Improving Health Care with

Complementary and Alternative Medical Coverage under

Improved Health Insurance

Suzanne Natbony

Loyola Law School

Health Law

Final Paper

Prof. Brietta Clark

December 4, 2007

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I. Introduction

There are many different types of health care plans available to Americans. Choosing

one that works best is an important decision affecting families, employers and employees.

Preventive medicine, meaning the initial care taken to prevent disease and health problems, is

gaining an increase in recognition because of the importance and effectiveness of complementary

and alternative medicine (CAM).1 CAM is defined as “a group of diverse medical and health

care systems, practices and products that are not presently considered to be part of conventional

medicine” and includes “alternative medical systems, mind-body interventions, biologically

based therapies, manipulative and body-based methods and energy therapies.”2 The

complementary “refers to treatments used with conventional medicine” and alternative refers to

“those used in place of conventional medicine.”3

For example, there has been significant growth in the areas of acupuncture and

chiropractic care, two of many complementary medicine modalities that are considered

alternative, noninvasive therapies because they do not include surgery and drugs, but instead

focus on holistic healing. Complementary and Alternative Medicine (CAM) “has developed into

a billion dollar market enterprise.”4 According to the New England Journal of Medicine, “34

percent of adults in this country visited an alternative health care provider in 1990” and, on the

west coast, the number is “around 40 percent.”5 Yet, most Americans are still stuck paying for

1 MedicineNet.com Definition of Preventive Medicine.

<http://www.medterms.com/script/main/art.asp?articlekey=5039> (accessed on Nov. 11, 2007) 2 Vlasis, Robert T. The Doctor is Out, or Unconventional Methods for Healing: Resolving the Standard of Care for

an Alternative Medicine Practitioner. The Booker Project: The Future of Federal Sentencing. Criminal Justice

Institute Symposium. 43 Hous. L. Rev. 495, 496 (2006) 3 Boozang, Kathleen M. et al. Potential Pitfalls in Providing CAM and Innovative Therapies. American Health

Lawyers Association Annual Meeting. (2007) 4 Vlasis, supra note 2 at 496. 5 Oser, Marie. A New Age in Health. Ventura County Star. (November 10, 1997)

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these services because most health insurance does not cover most alternative therapies.6

However, “numerous employer health plans have begun to offer coverage for certain CAM

services, although the prevalence of this coverage is still relatively low in comparison to

coverage of conventional therapies.”7 A survey found that health insurance coverage of CAM

“has been increasing” because chiropractic coverage rose from 49% covered in 1998 to 70% in

2000 and acupuncture rose from 12 to 17% during the same time period.8

The current health insurance system is derived from an employer driven mandate to

reduce costs in a void created by governmental inaction.9 Without universal health insurance,

managed care plans attempted to take over the role of health care administration with employers,

as the largest purchasers, determining resource allocation.10 While such a market driven

approach has been effective in increasing economic efficiency, it has done so at the price of

reduced choices of care. The reduction of choices has adversely affected preventive and CAM

patient care even though financial analyses show no adverse effect upon those health insurance

carriers and plans that do provide for a modicum of such choices. Accordingly, United States

government action is required to balance the drive toward short term cost reduction with the need

for long term effectiveness that can be delivered through preventive and alternative health

choices.

This analysis is predicated on the now widely accepted proposition, supported by

citations throughout this paper, that preventive health care has proven itself valuable in avoiding

illness and disease and CAM has also proven itself valuable in treating various ailments and

6 Oser, supra note 5. 7 Boozang, supra note 3. 8 Boozang, supra note 3. 9 Peterson, Mark A. Health Care into the Next Century: Markets, States, and Communities.

Journal of Health Politics Policy and Law. (April 1997) 10 Northern California Neurosurgery Medical Group, Inc. The History of Health Insurance in the United States.

http://www.lieberson.com/en/medical_history_and_ethics/history/history_of_health_insurance.htm (Last modified:

08/31/07)

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illnesses. While conventional medicine is helpful for many ailments, some of them are better

approached holistically through CAM. Therefore, CAM should be covered by health insurance.

This paper will review the status and philosophy of the mainstream American health

insurance industry as it is presently constituted and analyze its failure to adequately provide for

coverage for preventive and alternative care. It will then discuss the more progressive legislation

that has begun to address the problem. It will also present current methodology for evaluating

the transparency and economic efficiency of various current health insurance plans.

Furthermore, this paper will argue, evaluate and determine if coverage for preventive and/or

alternative health care has any adverse effect upon the insurers offering such coverage and will

provide information to assist Americans in making a decision about health insurance. Finally, it

will present an introduction to the best health insurance plans that improve both the American

economy and livelihood with a minimal upheaval to the current system through measured

government action.

II. American healthcare philosophy and legislation

Since 1994, “claims long associated with distinct American public philosophy:

‘universal coverage,’ a ‘right’ to health care, the ‘moral’ imperative of granting everyone real

access to medical care as part of the commitment to equal opportunity” have influenced the

policy makers to attempt to fix the problems of rising health care costs combined with

inadequate and incomplete coverage.11 This has given rise to an attempt by policymakers to

improve healthcare through the development of the two most dominant health insurance plans –

Preferred Provider Organizations, (PPOs) and Health Maintenance Organization, (HMOs) –

discussed below. However, patients’ “rights to access healthcare” are only somewhat served

through these plans. Furthermore, Medicare and Medicaid, which are government sponsored

11 Peterson, supra note 9.

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healthcare plans, are also an option. Sometimes the decision of whether to choose a government

or nongovernmental plan can be like choosing between the lesser of two evils.

The U.S. is constantly trying to improve the healthcare for its citizens. Health care

insurance model proposals are submitted through Congress and venture capitalist groups

strategize for a winning healthcare insurance model that works. There are two possible models

that these groups might use. One is “the consumer sovereignty (or informed choice) model” in

which “informed, prudent, and imaginative consumers choose from several diverse alternative

health insurance plans according to their own values and preferences.”12 The second is called the

“citizen involvement in rationing model” because it involves more of a “participatory

conception,” in which “rationing decisions *** reflect the values and preferences of a population

or community, and the only way to incorporate those preferences and values is to involve those

affected by decisions in the decision-making process.”13 If either model is adopted, members of

society play a larger role in choosing and determining their health insurance. The reports have

indicated that a growing populace is choosing CAM, so it would seem better for people to be

able to choose their health insurance coverage.

