Integrative medicine: business risks and opportunities. (Complementary and Alternative Medicine).

Much of the buzz over integrative medicine is well deserved. The opportunities seem to outweigh the risks, but superior management skills are needed to guide these programs through adolescence into clinical and business maturity. By carefully considering the staffing, team building, compensation methods, marketing, and program evaluation and development issues explored in this article, health care and physician executives should be able to steer between the rocks on their way to integrative medicine decisions that are right for their organizations. Many claim that integrative medicine has the potential to reshape health care delivery in a more patient-centered direction. While this may be true, such programs must prove themselves from financial and clinical operational perspectives in order to achieve this potential. Luminary clinical skills are not enough to guarantee the survival of such programs-a strong clinical base of expertise in alternative therapies is a key success factor. As with any health care ve nture, there are no substitutes for clinical excellence or sound management.

Key Concepts: Integrative Medicine/Alternative Medicine/Complementary Medicine/Integrative Medical Movement/Building Alternative Medicine into the Service Mix

ALTERNATIVE MEDICINE HAS CREATED A MAJOR BUZZ in the boardrooms and lounges of America's health care organizations. By almost any measure (patterns of use, satisfaction with care, cost and supply of non-physician practitioners, clinical applications, etc), the decision to incorporate alternative medicine into the service mix of a hospital, health plan, group or individual physician practice, or other health care organization looks like a winner. From a management perspective, however, the crucial measure of any alternative medicine program is its contribution to the organization's financial performance. The question for some executives will be whether to build alternative medicine into the service mix. For most, the questions will be when, and how to do so in a way that adds value for patients, practitioners, and managers.

American WholeHealth, Inc., is a venture capital-backed health care startup organization that owns and operates five Integrative medicine centers. We have spent the past two years grappling with the business risks and opportunities inherent in designing and operating centers of excellence whose goal Is to provide mainstream access to professional, integrative medical care that adds value for the consumers and purchasers of such care, and that generates a superior rate of return for its investors.

Information gathering and consensus-building

For executives supervising an organization's efforts to get into the integrative medicine game, work begins with information gathering. Here, it can help to assign working definitions to the concepts of alternative, complementary, and integrative medicine, as these terms are often used interchangeably, resulting in confusion.

Alternative medicine, perhaps the most widely used and recognized term, refers to all healing methods not routinely taught in the education and training programs of conventional medicine. Complementary medicine is a less divisive term that presumes that certain alternative medical approaches are safe and work reasonably well, and that the label complementary will serve until such time as they can be considered conventional. Integrative medicine refers to a clinical approach that combines the strengths of conventional and alternative medicine with a bias toward options that are considered safe, and which, upon review of the available evidence, offer a reasonable expectation of benefit to the patient.

Every review of market trends in patient demand for complementary and alternative medical care indicates growth and opportunity. What these reviews do not address, however, is how planners and managers should go after this market. This task will be trickier if, within a given health care organization, a clash of conventional and alternative medical cultures promises to threaten group cohesion.

Concerns about whether an integrative service mix are "evidence-based" should be treated respectfully. If the program, as part of its operation, incorporates some effort to track clinical outcomes, this alone will go a long way toward disarming critics. With outcomes tracking, program proponents are in a better position to point out that in an outcomes-oriented health care era, value is traced to whatever works, and integrative medical approaches deserve a seat at the evidence-based table as much as conventional approaches do. It is also fair to point out that somewhere between 30 and 50 percent of consumers have sought health care services described as alternative within the past year, which means taking a serious look at starting up an integrative program is nearly imperative from a business perspective. (1,3)

When discussing a proposed program, flexible use of the terms alternative, complementary, and integrative is advised. To conservative members of an organization's medical staff, the term complementary is likely to be less controversial than alternative. To the health care consuming public, alternative may be better recognized than complementary. From an academic standpoint, the concept of integrative medicine best captures the spirit of the clinical movement toward whatever works. Naming a program should, therefore, take into account organizational politics, marketing advantage, and the need to educate others about the thrust of the integrative medical movement.

An integrative medicine program has several attractive qualities. There is potential for a higher than average cash practice. (4) The patient experience in such settings is amenable to higher than average satisfaction ratings. (5) The cost structure of a program is generally favorable because of the leveraging of non-physician clinicians. (6) If leading advisors see no major political or economic obstacles to establishing an integrative medicine practice, efforts should then be made to identify and recruit top prospects for the clinical and administrative leadership of the program. These individuals can then be enlisted to help determine the appropriate staffing.

