Alternative Health Coverage Shows Sticking Power

Earlier this year, an article in The New York Times concluded that the more than $27 billion U.S. residents spend annually on alternative and complementary medicine provides the most telling evidence of Americans’ desire for nontraditional health care.

How does this desire for nontraditional care impact employers, and why should employers care? Americans’ growing love affair with nontraditional medicine presents a golden opportunity for brokers and employers to think outside the box when it comes to health benefits.

Here are 7 reasons why employers and their benefits advisors should be thinking alternatively when it comes to health benefits.

1. Growing Employee Demand

An estimated 48% of U.S. adults used at least one alternative or complementary treatment in 2004, compared with 42% in 1994. A key reason behind the growing demand for nontraditional care is the desire for novel approaches.

Baby boomers have been trendsetters for the past 5 decades. Even as they reach their sunset years, they continue to be pioneers. They value the personalized and unhurried approach of many nontraditional providers, the providers’ resistance to recommending prescription drugs, and the potential for obtaining a holistic view of health issues and recommendations for “whole body” health improvement.

2. State Coverage Mandates

Over the past decade, demand for alternative care has been so strong that some states are increasingly mandating that insurers cover some form of alternative services.

Today, for example, more than 40 states require that chiropractic care be covered, while 8 states require that some form of alternative medicine (such as acupuncture, naturopathy or massage therapy) be covered.

As these mandates expand further, and with specialty insurers grabbing a greater share of the customer market, traditional insurers are expanding their complementary coverage offerings, facilitating access for more employer groups.

3. Research Results

Today’s growing allegiance to alternative care is not being adopted just on blind faith. Increasingly, research trials and rigorous studies are proving there is validity in claims about the benefits of complementary care.

Most recently, for example, a landmark study published in the Annals of Internal Medicine demonstrated that acupuncture not only provides pain relief, but also improves function for people suffering with osteoarthritis of the knee.

Another study, released by researchers at Duke University Medical Center, found that acupuncture was more effective than the medicine Ondansetron for reducing nausea and vomiting after major breast surgery.

Still other studies have shown marked improvement in patients treating back pain with Yoga and reducing stress with massage therapy.

As organizations such as the National Center for Complementary and Alternative Medicine, a federal agency formed in 1998, continue to fund more clinical trials, CAM usage is expected to soar.

4. Rising Medical Utilization Costs

Employees typically turn to alternative health care when traditional medical care has not worked or the traditional treatment is not considered acceptable because of cost or potential side effects.

Studies show that employee migration to “high touch,” low-cost therapies such as chiropractic or massage therapy can significantly reduce an employer’s overall medical costs by eliminating or reducing high-tech, surgical and pharmacological treatments.

For example, a study published in the October 2004 issue of the Archives of Internal Medicine concluded that employees with chiropractic health plan coverage, as compared to those without, incurred a 41% reduction in hospitalizations for back pain, a 32% reduction in back surgeries, a 37% reduction in the use of costly CT and MRI scans for back problems, and a 23% reduction in the use of X-rays. Overall, the cost per episode of treating back pain was 28% less for employees with chiropractic health plan coverage than for those without chiropractic coverage.