The crossover between CAM and preventive medicine and improving healthcare is clear

as demonstrated by following study: The New York Academy of Life Sciences published a study

showing that a daily dose of Vitamin C or E reduced the “risk of cataracts in a given population”

by one-third.14 If a patient gets a cataract, health insurance expenditures increase. So, if the

cataracts can be prevented, the health insurance company and the patient will benefit in many

ways, including saving money. If time and money is not being wasted with diseases that are

12 Goold, Susan J. et al. Choosing Healthplans All Together: A Deliberative Exercise for Allocating Limited Health

Care Resources. 30 J. Health Pol. Pol'y & L. 563, 564 (2005) 13 Goold, supra note 12. 14 Mickelson, supra note 14, at 126

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preventable, then physicians and practitioners can spend their time researching and treating

unpreventable diseases and infirmities. Perhaps, there would be cures for diseases that cannot be

prevented, such as “Alzheimer disease, a variety of cancers, heart disease, and arthritis” if

physicians could focus their attention on treating and curing those diseases, rather than those that

people self-inflict.15

Most conventional physicians do not tell their patients to take Vitamin C or E. However,

CAM practitioners do promote vitamin supplementation because they are more focused on

maintaining and improving health and not merely treating disease. More importantly, if a health

insurance company “covers a therapy, it signals to the market that it has ‘a potential health

benefit, that it is medically appropriate in the circumstances for which it is covered, and that it is

medically necessary.’”16 The World Health Organization defines health as the “complete

physical, mental, and social well-being, not merely the absence of disease or infirmity.17 CAM

therapies focus on health, while traditional, Western medicine focuses on treating disease and

infirmity.18

The barrier that arises between an individual receiving his or her chosen health insurance

is that “intermediary purchasers,” which include employers and governments, are the main

choosers in our current system.19 Citizens should get involved because of the apprehensiveness

of the government and employers to support CAM through devising and purchasing health

insurance that covers CAM therapies.

15 Assessing Genetic Risks: Implications for Health and Social Policy.

Institute of Medicine. http://books.nap.edu/openbook.php?record_id=2057&page=1 (1994) 16 Boozang, supra note 3. 17 Mickelson, supra note 14. 18 Boozang, supra note 3. 19 Boozang, supra note 3.

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Whether or not a health insurance plan chooses to include coverage for treatments has to

do with whether or not a treatment is considered medically necessary much of the time. Medical

necessity is defined as services which are provided for and are necessary to the “diagnosis,

treatment, cure or relief” of a health problem; it must not be experimental or cosmetic and it

“must within the generally accepted standards of the medical community.”20 This standard

hinders the use of CAM therapies by physicians and practitioners. Once a CAM treatment

becomes generally accepted, it is no longer CAM.21 If experimental is to mean a treatment that

lacks scientific evidence, then many CAM therapies could be ruled out this way.

Another problem is that “most health plans lack long-term experience in determining

which CAM interventions are appropriate in particular clinical situations and which are not.”22

Regardless, a health insurance plan could appoint researchers or a department to make the

determination based on research from the National Institute of Health, TOXNET or the Cochrane

Collaboration.23 California has made it a violation of the California Health and Safety Code to

prescribe a treatment for cancer other than chemotherapy, radiation or surgery.24 So, if a cancer

patient is told to use CAM to treat cancer, the patient can sue the practitioner. However,

sometimes CAM that have insufficient scientific evidence of efficacy are said to be helpful in

alleviating symptoms and improving health.25

Sometimes a patient will not utilize a CAM treatment because the patient’s health

insurance will not cover it. Indeed, a survey reported that “health insurance coverage was the

20 Boozang, supra note 3. 21 Boozang, supra note 3. 22 Boozang, supra note 3. 23 IS citations 24 Mickelson, supra note 14. 25 Id.

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strongest correlate of frequent visits to alternative practitioners.”26 While providing health care

to address consumers’ wishes is important for health insurance administration, it is more

important to provide care that is effective. Health care that is cost effective is also beneficial to

the majority of subscribers, but making that determination can be complicated.

Health Insurance coverage is often limited and even more often with CAM. Restrictions

include that only certain CAM services could be covered, including “ceilings on the number of

visits covered or restrictions on clinical applications.”27 CAM can be covered as a basic

supplement to the main policy where there are controls over the use of CAM or it can be a

discount program, i.e. the members “pay out-of-pocket, but are eligible for discounts.”28 Health

insurance companies can also require a preauthorization, a referral, capitation on costs and can

charge higher co-payments.29

III. Competing Health Insurance Plans

A. Preferred Provider Organizations:

PPOs, which are the plans of choice for 49% of Americans for health coverage according

to the Mercer National Survey of Employer-Sponsored Health Plans, are explained by the

Utilization Review Accreditation Commission, or URAC.30 URAC is “an independent,

nonprofit organization committed to promoting quality health care through accreditation,

certification and other quality improvement activities.”31 Plus, it is “the only national

organization that accredits complementary healthcare networks and systems.”32 Basically,

URAC reports that PPOs comprise “a network of healthcare providers who have agreed to

26 Wolsko PM, Eisenberg DM, Davis RB, et al. Insurance Coverage, Medical Conditions and Visits to Alternative

Practitioners. Archives of Internal Medicine 2002; 162: 281-287 (cited in Boozang, supra note 3.) 27 Boozang, supra note 3. 28 Boozang, supra note 3. 29 Boozang, supra note 3. 30 URAC.org. About Us. (2003-2007) 31 URAC.org, supra note 30. 32 American Specialty Health. Plans of California. www.americanspecialtyhp.com (2004)

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provide care to patients subject to contractually established reimbursement levels.”33 The Daily

News of Los Angeles reports that when selecting a health care provider, people should take into

consideration three factors of “cost, coverage and quality.”34 However, while PPOs offer a more

extensive network of in-plan providers including some complementary practitioners, they are

usually more expensive than HMOs. The wider selection of practitioners translates to less cost

savings for the subscriber.

