Washington health plans find utilization, costs for alternative health care modest so far.
WA Alternative Health Care
October 31, 1997
Medical directors from three of Washington’s largest managed care organizations say that utilization of the state’s mandated alternative medicine benefit has been too low to provide meaningful cost-benefit data so far. But, lawmakers, health plan executives, and consumers across the country continue to monitor Washington State’s unique law, which requires health insurance carriers to provide access to all categories of providers licensed or certified by the state. They want to know how it is being received by consumers and physicians and how it is being implemented by managed care organizations.
"While we can’t provide specific numbers," said Laura Patton, MD, clinical director for alternative care at Group Health Cooperative of Puget Sound, "we can say that expenditures for these services have been close to what was budgeted and it appears it is possible to offer this benefit and still control costs." Jack Dutzer, MD, medical director for Group Health Northwest, said his plan has experienced "relatively modest" expenditures for the alternative services.
Benefit not advertised
The medical directors said their organizations have not advertised the benefit very much, believing that people have become aware of it through the news media and state Insurance Commissioner Deborah Senn, who issued an August 1996 order to enforce compliance with the law that took effect earlier that year.
Insurers challenged the commissioner’s authority to enforce the law through an administrative bulletin. A state court upheld the commissioner’s authority to do so. Insurers then filed an appeal to the U.S. District Court, which ruled that the statute conflicts with the federal Employee Retirement Income Security Act of 1974 (ERISA) in its application to employment-based groups. Ms. Senn appealed that decision to the Ninth Circuit Court of Appeals, where the case is now pending.
Although the legal applicability of the state mandate is being questioned, Mark Rattray, MD, medical director for Qual-med Washington Health Plan, said most plans are implementing it because they are "interested in working with complementary and alternative medicine providers." Health plans "believe that these providers can offer some benefits for the plans’ members," he said.
Access to providers of complementary or alternative medicine works the same way as access to specialists. Members must obtain a referral from a primary care physician, both to ensure that a diagnosis has been made and that any conventional treatment recommendations and options have been explained to the patient.
Dr. Dutzer said the response from his plan’s primary care physicians "falls into the law of thirds—one-third think it’s quackery and refuse to make any referrals, one-third think it’s great (because it) allows them to provide more services to their patients, and one-third don’t really care one way or the other." If a primary care physician refuses to make a referral, all three plans have provisions for an administrative referral upon patient appeal to the plan, but so far there has been little use of that provision.
Dr. Rattray said that primary care physicians and others need to learn more about the alternative therapies and the alternative providers need to learn more about managed care. He said QualMed has found that many alternative providers terminate their contracts once they learn that managed care means that the plan will set the number of visits, determine when patients can use the provider, and require the provider to accept the plan payment without balance-billing the patient.
A task force has been formed comprising plan representatives and alternative and complementary providers to develop a better understanding of a number of issues, including appropriate conditions for alternative providers to treat, the track record of alternative therapies, and the ways in which managed care operates.
Effectiveness studies
None of the three plans has been able to do effectiveness studies because of the low utilization and the difficulty in establishing appropriate control groups, especially among chronic patients, who tend to use the alternative benefit more. Dr. Patton said Group Health Cooperative of Puget Sound is receiving treatment summaries from providers, but is reviewing them more for the quality of the information than for any indicators of success. She expressed hope that, in the future, they would be able to use utilization review information to determine best practices and develop practice guidelines.
Dr. Dutzer of Group Health Northwest said his plan would like to be able to determine if the alternative procedures are more effective or could supplant mainstream practices. "It’s hard to say we’ve learned much so far," he said, "and hard to determine the placebo effect on physiological or functional improvement. There is no evidence that the alternative procedures are supplanting more expensive or potentially dangerous allopathic (mainstream) interventions."
"Whenever you add something to the health care delivery system, it is never free. Those wanting to access such providers are asking the rest of the citizens to help pay.
—Dutzer
Dr. Dutzer believes that the mandate has added to the cost of health care, despite claims by some proponents that the mandate would ultimately lower costs by moving people from more expensive mainstream interventions to less expensive alternative interventions. "Whenever you add something to the health care delivery system, it is never free. Those wanting to access such providers are asking the rest of the citizens to help pay. Not everyone wants to use the alternative services, but everyone has to pay. Society has to decide what it is willing to pay for in an insurance social contract."
Dr. Dutzer said he would like to have the freedom for his plan to "include things we know to be effective and procedures that produce positive results and not just a placebo effect."
Future not clear
The medical directors acknowledge that consumers seem happy with the benefit, although Dr. Rattray of Qual-Med said they are dealing with a "vocal small minority who are pushing hard" for the opportunity to use alternative providers, while the general member population "is not yet clamoring for this benefit."
While Qual-Med now has naturopaths in its network, provides massage therapy through its physical therapy offices, and has a small panel of acupuncturists to meet the needs of one client who offers that service as a benefit, Dr. Rattray said the plan is devoting more time and energy to "dealing with other significant operating issues that would improve customer service for the bulk of our members."
While the medical directors say the future of the benefit is not clear, none of the plans expect to make major changes while the legal appeal is in process. Dr. Patton said she hears no sentiment in her plan to pull back from this benefit, and said discussions are being held about the possibility of offering a "richer benefit" as a rider.
Dr. Rattray predicts that as consumer demands increase and as the result of studies at a University of Washington alternative medicine clinic become available, the alternative medicine benefit will be gradually integrated in Qual-Med’s benefit package.
Dr. Dutzer said that despite what has been a "shaky start," he hopes that the "long-term outcome is that residents of Washington are better off in terms of their health than in the past."
—John Hope
Contact Dr. Dutzer at 509-858-9100; Dr. Patton at 206-448-6135; Dr. Rattray at 206-869-3500; and Mr. Harkins at 360-586-4422.
Washington health plans find utilization, costs for alternative health care modest so far.
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