ plans will reimburse them. Between 1990 and 1997, visits to alternative medicine practitioners increased about 47%, from 427 million to 629 million, surpassing total visits to primary care physicians, Harvard Medical School researchers report. They also found that about 60% of patients cover their own CAM expenses. What’s more, a Consumer Reports study indicates that nearly 35% of North Americans have used some form of alternative medicine in the past two years. CAM modalities include treatments such as chiropractic care, acupuncture, massage, relaxation, nutritional and herbal therapies, homeopathy, stress management, Tai Chi and biofeedback, among others.
What was once the road less traveled among treatment options has also garnered higher levels of participation from health plans, hospitals and physicians. About two thirds of HMOs surveyed from a group representing about 17% of the U.S. market reported offering at least one form of alternative care, according to a 1998/1999 Landmark Healthcare study. Blue Cross/Blue Shield offers Alt Med Blue, linking members with alternative care providers offering discounts, and the insurer recently launched Vita Blue, a mail-order program offering discounts on over-the-counter vitamins. More hospitals are addressing consumers’ demands for alternative medicine, and facilities are beginning to view alternative medicine as an additional source of profit, according to Deloitte & Touche and Modern Health. PricewaterhouseCoopers also notes that 27% of the nation’s medical schools, including Harvard, Yale and Johns Hopkins, now include alternative medicine coursework.
Most employer-sponsored health plans, however, may not be keeping pace with the change. Only 13% of workers reported CAM treatments were covered under employers’ plans, according to a 1999 survey of 382 U.S. and Canadian firms by the International Society of Certified Employee Benefit Specialists (ISCEBS); the same survey reported about 20% of surveyed employers currently offered CAM coverage, but about two thirds said they may offer such coverage or provide discounts in the future.
On the other hand, some companies have expanded benefits to include CAM, a move that may give them some advantage in attracting and keeping the best workers in a tight labor market. Not only that, but experts note that offering CAM benefits could help cut overall health costs by providing treatment solutions to health problems that have not responded to conventional treatment, assisting those suffering from chronic illnesses. About 27% of firms adding such benefits report that they did so in response to worker demand, the American Compensation Association (ACA) (now WorldatWork) reports. Nearly half of U.S. and Canadian companies surveyed offer chiropractic care, according to the ACA survey, and acupuncture -- regarded by the National Institutes of Health as an acceptable alternative to medication for chronic pain treatment since 1997 -- now ranks second. About 21% of responding firms cover acupuncture, up four percentage points from the previous year, according to a 1999 William M. Mercer poll of more than 3,000 companies.
Some firms, such as Toshiba American Medical Systems (TAMS) and PacifiCare Health Systems, provide access to both CAM and Employee Assistance Program information through the same 800 line. TAMS offers workers 70% coinsurance with a $500 per-modality limit, while PacifiCare provides free referrals, discounted services and a $250 annual Personal Choices Account, which may be used to cover CAM services. Other firms offer CAM benefits as a component of indemnity or PPO plans or provide a CAM rider on managed care.
So what are the costs and rewards? Per-worker monthly expenses of such benefits range from $1 for a basic plan and $10 for limited treatment services to $20 for more comprehensive coverage, varying according to plan design, location, workforce demographics, communication efforts and provider networks, say employee benefit specialists Janice Stanger and Brian Coughlan. Measuring payback could be complex, but CAM benefits may improve productivity, reduce prescription drug and conventional medical treatment utilization, and lower turnover and absenteeism rates.
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The National Center for Complementary & Alternative Medicine sponsors the Web site nccam.nih.gov, offering more information about CAM modalities, including an information clearinghouse.
WorldatWork, formerly the American Compensation Association, provides more information about the “Complementary and Alternative Medicine Survey” at
www.worldatwork.org/Content/Infocentral/info-research- frame.html.
The full text of “The Landmark Report II on HMOs and Alternative Care” is available at
www.landmarkhealthcare.com/99tlrII.htm.