PPOs are “more likely to offer CAM coverage than HMOs.”35 In 1962, the Wellness

Health Plan Provider Group became “the first natural and preventive medicine PPO network in

the country.”36 PPO networks that provide for CAM practitioners are important for several

reasons. First, the “lack of uniformity in the regulation, licensing, and established credentials of

the many” CAM practitioners can lead to a “buyer beware” situation.37 Second, the PPO, as a

third-party payer, would act as a gatekeeper in determining which practitioners would be

included and which services to provide.38 So, if a patient wants to see a CAM practitioner, it can

be helpful to choose one through the PPO network because unprofessional practitioners are

eradicated through the referral system. Third, only treatments that were “generally considered

effective” should be covered.39 Problems can arise when determining what is generally

considered effective. Again, resources such as National Institute of Health, TOXNET or the

Cochrane Collaboration should be consulted to determine efficacy.40

33 URAC.org, supra note 30. 34 Sullivan, Ben. Healthy Choices: It’s Time to Think About HMOs. The Daily News of Los Angeles. (September

29, 1997) 35 Boozang, supra note 3. 36 Mickelson, supra note 14, at 129 37 Id. 38 Id. 39 Id. 40 http://toxnet.nlm.nih.gov/.

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Health Maintenance Organizations:

The most widely used Californian health coverage is from HMOs. HMOs are “a kind of

health insurance in which you must get your services from the doctors, labs and hospitals that

have contracts with the HMO or work for it.”41 Because someone “usually [has to] have a

primary care doctor who provides most of [someone’s] care,” who must also manage the

patient’s treatment plan, it often becomes difficult for the patient to obtain a referral for a CAM

practitioner.42 Conventional doctors generally are reluctant to refer a patient outside of the

Western “network,” whether or not the practitioner is within the health plan’s list of covered

practitioners. Furthermore, most people do not visit a primary care physician when they are

healthy. People should not have to visit a conventional primary care physician, if the physician

is unfamiliar with CAM, to begin implementing preventive health choices. As discussed below,

naturopathic doctors could be the initial referral source for CAM practitioners, since they have

greater familiarity with preventive medicine.

Indeed, “HMOs and other managed care organizations, and their providers, would be

well-advised to explore complementary/alternative modalities, not just for purposes of treating

illnesses or conditions in a less invasive and costly way, but to help their patients become and

stay healthy.”43 At least HMOs, in particular, have been reported to show “a keen interest in an

approach to medicine that is relatively cost-effective and also stresses prevention and healthy

lifestyles,” compared to other health insurance companies.”44 Perhaps that source was reported

by HMO marketing materials because it is incongruous with research asserting that HMOs “only

41 California’s HMO Guide. The Office of the Patient Advocate. The Regents of the University of California.

(2003) 42 California’s HMO Guide, supra note 41. 43 Mickelson, supra note 14, at 129. 44 Clark, Thomas R. Licensing Alternative Approaches to Medicine: The Naturopathic Doctors’ Act of 2003.

Review of Selected 2003 California Legislation. 35 McGeorge L. Rev. 387, 388 (2004).

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pay for services that are medically necessary.”45 While this does include “service[s] to treat or

prevent a health problem,” this only includes certain limited preventive services.46 For example,

screening tests are covered for cholesterol and osteoarthritis but lifestyle education or gym

memberships are not. Again, this restrictive health care access is problematic for Americans’

optimal health care.

Another problem with HMOs is the complications that arise when subscribers would like

to see a doctor, outside of the network. Since CAM practitioners are typically not included, the

patient cannot get reimbursement and thus does not visit them. Indeed, “[p]lans that seek to

draw bright line distinctions and incentives between non-network and network providers

frequently use the refusal of assignment as a means to discourage the use of non-network

providers and encourage the use of network providers.”47 The only good thing about this

strategy is that it helps to keep costs down.

However, an additional problem with HMOs is that they have allegedly failed in

attempting to help Americans cut rising health care costs.48 Indeed, Dr. Feinburg, a psychiatrist

at UCLA, explains: “patients were left out of the loop because insurers and doctors were

accountable only to employers.”49 Another major problem with HMOs, as enunciated by a

medical billing service employee, is that “[m]ost carriers, including Medicare, will deny payment

if treatment is perceived to be maintenance. The common denial phrase is, ‘Payment is made for

illness or injury only.’”50 Because health care should include preventing health problems,

45 California’s HMO Guide, supra note 41. 46 Id. 47 Lucas, Carol K. and Larry Foust. Health Plans Versus Non-Participating Providers. American Health Lawyers

Association Annual Meeting. (2007) 48 Davis, Phil. The Daily News of Los Angeles. 1. 2000. 49 Davis, supra note 48. 50 Rambaud, Charline. qtd. in Oser, supra note 5.

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payment should be available for charges incurred before the onset of disease and injury, i.e.

preventive CAM treatments should be covered by all types of health insurance companies.

Two types of CAM treatments that most HMOs do not cover are acupuncture and

chiropractic care. HMOs should cover these beneficial modalities because certain treatments

have been proven efficacious by various scientific studies, such as in the reduction of chronic

pain.51 However, if a patient sees a medical doctor for the “management of chronic pain,

insurance pays for medication, therapy and/or surgery, as long as the M.D. continues to manage

the treatment of the patient. This can cost tens of thousands of dollars.”52 In such cases, HMOs

are not only wasting Americans’ money, but they are also limiting the patients’ ability to see a

CAM practitioner.

