Banking on Alternative Benefits

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The Charlotte Observer

Banking on Alternative Benefits
BY SEAN JAMESON Staff Writer
January 15, 1999

Richard Dunn sees a future where therapeutic and acupuncture are medical benefits offered alongside coverage for prescription drugs and surgery

Farfetched? Oxford Health Plans, a respected health maintenance organization in the New York metro area, offers coverage for acupuncture and yoga therapy. The Hawaii Medical Service Association, that state's biggest health insurer, announced in December it would begin covering a similar package of alternative services. Blue Shield of California offers its members discounts on alternative-medicine services. Blue Cross and Blue Shield of Georgia announced in October it will do the same.

Dunn is betting that the time is right to make such benefits available in the Carolinas.

In late 1997, Dunn began putting together a Charlotte-based company, Alternative Healthcare Options, to provide alternative-medicine insurance coverage.

Since then, the Journal of the American Medical Association and nine sister publications each has produced an issue devoted to alternative medicine. JAMA reported that 42 percent of Americans surveyed had used an alternative treatment in the last year.

Also last year, Physicians Desk Reference, the definitive source for information on prescription drugs, published a new volume on herbal remedies like those found in health-food stores.

"We're not stating that alternative medicine is the magic bullet, but it is a viable alternative to prescription drugs and surgery," said Dunn, who formerly was a health-insurance broker.

As he's built Alternative Healthcare. he's been able to tap family expertise for advice. His father, Dick Dunn, is the retired chief executive of Charlotte's Atlantic Health Plans. a health maintenance organization. The elder Dunn founded Charlotte based Health Care Savings in the mid-1980s, which grew into one the area's largest preferred provider organizations. Both of Richard Dunn's brothers also work in the managed-care industry
Richard Dunn spent last year enlisting N.C. chiropractors, acupuncturists. naturopaths and massage therapists, most of them in cities from Wilmington to Asheville. Those professionals agreed to treat Alternative Healthcare customers at a discount. Dunn plans to add providers in South Carolina this year.

Alternative Healthcare's first product is scheduled to go on sale Feb. 1. The company will sell a $49.95 discount card that will entitle buyers to discounts. typically 20 percent, on services such as acupuncture and chiropractic from its network of providers. The card will be good for discounts on herbal remedies as well.

Alternative Healthcare also will sell the cards to employers who want to offer their employees a limited alternative- medicine benefit.

What Dunn doesn't have yet is the first customer for his insurance plan, but he's talking up the idea with insurance brokers.

Dunn is ready. The alternative medicine providers are ready, But are Carolinas employers ready?

Eric Coates, a Charlotte consultant who advises mid-size and large employers on their healthcare benefits, is a skeptic.

"I'm not seeing any clear interest in it from our clientele," Coates said. "If I were asked by a client if it was something I'd recommend, I'd want them to be fully informed on what the cost implications were initially, and the cost implications were he road."

Dunn said his service, when offered with a traditional health insurance package, would add about 3 percent to 4 percent to the premium. And he points to studies that indicate people who use alternative medicine spend less on traditional medicine.

John Weeks. who publishes a monthly alter native-medicine newsletter called "The Integrator," agrees that not all employers will embrace the coverage at first.

"Run-of-the-mill purchasers are going to be wary of adding additional costs for what they believe to be a benefit of unproved value," said Weeks, who is based in Seattle. But he points to insurers from coast to coast who are adding these benefits and employers who are buying the services in the face of employee demand.

The pioneers, Weeks said, are likely to be decision-makers with positive personal experiences with alternative medicine.

Alternative-medicine benefits are not unheard of in North Carolina. Blue Cross and Blue Shield of North Carolina. the state's biggest health insurer, covers chiropractic care, bio-feedback hypnosis and massage therapy under certain circumstances, a spokeswoman said. The company is studying whether to expand its alternative- medicine coverage.

Alternative Healthcare's services will be available in several formats:

As a rider alongside traditional health Insurance, like the vision-care and dental benefits offered by some employers.

As an integrated benefit within traditional health plans.

As the discount-card program that begins Feb. 1.

Alternative also will offer workers compensation coverage.

Before he has his first customer Dunn is looking to expand. He's talking with alternative medicine networks In Georgia and Louisiana about an alliance that would offer services throughout the Southeast.

"This is not going to be a local ... network." he said.

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