George DeVries remembers when complementary and alternative medicine wasnt quite as popular as it is today. DeVries co-founded American Specialty Health Plans in 1987 with only a few thousand dollars and a vision of what complementary health care could become. Thirteen years later, American Specialty Health Plans is the largest chiropractic and acupuncture health plan in the United States and the third largest specialty health plan in California, covering over 3.7 million Californians. An affiliate, American Specialty Health Networks, provides complementary health care programs and networks nationwide, covering over 20 million members. Revenues in the first year were $26,000, grew to $1 million in year five and were over $75 million in 1999, the companys twelfth year of operation. The firm employs over 400 people. The company began and operated in California for 12 years, offering primarily chiropractic services. Initially, the company only provided a small chiropractic network of 236 providers in Southern California, as well as limited administrative services. The companys first client was PacifiCare, covering 3,000 members through three employer groups.
NORWALK, Conn. — Theres an old tradition in standard medical circles of dismissing so-called alternative medicine as everything from witchcraft to nonsense. The move, the first by a major U.S. health-care company, suggests that the industry is giving some credence to consumer claims that certain kinds of alternative medicine work. In fact, many insurers already cover some types of alternative medicine, such as therapy by chiropractors — although few cover less conventional treatments like herbology, in which herbs are used to treat diseases. “Its really driven by consumer demand,” said Hassan Rifaat, manager of Oxfords alternative-medicine division. Analysts and industry executives say the market for alternative medicine amounts to billions, though the exact amount is up in the air. Norwalk, Conn.-based Oxford pegs the market at about $50 billion; others estimate a more conservative $18 billion to $20 billion. Today, most of that money is paid out of pocket by consumers. Yet, the size of the alternative-medicine market doesnt necessarily translate into a boost for the bottom line of health- care companies or insurers. For example, employers that subscribe to Oxford plans can sign up to provide coverage for alternative treatments by paying a 3 percent increase in premiums, the company said. Even if all Oxford customers added that coverage, it would represent only a small portion of the $1.73 billion in premiums that the company collected in 1995. “Its not an area with any real commercial significance,” said Paine Webber Inc. analyst David Lothson. That could change — or thats what alternative-care providers hope. HMOs now cover 60 million Americans, while another 80 million are covered through other forms of managed care and traditional medical insurance. “As more services are covered, the more alternative treatments people will try,” said Neal Heller, chairman and chief executive of Natural Health Trends Corp., which runs schools that train massage therapists and operates clinics that offer alternative-health treatments. Plenty of people are already convinced that alternative treatments work. The American Chiropractic Association reports that about 20 million people visit chiropractors each year, though only half of the nations HMOs cover those services. Oxford said its recent decision was based on member demand after a tremendous response to an article on the subject in its member magazine. The company, which provides coverage to about 1.4 million people in the eastern United States through its HMOs and other plans, isnt just limiting coverage to treatments now widely seen as effective, such as visits to chiropractors. Included in its new network of 1,000 alternative-medicine specialists are acupuncturists, naturopathic doctors, massage therapists, yoga instructors, clinical nutritionists and registered dietitians, along with a division to sell herbs and holistic devices. It said it also plans to add other services, like the Chinese martial art taichi. Some other health care companies, such as American Western Life Insurance Co. and Kaiser Permanente Health Plans, offer a limited range of alternative-medical services, but none have developed a full network and benefits plan comparable to Oxfords. “Mainstream HMOs and insurers are skeptical,” said Natural Healths Heller. Indeed, more Americans have taken a greater interest in their own health and preventive care, particularly as HMOs strive to cut costs by placing limits on certain types of treatments. “They feel as though modern medicine has failed them,” Heller said. While coverage of alternative treatments is on the rise, it will take several years before theres wide acceptance among benefit plans and insurers, analysts and executives said. When that happens, Heller said, his clinics will be ready.
The drama of mergers, acquisitions, downsizing, and the managed redirection of health care resources away from acute care hospitals and high-technology medicine has overshadowed another change in the contemporary health care culture (Duva, 1990; Edmonds Hallman, 1995; Gabel, 1997; Salmon, 1995). The purpose of this article is to discuss the growing interest in alternative health care and offer an explanation for this phenomenon. Alternative health care is not easily defined. Often it is explained by describing what it is not — the scientific practice of nursing or medicine as it has come to be understood in first world countries during this century. Physicians who are sympathetic to the movement say that alternative therapy encompasses a broad spectrum of practices and beliefs (Eisenberg et al., 1993), and reflects a holistic world view of health and illness that is outside the biomedical mainstream of medicine (Rauckhorst, 1997). Other writers compare and contrast traditional and alternative medicine as a way of defining its practice. Western medicine is specialized; alternative care is holistic. Scientific practice is evaluated by its outcomes and its coherence with protocols; alternative therapy is not in conformity with the standards of the medical community and is considered to be unorthodox. Little is known about its safety, efficacy, or effectiveness (Gevitz, 1988; Lohr, 1997; U.S. Congress, 1990). The science of medicine is taught and practiced in universities and hospitals; alternative care is not widely taught is U.S. medical or nursing schools and is generally unavailable in American hospitals (Eisenberg et al., 1993; Engebretson Wardell, 1993). Insurance companies and federal and state governments pay for traditional medical care. With few exceptions (acupuncture and chiropractic medicine), alternative therapy has not been included as a health benefit by health insurance companies (Eisenberg, 1997). Recently, however, Oxford Health Plans announced its intention to offer coverage for alternative health care and provided its enrollees with a list of providers and services (Oxford Launches, 1998). There is an elaborate certification and licensing system for health care providers and hospitals; the world of alternative therapy is unregulated and its practitioners are usually unlicensed and uncertified (Eisenberg, 1997).
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