B. Public Health Insurance

Under Medicare and Medicaid, the federal and state governments provides minimal

health insurance for basic services such as hospital stays, health clinic visits and physician and

nurse practitioner services, for those who qualify based on certain restrictions such as economic

and military status, age and disability.53 19% of the U.S. federal budget is allocated to Medicare

and Medicaid.54 Miniscule preventive medicine is covered (disease screenings)55 and virtually

no CAM (veteran chiropractic care).56

Medicare

51 The Cochrane Collaboration. Cochrane Reviews. http://www.cochrane.org/reviews/ 52 Oser, supra note 5. 53 Furrow, Barry R. et al. Health Law: Cases, Materials and Problems. 5th ED. 731. (2004). 54 Furrow, supra note 53. 55 Id.. 56 National Center for Complementary and Alternative Health Insurance. http://nccam.nih.gov/health/financial/.

(November 2006)

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Presently, 14% of the U.S. population is enrolled in Medicare and, by 2030, the number

is expected to increase to 22%.57 Covered services include “[i]npatient hospital, skilled nursing,

home health, hospice care, *** [p]hysician, outpatient, laboratory, durable medical equipment,

diagnostic tests, therapies, [and] ambulance services.58 Medicare “provides very limited

coverage for CAM,” which includes only certain chiropractic adjustments, “religious nonmedical

health care,” and biofeedback.59 Furthermore, Medicare provides very little preventive

medicine. For example, diabetes has become an American epidemic, yet Medicare does not

grant coverage offering recipients the “ability to make the dietary and lifestyle changes necessary

to manage the disease.”60 Moreover, minimal prevention such as visits to the hospital to detect

blood levels of prescription drug medicine to make sure they are under control “does not

comport with Medicare policy” because Medicare “summarily defines nonemergency trips to the

doctor’s office as medically unnecessary [Emphasis Added].”61

Medicaid

Medicaid is funded by both the federal and state governments62 and is a “welfare program

for the poor.”63 Covered services can include mandatory and optional benefits, chosen providers,

inpatient and outpatient hospital services, rural health clinic services, early and periodic

screening, diagnostic and treatment services for children, family planning services and physician

and nurse services.64 However, Medicaid has been faulted for having an “inherent erratic nature

[that] runs counter” to the “basic tenet of good primary healthcare: to detect small problems

57 Furrow, supra note 53, at 734. 58 Title XVII of the Social Security Act: Health Care for the Aged, Blind, and Disabled. 59 Boozang, supra note 3. 60 Abraham, Laurie Kaye. Mama Might be Better off Dead. The Failure of Health Care in Urban America. 71.

1993. 61 Abraham, supra note 60, at 69. 62 Title XIX of the Social Security Act. 63 Furrow, supra note 53, at 772. 64 Id. at 734.

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quickly and treat them regularly so they do not balloon into serious illnesses that are more

debilitating, and far more costly.”65

IV. Recent, Progressive Governmental Actions

A. California Health Insurance

For Californians, three important legislative acts have been adopted: the Knox-Keene

Health Services Plan Act (Knox-Keene Act), which includes the methodology for administering

complementary therapies, the Acupuncture Licensing Act (ALA), which specifically licenses

acupuncturists and mandates their inclusion as medical providers66 and The Naturopathic

Doctors’ Act of 2003, which licenses “naturopathic doctors” who have completed a requisite

program of study and have passed a licensing exam.67 The legislature, in enacting the ALA,

addressed its recognition of the “concern with the need to eliminate the fundamental causes of

illness, not simply to remove symptoms, and with the need to treat the whole person … [by

establishing] a framework of the art and science of oriental medicine through acupuncture:”

“The purpose of this article is to encourage the more effective utilization of the skills of

acupuncturists by California citizens desiring a holistic approach to health and to remove

the existing legal constraints which are an unnecessary hindrance to the more effective

provision of health care services. Also, as it affects the public health, safety, and welfare,

there is a necessity that individuals practicing acupuncture be subject to regulation and

control as a primary health care profession.”68

Further, the intent of the legislature in designing the Knox Keene Act is to “regulate managed

care plans,” including the “right to a standing referral for a specialist for a series of visits.”69 A

"standing referral" “means a referral by a primary care physician to a specialist for more than one

65 Abraham, supra note 60, at 51. 66 California Business and Professions Code. Acupuncture Licensure Act. (1999) 67 Clark, supra note 44. 68 California Business and Professions Code, supra note 66. 69 Swartz, Marjorie. Western Center on Law & Poverty and Protection & Advocacy, Inc. (2003)

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visit to the specialist, as indicated in the treatment plan, if any, without the primary care

physician having to provide a specific referral for each visit.”70

Unfortunately, the only reference to preventive care services includes the mandate that

“group health plans must cover preventive services for children through age 18” and, worse, does

not permit self-referral in the event a provider is not included in-policy.71 So, Americans need to

find a health care insurance policy that provides for CAM practitioners and preventive medicine.

But, a health insurance plan that provides these services, once the subscriber reaches the age of

adulthood, is not required to do so.

According to the American Specialty Health website, the California Department of

Managed Health Care did not grant the first Knox-Keene Act license for acupuncture until

1997.72 Even though acupuncturists have been licensed medical health professionals for ten

years, most health insurance plans do not cover such services.73

In 1999, the ALA was adopted, which officially integrated acupuncturists into the

medical community. Interestingly, in addition to the legislative intent described above, the

purpose of the legislation was “to encourage the more effective utilization of the skills of

acupuncturists by California citizens desiring a holistic approach to health and to remove the

existing legal constraints which are an unnecessary hindrance.”74 Yet, acupuncture is still not

provided for under most health plans, which continue to inhibit Americans access to preventive

approaches to healthcare.75 The prospect of achieving a healthier state of being by having access

70 Standing Referral to Specialist. §1374.16. Second of two. Operative term contingent.

http://www.dmhc.ca.gov/library/statutes/knox-

keene/html/__1374_16_Second_of_two_Operative_term_contingent_Standing.htm. 71 Swartz, supra note 69. 72 Devries, George. American Specialty Health. (June 2001) 73 St. John, Meredith. Frequently Asked Questions. http://www.acupuncture-online.com/what.htm. (1998) 74 California Business and Professions Code, supra note 66. 75St. John, supra note 73.

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to alternative therapists through an all-encompassing health insurance plan thus remains

unfulfilled for a vast majority of Americans.