Staffing

Staffing an integrative medicine program is fraught with risks and opportunities. The biggest challenge may be finding a suitable lead physician. The medical director of an integrative medicine program should have solid conventional credentials, as well as proven leadership and management skills. Ideally, such a physician will also have credentials in nutrition, osteopathic manipulation, mind-body medicine, or alternative modalities, such as acupuncture, homeopathy, or naturopathy. At the very least, an integrative medicine program medical director should have an open minded and enthusiastic orientation toward the clinical application of alternative healing traditions.

Staffing decisions about the alternative medicine component of an integrative medicine program will depend on a several issues. These include state regulations, credentialing, financial contribution (influence on program financial performance), clinical contribution (influence on positive clinical outcomes) personal qualities, cultural fit, and references.

From the standpoint of regulations, credentialing, and potential financial and clinical contributions, chiropractic physicians and acupuncturists bring much to the table. Dietitians and clinical psychologists have standardized credentialing, high potential for contributing to favorable clinical outcomes, but somewhat less potential to contribute financially. Homeopathy can become part of the service mix through a classically trained and credentialed homeopath, or through multi-skilled practitioners who have obtained homeopathic credentials through continuing education. Practitioners of therapeutic touch, Reiki, and related healing methods have less standardized credentialing, so hiring must be based on especially meticulous interviews and referencing. Other types of bodywork (massage therapy, Feldenkrais, etc.) can play clinically helpful, though financially limited, roles. Program planners must, at some point, draw a line distinguishing alternative modalities that will be included from those that will not.

The primary variables that determine the potential financial contribution of an alternative practitioner include scope of practice, fees, ability to provide insurance reimbursable procedures, and throughput. Of equal, if not greater, importance, are the non-quantifiable qualities of the candidate: work ethic, entrepreneurial spirit, team fit, people skills, etc. Back office and support staff modeling will depend on the clinical service mix and its ability to generate revenue.

An obvious concern relates to determining how "alternative" a program's services should be. At American WholeHealth, this is decided by a policy council made up of clinical and administrative leaders from each center. In addition to a standard protocol for weighing these decisions, we informally apply the "60-minute test," and the "15-minute test." First, the service in question must be expected to survive the (often biased) scrutiny of an investigative team (the "60-minute" test). There are enough challenges in designing a successful integrative service mix without having to worry about public relations spin control. Second, the proponent arguing for inclusion of a new alternative service has 15 minutes to persuade the group that the service in question passes the 60-minute test. If informal and formal criteria are met, guidelines for implementation and monitoring are set, and the service is offered.

Team building

Once a staff has been assembled, they can't be expected to function as a well-oiled machine from day one. Training, case conferencing, and informal get-togethers can help to create a shared history, and the kind of esprit de corps required to deliver on the kind of patient experience promised by an integrative medical program.

John Reed, MD, the National Medical Director for American WholeHealth, captures the essence of the training challenge by observing that integrative medicine programming is not like spring training, where the group focuses on building a team out of players who all play the same game. Rather, it is like figuring out how to get baseball, football, basketball, soccer, and hockey players to play a new game whose rules are still being written. From this perspective, building a winning integrative medicine team is easier said than done.

Each American WholeHealth center sponsors a weekly, hour-long case conference for its clinical staff. At this lunch meeting, staff gathers to review two or three cases. These conferences, perhaps more than anything else, capture what is different, challenging, and exciting about the integrative medicine movement. For example, I may present a case of a patient with chronic asthma, allergies, and irritable bowel, detailing what treatments have been tried, and with what hopes and expectations the patient sought care.

The acupuncturist to whom I referred the patient then explains that based on traditional Chinese medical evaluation, what we're calling allergic sensitivities and irritable bowel is, from his perspective, kidney yin deficiency with liver chi stagnation, and that the patient's early response to acupuncture treatment has been positive. He recommends consultation with the psychologist, on the rationale that the patient expressed willingness to explore emotional blocks related to prior traumas, and to develop voluntary self-regulation skills. A chiropractor physician asks about the patient's biomechanical status, and a discussion of chiropractic therapy for asthma ensues.

Before 15 minutes have passed, we have considered a patient's health status from the perspective of four healing traditions. This bouncing from one healing paradigm to another when discussing a case characterizes the uniqueness of an integrative medical approach to patient care. As the integrative medicine movement progresses, it will be interesting to see if there is a healing paradigm that can accommodate these various perspectives, and it will be important to determine what influence this kind of approach has on clinical outcomes.