More information about the Deloitte & Touche study is available online at
www.dttus.com/us/news/00June/health.htm.
The ISCEBS study “Health Benefits for Alternative Medicine” is available online at
www.ifebp.org/recen99a.html#top.
What was once the road less traveled among treatment options has also garnered higher levels of participation from health plans, hospitals and physicians. About two thirds of HMOs surveyed from a group representing about 17% of the U.S. market reported offering at least one form of alternative care, according to a 1998/1999 Landmark Healthcare study. Blue Cross/Blue Shield offers Alt Med Blue, linking members with alternative care providers offering discounts, and the insurer recently launched Vita Blue, a mail-order program offering discounts on over-the-counter vitamins. More hospitals are addressing consumers’ demands for alternative medicine, and facilities are beginning to view alternative medicine as an additional source of profit, according to Deloitte & Touche and Modern Health. PricewaterhouseCoopers also notes that 27% of the nation’s medical schools, including Harvard, Yale and Johns Hopkins, now include alternative medicine coursework.
Most employer-sponsored health plans, however, may not be keeping pace with the change. Only 13% of workers reported CAM treatments were covered under employers’ plans, according to a 1999 survey of 382 U.S. and Canadian firms by the International Society of Certified Employee Benefit Specialists (ISCEBS); the same survey reported about 20% of surveyed employers currently offered CAM coverage, but about two thirds said they may offer such coverage or provide discounts in the future.
On the other hand, some companies have expanded benefits to include CAM, a move that may give them some advantage in attracting and keeping the best workers in a tight labor market. Not only that, but experts note that offering CAM benefits could help cut overall health costs by providing treatment solutions to health problems that have not responded to conventional treatment, assisting those suffering from chronic illnesses. About 27% of firms adding such benefits report that they did so in response to worker demand, the American Compensation Association (ACA) (now WorldatWork) reports. Nearly half of U.S. and Canadian companies surveyed offer chiropractic care, according to the ACA survey, and acupuncture -- regarded by the National Institutes of Health as an acceptable alternative to medication for chronic pain treatment since 1997 -- now ranks second. About 21% of responding firms cover acupuncture, up four percentage points from the previous year, according to a 1999 William M. Mercer poll of more than 3,000 companies.
Some firms, such as Toshiba American Medical Systems (TAMS) and PacifiCare Health Systems, provide access to both CAM and Employee Assistance Program information through the same 800 line. TAMS offers workers 70% coinsurance with a $500 per-modality limit, while PacifiCare provides free referrals, discounted services and a $250 annual Personal Choices Account, which may be used to cover CAM services. Other firms offer CAM benefits as a component of indemnity or PPO plans or provide a CAM rider on managed care.
So what are the costs and rewards? Per-worker monthly expenses of such benefits range from $1 for a basic plan and $10 for limited treatment services to $20 for more comprehensive coverage, varying according to plan design, location, workforce demographics, communication efforts and provider networks, say employee benefit specialists Janice Stanger and Brian Coughlan. Measuring payback could be complex, but CAM benefits may improve productivity, reduce prescription drug and conventional medical treatment utilization, and lower turnover and absenteeism rates.
====================================================
The National Center for Complementary & Alternative Medicine sponsors the Web site nccam.nih.gov, offering more information about CAM modalities, including an information clearinghouse.
WorldatWork, formerly the American Compensation Association, provides more information about the “Complementary and Alternative Medicine Survey” at
www.worldatwork.org/Content/Infocentral/info-research- frame.html.
The full text of “The Landmark Report II on HMOs and Alternative Care” is available at
www.landmarkhealthcare.com/99tlrII.htm.
More information about the Deloitte & Touche study is available online at
www.dttus.com/us/news/00June/health.htm.
The ISCEBS study “Health Benefits for Alternative Medicine” is available online at
www.ifebp.org/recen99a.html#top.