The more recent passage of the Naturopathic Doctors’ Act signifies a further shift

towards the acceptance of promotion of alternative medicine. Naturopaths provide “‘natural’

treatments, such as herbal remedies, vitamins, amino acids, hydrotherapy, massage,

electromagnetism, and dietary and nutritional regimens” and the primary aim is to “initiate the

body’s ‘self healing’ mechanisms.”76

While alternative medicine has received great gains in California, through the licensing

of acupuncturists, naturopaths and chiropractors, the lack of regulation of other forms of

complementary therapies, which promote preventive medicine, is still a problem. The California

Medical Practices Act “regulates the practice of medicine in the state and establishes a

framework for medical licensing.”77 There are separate boards for each different medical

specialty, such as the California Association of Naturopathic Physicians for naturopaths.78

B. Examples of Potential Paradigm Health Plans

First, is the example of a medical savings account, which is a new type of health

insurance plan that is “consumer-driven, or self-directed, health coverage,” provides for coverage

by any provider that the enrollee chooses and has been recently introduced in California.79 This

type of plan is unique for two reasons: it allows people “to choose the benefits and services while

requiring them to assume greater financial risk” and it allows the consumer to choose their own

doctors, which helps them save money.80

76 Clark, supra note 44. 77 Id. 78 Id. 79 Schwartz, Mike. Special Report: Controlling Medical Cost. 1. The Press Enterprise. (February 15, 2004) 80 Schwartz, Mike, supra note 80, at 1.

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A medical savings account operates by having the consumer make more decisions about

controlling costs, seeking preferred professionals, and, most importantly, making wiser

preventive health care decisions. An account is created offering lower premiums and higher

deductibles, with the consumer having the obligation to pay charges up to the increased

deductibles or in excess of covered amounts. The American Medical Association and the

Democratic Party generally support medical savings accounts, while Republicans generally

oppose it.81 Because of the wide variety of possibilities with this approach, plans of this type

allow people to visit CAM practitioners.

Opponents of this plan charge that it is only beneficial to the “young and healthy” and

leaves “out people with the highest medical bills.”82 This is because emergency medical

treatment, surgeries, postnatal care and medications are extremely expensive and could deplete

someone’s health care account “forcing patients to pay a high deductible.”83 Another problem is

that “research shows that people facing higher out-of-pocket costs such as stiff deductibles tend

to skip needed -- as well as unneeded – care.”84 Between needed and unneeded care is

preventive care. Skipping unneeded care can be good because many health problems run their

course and go away naturally. Preventive medicine seeks to tweak the body’s natural defense

mechanisms to assist the body in healing itself and CAM practitioners promote this. While some

CAM treatments may be “costly life-improving advances in knowledge,” they tend to extend

life, reduce sick days and improve physical and mental health.85

81 Fong, Tony. Alternatives to Managed Health Care Gain Support. 2. The San Diego Union-Tribune. (2000) 82 Schwartz, Mike, supra note 80, at 1. 83 Id. at 2. 84 Id. at 3. 85 Wessel, David. How Health Costs Impact The Employment Picture. The Career Journal. Vault.com, Inc.

http://www.vault.com/nr/newsmain.jsp?nr_page=3&ch_id=402&article_id=21614459&cat_id=1123. 2007.

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On the other hand, skipping unneeded care could mean that participants in consumer

driven health care plans could be reluctant to seek preventive medical practices because the costs

associated with them might seem unnecessary. Even worse, they might choose not to see a

doctor because “a routine visit could lead to a diagnosis.”86 While physicians who diagnose are

beneficial to society for being able to diagnose a serious problem, hopefully in an early stage, so

a patient can get treatment before it becomes a real problem, those physicians do not suggest and

prescribe the basics to good healthcare, which can include: proper nutrition, rest, exercise and

avoidance of unhealthy habits. CAM physicians and doctors who practice preventive medicine

suggest lifestyle changes more than they make diagnoses and write out prescriptions. Thus,

plans should offer easily accessible preventive and alternative health care providers to their

participants, such as acupuncturists, naturopaths and chiropractors, who emphasize making

lifestyle changes that involve diet, nutrition, and lifestyle choices to prevent the onset of

diseases.

A second example is one of two special plans now being offered, since the late 90s, as a

complement to traditional health care plans. One is Lifepath that was launched by Blue Shield of

California. Lifepath “will provide members access to credentialed alternative health care

practitioners at a discount.”87 Furthermore, Lifepath provides for access to a nurse line and

mental health coach to help with determining whether or not see mental health care professional

and choosing the appropriate one.88 However, there are two problems with this plan. First, the

discount is not as low as the $10 to $20 co-payments that it costs to visit a primary care

physician in an HMO plan. Second, “credentialed alternative health care practitioners” included

in the plan are too limited in that they only include acupuncturists, chiropractors and naturopaths

86 Fong, supra note 82, at 1. 87 Oser, supra note 5. 88 http://pdf.blueshieldca.com/producer/documentlibrary/A12063.pdf

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and not other significant alternative choices such as hypnotherapists and homeopathic doctors.

Californians “enjoy a wider range of alternative and complementary health care services”

through the licensing of alternative healthcare practitioners.89 Moreover, “[w]hile licensure

opens up the prospect of health insurance coverage, *** it does not compel insurance companies

to offer coverage.”90 This is more of a problem under California law as some other states require

certain types of CAM to be covered.

The third example is the American Specialty Health Care Plan (ASHCP) of California

that is even more of a breakthrough. This plan “offer[s] fully-insured supplemental

complementary healthcare benefit programs directly to employers and health plans” and includes

“massage therapy, acupuncture, chiropractic, naturopathy, guided imagery or nutritional

counseling.”91 Plus, these benefits include “the initial follow-up examinations, acupuncture

treatment and office visits, necessary diagnostic tests, and provisions for emergency services”

with co-payments from $0 to $15 and “with limits of 20 to 50 visits per year.”92 This program

provides for a major reduction in cost and significantly greater flexibility contrasted with HMOs

that include acupuncture benefits typically covering only fifty percent of the cost and usually

only covering six treatments.93 The company is also doing well financially as the revenues were

projected to grow to 120 million in 2005 and “annualized revenues are over $100 million, up

from $77 million since the Company’s national expansion began in 1999.”94 Finally, ASHCP is

the only plan with a market segment in California to be fully accredited by URAC.95

89 Clark, supra note 44. 90 Id.at 397. 91 American Specialty Health, supra at 32. 92 Id. 93 Id. 94 Id. 95 URAC.org, supra note 30.

