bizjournaljune1998

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The Business Journal of Charlotte

PPO Targets Alternative Caregivers
Scott Smith Staff Writer
June 1, 1998

A veteran Charlotte insurance broker is getting ready to launch the region's first alternative medicine insurance program that will initially include 250 chiropractors, acupuncturists and naturopathic physicians.

Alternative HealthCare Options, a preferred provider organization organized by Richard Dunn, is targeting July 1 as a start date.

Alternative HealthCare already has commitments from two managed-care insurers and two third-party administrators that plan to contract with the upstart company for access to its provider network, Dunn says.

Managed care executives appear to be open to the idea.

"We have gotten some requests from employers and brokers for this very thing," says Joseph Moore, chief executive at Maxicare North Carolina Inc. "You're certainly seeing it in other parts of the country. It's something HMOs here may have to look at."

The PPO will also feature a drug formulary for natural remedies with a number of participating "natural pharmacies" that could include nutrition and herb outlets such as General Nutrition Center, Talley's Green Grocery, Berrybrook Farm Natural Food Pantry and Mooresville's VitaMart.

In addition to managed-care services, AHO will provide billing services for the area's alternative physicians.

Dunn plans to run the business out of a 1,000-square-foot office at Hedgemore Plaza off Park Road. He expects to have 10 employees to administer claims by year end, with plans to expand to 20 workers in a year.

Dunn expects see revenue of more than $1 million in the first fiscal year. Alternative physicians will be asked to pay a $ 1,000 fee to join the network.

The company is being modeled after a successful PPO in Portland, Ore., Complementary HealthCare Plans Inc., which in nine years has grown to 146,000 members.

AHO will be the Carolinas' first PPO to encompass all aspects of alternative medicine. Statesville-based Chiropractic Network of the Carolinas Inc., which does not include acupuncture or naturopathic specialists, consists of more than 200 chiropractors in both Carolinas. It claims to contract for more than 1.5 million lives.

Dunn is hopeful of following a wave of momentum here for alternative medicine that received a considerable boost in January when Presbyterian Healthcare opened its Center for Integrative Medicine. The clinic has been a big hit so far, says Presbyterian spokeswoman Stacey Brown, and already has a three-month waiting list for acupuncture therapy.

"The demand has been really great," Brown says. "The patients we're getting aren't really the kind of people you think of when you think of alternative medicine. We've mostly been getting people who are looking to complement their traditional health care."

Vickie Johnson, the Presbyterian clinic's administrator, says at least 90% of the patients seen so far have requested acupuncture treatment.

"It has surprised us," Johnson says. "We didn't expect the demand for acupuncture to be this high from the beginning."

Dunn has targeted 130 acupuncturists in North Carolina and almost 100 in South Carolina to recruit.

The Landmark Report on Alternative Care estimates that close to $20 billion is spent on alternative medicine per year in the United States. The same survey found that 58% of U.S. HMOs plan to offer alternative care therapies to their members by 2000.

The Natural Choice in Healthcare ™

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