Former nurse Michael Schor thinks he knows how to harness skyrocketing health-care costs for employers. As chairman of the Cost Effective Interest Group of the Collaboration for Healthcare Renewal in Newton, Massachusetts, Schor has come to value complementary and alternative medicine as a cheaper and more effective way of treating many illnesses and injuries than traditional medicine. He says that health services like acupuncture, massage therapy and chiropractic can be integrated into the conventional health system. "As employers see costs going up, they become more eager to look at alternatives and options," Schor says. "When the old solutions don’t work, you look for new solutions."
The argument for integrating alternative health services into the mainstream is that they will reduce escalating costs by providing cheaper services with better results. Alternative-health experts say massage therapy is often better than anti-inflammatory pills for sore back muscles, for example, and is less costly than back surgery for pain relief. Yet it is unclear whether alternative-health services can truly reduce costs because research organizations have not conducted large-sample surveys on the topic, health experts say. Still, employers are beginning to offer unconventional health-care benefits to employees to meet a growing demand and a perceived enthusiasm.
In 1998, a landmark study published in the Journal of the American Medical Association showed that an estimated 4 in 10 Americans used at least one alternative therapy in 1997, as compared to only 3 in 10 in 1990. The study, published by David Eisenberg, M.D., a recognized authority on alternative medicine, prompted a wave of studies and the establishment of the National Center for Complementary and Alternative Medicine under the federal government’s National Institutes of Health. Eisenberg is director of the Division for Research and Education in Complementary and Alternative Therapies at the Osher Institute of Harvard Medical School. The agency conducts research on the safety and efficacy of unconventional medicine.
George DeVries, chairman, president and CEO of American Specialty Health in San Diego, says the lack of studies on the cost-savings of alternative medicine is "a huge problem" for employers and for society. His company sells alternative-health benefits such as chiropractic, acupuncture, massage therapy, dietetic counseling, naturopathy, health-club discounts and personal-trainer services to larger insurance companies and to companies directly. The firm currently has 9.4 million members. Among its clients are Blue Cross of California, Kaiser Permanente and PacificCare Health Systems Inc., also in California, and Cigna, headquartered in Philadelphia.
The main reason that employers buy benefits for complementary and alternative medicine is employee satisfaction, DeVries says. "Employers want to attract the very best employees that they can. Alternative health care is very popular around the Rocky Mountains and on the West and East Coasts. Chiropractic is very strong not only in these regions but also in the Midwest. What we are seeing is that the popularity of CAM is a growing interest across the country."
W.E. Aubuchon Co. Inc. of Westminster, Massachusetts, the parent of Aubuchon Hardware stores in the Northeast, began offering complementary benefits to employees last year, says benefits manager Sarah Arel. Through the Marino Center for Progressive Health, employees can take advantage of massage therapy, acupuncture and homeopathy services at one of three clinics in the greater Boston area. Aubuchon also offers "nutriceutical" benefits, which provide herbal remedies for health conditions, Arel says. The complementary services are offered separately from the conventional health-insurance plan, which additionally offers chiropractic services.
"If you look at the clinical evidence, you’ll find these alternatives are effective."
"We try to do all we can for our people," Arel says, adding that the complementary-benefits plan is up for review this spring and is in danger of being discontinued for underutilization. "I would not like to see us take it out because these could be great remedies for some conditions."
This emerging sentiment has led Schor and other alternative-medicine proponents to argue for more integration of unconventional health services within the health-care system. "The problem we have with the [conventional] style of care is that [conventional health providers] believe this is the only style that works," he says. "If you look at the clinical evidence, you’ll find these alternatives are effective."
Schor argues that poor lifestyle habits, aging baby boomers, expensive new technology and cavalier consumers who ignore cost are all contributing to spending hikes. Insurance coverage masks the enormous charges, he adds. "When I need cancer therapy, bypass surgery or a cholesterol-lowering medication, price is not part of the equation," he says. "The forces that mitigate other services are not as present in medicine because the patient is not paying [directly] for it."
But recently, employers have pushed more of the burden of rising health-care premiums onto workers. A 2003 survey of 3,000 employers conducted by Mercer Human Resource Consulting showed that the contribution that workers made toward one type of family health-insurance premium jumped from 53 to 58 percent that year. A similar coverage option rose slightly more. Monthly premiums for employer-sponsored health programs rose 13.9 percent overall between 2002 and 2003, according to the annual Kaiser Family Foundation survey. That was the highest increase since 1990 and the third consecutive year of double-digit increases. An average annual family premium cost $9,068.
DeVries, who was appointed in the late 1990s to the White House Commission on Complementary and Alternative Medicine Policy under President Clinton, is convinced that more funding for comparative research is needed to demonstrate the cost-effectiveness of alternative medicine. "I personally consider the No. 1 health-care crisis in the country to be the escalating cost of health care," he says. "We should be studying what is the most cost-effective package of health care we can be offering Americans."
The commission’s 29 recommendations were published in 2002, and included one that called for funding of research on the cost-effectiveness of complementary-- and alternative-- medicine programs. The report also recommended that federal agencies and employers "evaluate the possibility of covering benefits or adding health-benefit plans that incorporate safe and effective CAM interventions."
FedEx is focused on injury prevention for its 110,000-member workforce, and over the past five years, the company has begun paying for 20 percent of the cost of chiropractic medical treatments. Couriers and package sorters are required to lift up to 70 pounds without assistance and over 70 pounds with the aid of equipment, says Sally Davenport, company spokeswoman. "People who have physical jobs…are required to do 10 to 15 minutes of stretching exercise to limber up," she says. Davenport says that rising costs are "of concern to us," noting that the company’s cost of prescription drugs alone increased by 25 percent between 2000 and 2001.
A recent study by the Centers for Medicare and Medicaid Services reports that prescription-drug spending is expected to increase the fastest of all health sectors, which include hospital, Medicare, Medicaid, out-of-pocket and physician spending. The 2003 evaluation is expected to show that spending on prescription drugs rose by 13.4 percent. The jump for 2004 is projected to be 12.9 percent, and another 12.4 percent is predicted for 2005.
Beyond just those cost issues, many proponents of complementary and alternative medicine believe the real savings lie in health and lifestyle habits. Schor encourages businesses to create a corporate culture that provides resources that employees can draw on for education and information. "Every organization has a culture of some sort, and you can decide what that culture is going to be," he says. "You should be able to make sure the employees understand that there are resources available to improve their lifestyles."
There’s no simple solution to cost escalation, Schor adds. It requires an expansive approach and a willingness by employers to be informed. "If you’re an employer, you first need to educate yourself, and that means demanding much more of your advisers, be they insurers or brokers, and the health plans," he says. "Then you need to look at your workforce in the same way you look at your capital equipment. It’s an asset. But it’s an asset you’re only going to have if you take care of it. If you don’t, it’s going to be very expensive."
Workforce Management, May 2004, pp. 73-75 -- Subscribe Now!