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ASHCP has grossed over $100 million each year over the last few years, which is

attributable more to growth than inflation. It appears as though ASHCP’s CAM coverage may

have caused the increased revenue. However, there is at least a correlation between the

increased number of subscribers, such that an increasing number of healthcare plans should

follow their lead. Correlation does not equal causation, but it is an important factor.

However, Sentry Health Insurance, which does not provide CAM and only basic

preventive medical coverage, has only experienced a growth of between $1.2 million and $2.3

million per year from 1991 through 2006.96 While speculative, it appears as though this data

shows that more people want ASHCP for the CAM coverage, as is evidenced by the growth in

revenues. Hopefully, this will persuade other health insurance companies to adopt ASHCP’s

model. For example, more prominent health plans like Kaiser and Cigna might want to adopt

ASHCP’s model through offering supplemental health insurance for CAM practitioners.

Another option would be for employers to offer a combination trade insurance for the overly

expensive traditional care, along with employer provided flexible spending accounts to allow

employees to put some money aside (which would be tax free), for the less expensive CAM

therapies.

V. Methods to Evaluate the Health Care Plans

A. Organizational Review

While Democrats are typically the health care reform leaders, Republican President

George Bush even said that “[y]ou can’t make good health care decisions unless there’s

transparency in the marketplace.”97 One of the more prominent health evaluation organizations

is The National Committee for Quality Assurance (NCQA), a non-profit organization designed

96 http://www.sentry.com/BP/Financials/SentryFinancials.aspx?Market=HG 97 National Report. The New York Times. 1. (April 11, 2006)

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to track health care companies and analyze data. NCQA considers itself a “watch dog” for the

health care industry that performs its oversight by “assessing and reporting on the quality of the

nation’s managed care plans through accreditation and performance measurement programs.”98

Specifically, NCQA reports on Healthcare Effectiveness Data and Information Set (HEDIS),

which encompasses 71 measurements of healthcare services.99 However, surprisingly, HEDIS

does not offer reports on many health insurance companies that cover complementary healthcare

practitioners.

In “The State of Health Care Quality” for 2003, NCQA reports the year’s industry trends

and analyses in the health care industry. It asserts that “more than 57,000 Americans die

needlessly each year because they do not receive the appropriate healthcare” and a “majority,

almost 50,000, die because [of] known conditions.”100 President of NCQA, Margaret O’Kane,

attributes a major problem in the health care system to “accountability,” i.e. the health care plans

are not held responsible for problems and there “is a lack of incentive. In [the] present health

care system, it is not only hard to distinguish the good from the bad, but both are compensated

equally.”101 In order to improve healthcare for Americans, monitoring health care companies to

ensure that Americans are getting the best possible health care is helpful, but insufficient.

Fortunately, HMOs are monitored by The Office of the Patient Advocate of California

(The Office), which was created in 1999.102 The Office’s chief responsibility is to report

“objectively how well [an] HMO stacks up against other plans.”103 The Office has made it easier

for patients to compare such things as care for: staying healthy, getting better, living with an

98 National Committee for Quality Assurance. www.ncqa.org (June 2003) 99 National Committee for Quality Assurance, supra note 99. 100 Id. 101 Id. 102 Health Plan Financial Report. The Office of the Patient Advocate. Unaudited Annual 2001.

(July 17 2002) 103 www.opa.ca.gov

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illness, doctor communication and plan service. The Office rates all of the major HMO

companies using a star system with three stars being excellent and one being poor. If one were

to look at the chart and decide which one to choose based on individual categorical ratings, then

it would be difficult because most of the ratings were rated as good. None of the plans received

poor ratings, but also only two out of ten plans received excellent ratings. If one were to choose

based on this chart, they might go with Kaiser Permanente North because it received the most

stars and no fair or poor ratings. The Office also rates medical group quality for such items as

overall rating of care, timely service of care, getting treatment, specialty care and communication

with patients. So, the guide does provide consumers with many important criteria to consider

when selecting a provider.

However, the problem with this rating system is that the only category that would include

preventive medicine would be the category for “staying healthy.” Yet, the preventive measures

only include immunizations, testing for diseases to catch them early, cholesterol, cancer and

other disease screenings, and follow-ups. In contrast, the former director of managed care,

Daniel Zingale asserts that “from its inception, managed care was conceived to be about better

prevention.”104 Zingale adds that “Californians have a right not only to get care after they’re

sick, but a right to stay healthy in the first place.”105 However, staying healthy involves much

more than getting regular cholesterol screenings, for example. The best way to reduce

cholesterol is by eating less of it. Many people do not understand what cholesterol is and how to

avoid it. This is why seeing CAM practitioners can help to point out lifestyle changes that need

to be made and help with those components before disease strikes.

104 www.opa.ca.gov, supra note 104. 105 Id.

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The good thing about increases in licensing of CAM practitioners is that it may become

easier to get a referral if say, for example, a naturopathic doctor were able to be the primary care

physician within managed care. Under a managed care system, a “primary care physician” “acts

as a gatekeeper for an individual patient’s health care.”106 Thus, a patient “will not be

reimbursed unless the primary care physician first makes a referral.”107 So a patient would be

less likely to visit an alternative medical practitioner unless the patient received the referral. If

naturopathic doctors were able to be the primary care physician, then they probably would refer

the patient to more CAM practitioners than the average medical doctor.