Compensation methods

Start-up programs can rarely afford guaranteed salaries, and integrative medicine programs are no different. The general trend in physician compensation is toward risk sharing. Models include percent of charges, base plus incentive, draws against charges, etc. From a business standpoint, it makes sense to model the compensation of alternative practitioners in a similar way. Contract negotiations should remain flexible, however, so as not to repel or drive away potential star contributors. The risk has to go both ways. Larger institutions may be able to cost-subsidize salary guarantees in order to attract and maintain clinicians with luminary integrative skills. The use of part-time employees or independent contractors can give program administrators the flexibility to yoke revenues with expenses and minimize the slope of stepped costs.

Marketing

Sound market research and strategic planning is as critical to launching an integrative medicine program as any other program. A "build it and they will come" strategy can generate some unpleasant surprises. What market are you targeting? What products and services will meet the needs of this market? What is your pricing strategy? A fee-for-service niche? Managed care market share through low, penetration pricing? How will you promote the program? Have you tested the message? Is the program's location appropriate?

A small, up front investment in focus groups and message testing can save a great deal of embarrassment and aggravation later. In some health care environments, there may be stakeholders who feel threatened by the competition offered by an integrative program. This calls for leadership and internal marketing skills, which in turn must be supported by a realistically favorable business plan, and a willingness to represent the interests of the whole organization.

Careful attention should be paid to cultivating other clinical providers as referral sources, especially those struggling to improve the health status of patients with complex, chronic forms of illness, as these patients express high levels of satisfaction with integrative types of care. (7) Look for win-win relationships, and develop them aggressively. Once a referral stream is established, turn the customer service up a notch, or you'll risk losing the referrals. When treated well, these referral streams tend to be self-perpetuating, and much less expensive to maintain than advertising.

Program evaluation and development

If the program can hit its budgeted margin within two years, consider yourself successful, and explore whether the model can be replicated or expanded upon. If the program fails, continuation should be based on demonstration of lessons learned, and a capacity to adjust revenues and expenses in a way that will quickly generate the expected operating margin. Clinical operations require periodic auditing to assure that training, coding, documentation, and team communication standards are being met.

Conclusion

Much of the buzz over integrative medicine Is well deserved. The opportunities seem to outweigh the risks, but superior management skills are needed to guide these programs through adolescence into clinical and business maturity. Some health care organizations may find the issue too controversial, and will opt not to stir up a political snake pit. Others may rush forward too quickly, seeking opportunity, only to find mopping up to do because of poor planning. By carefully considering the issues discussed in this article, health care and physician executives should be able to steer between the rocks on their way to integrative medicine decisions that are right for their organizations.

Many claim that integrative medicine has the potential to reshape health care delivery in a more patient-centered direction. While this may be true, such programs must prove themselves from financial and clinical operational perspectives in order to achieve this potential. Luminary clinical skills are not enough to guarantee the survival of such programs--a strong clinical base of expertise in alternative therapies is a key success factor. As with any health care venture, there are no substitutes for clinical excellence or sound management.

References

(1.) Eisenberg, D.M., et al. Unconventional medicine in the United States: prevalence. cost, and patterns of use. New England Journal of Medicine 1993;328(4):246-51.

(2.) Murray, J., Sheperd, S. Alternative or additional medicine? An exploratory study in general practice. Social Science Medicine 1993;37:983-8.

(3.) Drivdahl, C.E., Miser. W.F. The use of alternative health care by a family practice population. Journal of the American Board of Family Practice 1998:11 (3):193-99.

(4.) Grandinetti, D.A. Integrated medicine could boost your income. Medical Economics 1997;Sept 8:73-99.

(5.) Weeks, J. First report on use of alternatives managed by HMOs: high member satisfaction. possible savings. Townsend Letter for Doctors and Patients 1998: April:52.

(6.) Cooper, R.A., Henderson, T., Dietrich, C.L. Roles of nonphysician clinicians as autonomous providers of patient care. Journal of the American Medical Association 1998;280(9):795-802.

(7.) Pioro-Boisset, M., Eadaile, J.M., Fitzcharles, M.A. Alternative medicine use in fibromyalgia. Arthritis Care and Research 1996;9(1):13-17.

Keith Berndtson, MD, is the Midwest Regional Medical Director for American WholeHealth, Inc., a venture capital-backed health care startup organization that owns and operates five integrative medicine centers. Two are located in Chicago, and the others are in the Denver. Washington. D.C., and Boston areas. He can be reached by calling 773/296-6700 or via fax at 773/296-1131.