Changing and improving health insurance companies can come from employers who

utilize health insurance and consumer pressure. Large employers “have huge health care

expenditures,” thus, “they have both the motivation and the influence to develop *** better and

less expensive approaches to health care coverage for their employees *** [because] [f]ew

employers believe that insurers have the ability to manage care more effectively.”108

Consumer pressure is interrelated with employer pressure because employers “believe

that higher quality and lower cost will result if consumers have more responsibility for their

health care expenditures.”109 So, some cost for employees is good, so that employees have some

responsibility for their care, which is why there are co-payments. A good strategy to improve

health insurance includes having employees have a “greater responsibility for costs and decisions

about care.”110 In addition, measures of quality and efficiency to support these decisions [need

to be] extended beyond health maintenance organizations to include clinicians and hospitals”111

106 Clark, supra note 44 at 398. 107 Id. 108 Shay, Edward F. Plans Providers and Transparency. American Health Lawyers Association Annual Meeting.

(2007) 109 Shay, supra note 109. 110 Id. 111 Id.

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because HMOs would hopefully use these measurements to determine whether or not they are

worthy of inclusion.

The real change should come from the oversight agencies beginning to track companies

that include alternative health practitioners, so that Americans would at least be more aware of

the better options out there. This in turn would mean better health care. In order to provide

quality, stable health care, it is important that the financial well being of health insurers be

carefully considered. In order to assist in improving the ability of health insurers to deliver

health care services more effectively and protect their financial well being, California adopted

the aforementioned Knox-Keene Act, which permitted health insurers to delegate responsibility

to specific providers with which they make such arrangements if their members elect to utilize

the services of such providers. This helps to protect health insurers by insulating them from the

obligations of such providers.

B. Law as a Tool for Change

Law influences healthcare through improving the system through regulating, litigating

and legislating. A legislature can mandate that “CAM benefits be included in private health

insurance plans or that the services of CAM providers be covered.” In Washington, health

insurance companies must give all providers “equal treatment.”112 However, California does not

have that law. Thus, some CAM practitioners, although licensed in California, do not have to be

included in health insurance companies’ networks. Yet, if the law were changed to mandate

inclusion, as in Washington, subscribers would likely utilize CAM services more often and thus

have improved health.

The legal system as a mode for litigation is also an effective tool for change. In the case

of California Emergency Physicians Medical Group v. PacifiCare of California, a health insurer

112 Boozang, supra note 3.

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delegated its responsibility to a specific provider.113 The medical provider company to which

PacifiCare delegated its obligations pursuant to the election of its members, Family Health

Network, went bankrupt.114 California Emergency Physicians Medical Group, to whom Family

Health owed money, sued PacifiCare for the costs of services that it had provided to PacifiCare’s

members.115 However, the Court of Appeals determined that even though the Knox-Keene Act

mandates that health care services plans pay for their members’ services, they are expressly

permitted to “delegate that payment obligation” as Pacific did to Family Health Network and that

such permitted delegation removes any liability from PacifiCare that it might otherwise have

had.116

C. Purposes for Evaluation

One way to evaluate the efficacy of a healthcare plan is through analyzing whether the

plan is fiscally sound. Several sources such as the Office of the Patient Advocate reviews

financial information for various health plans. Transparency is important because there is still a

risk to consumers if a health care company files bankruptcy. The patient remains responsible to

the medical or comparable provider if the insurance company fails to pay. Thus, healthcare

plans can be rated as more or less successful depending on whether inclusion of complementary

and alternative healthcare improves financial performance. Another source is the California

Medical Association, which publishes an annual “Knox-Keene Health Plan Expenditures

Summary,” which advises that the “administrative costs and profit levels are just two of the

many factors which contribute to a plan’s overall value.”117 In analyzing the financial

performance of the various companies, it is informative to note that Blue Cross of California,

113 California Emergency Physicians Medical Group v. PacifiCare of California, U.S. S119717 (2003) 114 Id. 115 Id. 116 Id. 117 California Medical Association. Knox-Keene Health Plan Expenditures Summary. ii. (2001-02)

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which does allow limited access to CAM practitioners, has outperformed PacifiCare, which does

not.118 Blue Cross is shown to have a profit of 7.3% of revenues, while PacificCare, the

traditional health provider that does not include access to complementary health care

practitioners, only has a profit of 1% of revenue. While this data is only for the 2001/2002 fiscal

year, the chart that compares “expenditure ratios for five years” shows Blue Cross to have profits

consistently between 7.3 and 9.3%, while PacificCare began with a 6% profit and declined

progressively to 1%.119 Finally, the financial solvency board for the Office of the Patient

Advocate shows American Specialty Health Plans to have total annual revenue of $89,514,347

with a net income of $6,613,695 for 2001. While this is a limited sample, this comparison is

suggestive that the plans that include complementary health practitioners are doing better

financially than those that do not. Further, some may argue that the study is flawed, because the

result may be due to other factors aside from the inclusion of CAM practitioners. However, a

study by the ASHCP shows that patients were more than satisfied with their CAM treatment.

Patient satisfaction is a good indicator because they are making the determination based on the

price and their health improvement after treatment. The study showed that the percent of

respondents who rated “overall quality of care and service” as excellent, very good, or good” as

99%, for acupuncture and chiropractic and 98% for massage therapy and naturopathy.

As noted, regulatory boards that monitor health insurance companies have helped to

facilitate better health for Americans. California’s model legislation for managed care is what

created the Office of the Patient Advocate that has also helped to give Americans better health

care. However, according to Times, the United States Congress is still hesitant to adopt the

118 California Medical Association, supra note 117, at 6. 119 Id.

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California model of Managed Care.120 Some critics, such as California Assembly Republican

leader Scott Baugh warns that it “will bring about a collective increase in premiums to the rate

payer of 10%-15%.”121 However, an increase in premiums would mean less money over the long

term because people may be more motivated to utilize their health insurance as a resource and

tap it for all its worth. Improved health care is worth the extra money, even more so if an

appropriate amount were going towards preventive health care. The initial extra cost predicted

for including preventive care would result in substantial long term savings by reducing, over

time, the incidence of sickness and disease and the need for their far more expensive treatment.

California is ahead of other states’ plans because CAM practitioners are covered more here than

elsewhere.122

One barrier in California to health insurance covering more CAM modalities is laws that

proscribe all treatments other than conventional types of treatments. For example, California law

prohibits treating “cancer other than through chemotherapy, radiation, or surgery” such that

“sharing any other possible treatment with patients results in statutory violation of”123 the

California Health & Safety Code.124 The law effectively works to impede doctors from

prescribing “non-conventional curative measures.”125 Furthermore, doctors presently do not

have a duty to recommend or discuss alternative medicine under informed consent law. Doctors

have a general duty to inform patients of risks and benefits of the treatments that they can

provide, but they don’t have a duty to discuss nontraditional therapies. Indeed, it may be a

vicious cycle of insurance company reluctance to provide coverage for CAM and physician

120 Marquis, Julie, Rubin, Alissa J., and Ingram Carl. Broad Health Care Reform Package Signed into Law.

www.contac.org (September 28 1999) 121 Marquis, supra note 120. 122 Lundgren, Justin and V. Ugalde. Physical Medicine and Rehabilitation Clinics of North America. The

Demographics and Economics of Complementary Alternative Medicine. 15, 4, 955-961. (2004) 123 Mickelson, supra note 14, at 119. 124 Section 109300 (West 1996) 125 Mickelson, supra note 14, at 119.

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reluctance to make referrals because of insurance company resistance to allocating resources

there.

D. Alternative Medicine Evaluated

Not everyone is a proponent of alternative medicine. A lot of people think that natural

medicine does not work and that is why we have prescription drugs. Historically, some people

have tried to take advantage of the sick with promises of cures – such as so called “snake oil

salesmen.”126 Moreover, the term “quack” has come about to describe “anyone who promotes

medical schemes or remedies known to be false, or which are unproven, for a profit.” 127 The

federal False Claims Act and the Medicare and Medicaid fraud and abuse statute penalizes those

who make false claims, so alternative practitioners are held to some of the same standards to

which board certified physicians are held. Today, California licenses some alternative and

complementary practitioners, including naturopaths, acupuncturists, massage therapists and

chiropractors. The group of unlicensed alternative practitioners can still be “policed” through

enforcement of the False Claims Act and the Medicare and Medicaid fraud and Abuse statutes

and can include practitioners who utilize hypnosis, biofeedback, magnetic fields, Reiki and qi

gong.128

E. Looking Forward

Governmental privatization of health insurance is unsuccessful if health insurance

providers are unresponsive to American interest in preventive medicine. As previously stated,

American interest in preventive medicine is on the rise, but actual implementation of coverage

within health insurance policies has been shown to be inadequate. If the government determined

126 Mehlman, Maxwell J. Quackery. The Dietary Supplement Health and Education Act: Regulation at a

Crossroads. 31 Am. J.L. & Med. 349, 354 (2005) 127 Mehlman, supra note 126. 128 Id. at 357.

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to implement health insurance coverage for all Americans, it should cover the cost of preventive

medicine and alternative therapy because the main objective should be better care rather than

cutting, or even controlling, costs. However, universal healthcare coverage could become

economically and politically unsustainable because the U.S. government failed in the past to

provide lasting health insurance for its citizens and other countries with universal healthcare are

typically cited to have faults with substandard coverage and long waits.

Accordingly, the question arises as to who should cover the cost of the treatments taken

to prevent the onset of disease to Americans? Few current health insurance companies cover

CAM practitioners because, in their short-term orientation, they attempt to manage care in the

least costly way. In an article written in the Journal of Health Politics Policy and Law, Mark A.

Peterson discusses what has helped health care in the past and what is at stake in the future.129

He explains that the United States has been debating about “whether or not to join other

advanced industrial democracies in guaranteeing health care insurance coverage as a signature

feature of citizenship.”130 However, since change is a slow and difficult process and, increasing

costs breeds resistance, which, as noted above, is unlikely to be undertaken voluntarily by the

private sector, perhaps, as a start, consideration should be given to the government providing at

least a modicum of preventive health coverage for Americans. Presently, the government offers

a modicum of cost reduction through tax deductions for CAM, but the government is resistant to

offering much more benefits. Moreover, the resistance to a rise in cost means the private sector

is unlikely to incorporate much change.

If the proposal to have the government provide a modicum of preventive health coverage

is to be considered, then a strategy involving the “passage of federal legislation that would at

129 Peterson, supra note 9. 130 Id. at 2.

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least set the trajectory for achieving a universal health care system under the guidance of the

public sector” needs to be adopted because U.S. health insurance has left Americans

disappointed with the health care system.131 Indeed, a “modern state” – a so-called “‘welfare

state,’ assumes responsibility for various welfare tasks for its people” but in actuality, “bad

prioritization, corruption, and political maneuverability *** prevent state funds from being

utilized for the genuine needs of the people.”132 Moreover, the upward trend of increasing

defense funding has decreased the potential for increasing healthcare spending.133

Finally, the lack of medical evidence showing the efficacy of CAM therapy is a

hindrance to more CAM health insurance coverage. Thus, “when reliable evidence becomes

available that a particular CAM therapy is effective, compares favorably to the conventional

alternatives and is cost effective, it should become the standard of care and should be covered by

health care plans.”134

VI. Conclusion

Thus, traditional policy has not yet been transformed sufficiently to remedy its inherent

inadequacies. Consequently, the overall picture on health insurance is mired in a managed care

scenario that does not favor preventive health care or alternative medicine. However, there are a

number of reforms slowly infusing their way into the system that appear encouraging. While the

nation is slowly beginning to incorporate preventive health measures into current health policy

by finally acknowledging and including complementary health practitioners into covered health

care, the reform process is impeded by the recent history of the health care infrastructure as the

131 Peterson, supra note 9. 132 Matta, A.M. Effects of Resource Constraint on Health Care Services. 26 Med. & L. 213, 214 (2007) 133 Matta supra note 133. 134 Boozang, supra note 3.

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“choices of one period are intimately linked to the choices grasped or missed in a previous

era.”135

135 Peterson, supra note 3.