Every Friday night, Jennifer Siebel attends a yoga class. A few months ago, she could barely touch the floor with her hands. Now, to her amazement, she can bend forward and touch the floor with the top of her head.

     "When you say 'yoga,' people often think of twisted bodies and a lot of chanting. But that's not what it's all about," says Siebel, an HR generalist at Placentia, California-based Western Sky Industries Inc. "People are just trying to be in better health."

     From the beginning, Siebel has paid for her classes out of pocket. But in the near future, she expects that to change. Western Sky, she says, is currently reorganizing its health benefits package because various divisions are enrolled in different plans, and they want to centralize a standard benefits package.

     A manufacturer of aerospace, automotive and industrial parts, Western Sky employs 1,500 workers worldwide. Its HR department, she says, is seriously taking into account the increasing number of employee requests for complementary and alternative medicine (CAM) benefits. "Human resources needs to prepare for this," says Siebel.

     For example, in a recent article in Yoga Journal, Siebel learned that companies such as NYNEX, IBM, AT&T, Nike, HBO and Apple already offer onsite yoga classes as a regular employee benefit. In fact, more than 81 percent of North American businesses with 50 or more employees have some form of health promotion program. And according to a Business and Health magazine "Executive Opinion Survey" last year, 16 percent of employers offered alternative medicine coverage in 1997, up 7 percent from the previous year. For large employers with more than 500 employees, the percentage tripled, from 8 percent in 1996 to 24 percent in 1997.

     Indeed, by the year 2010, complementary and alternative medicine treatments are expected to be widely recognized as appropriate or complementary therapy for a wide range of conditions, according to futurist Clement Bezold, president of Alexandria, Virginia-based Institute for Alternative Futures. "Two-thirds of Americans will use some form of what we now think of as complementary and alternative medicine," he says.

     As employers constantly look for ways they can reduce their long-term health costs and juice up their benefits packages to attract and retain top talent, CAM benefits are massaging their way into health care packages. Although most data is subjective and anecdotal, individuals who use CAM therapies have reportedly become healthier, happier and more productive.

     Employers, on the other hand, may save costs from reduced absenteeism, fewer medical claims and by sharing the expenses of such benefits. The key for HR is to explore the new knowledge, and to credential your providers to avoid liability, and weigh the costs against your company's business goals.

     "The increased use of alternative therapies has spurred a lot of questions about coverage," says Karen Clark, executive vice president of Calveton, Maryland-based Benicor Associates Inc., an employee benefits consulting firm.

What exactly is complementary and alternative medicine?
    Complementary and alternative medicine generally refers to such therapies as chiropractics, Oriental medicine, homeopathy, yoga, massage therapy, herbal remedies and other practices that aren't widely taught in U.S. medical schools or used in U.S. hospitals. Some are as befuddling as their names: Panchakarma, Rolfing, Huna and biorelax therapy.

     The term "complementary" is commonly used by medical researchers and advocates to emphasize that such therapies aren't replacements for conventional medicine. In fact, the more politically correct term is integrative medicine, which combines the best mind-body-soul practices of conventional and alternative treatments.

     To illustrate the demand, in 1997, 42 percent of Americans spent $21.2 billion on visits to alternative medicine practitioners - the majority paying out of pocket, according to Dr. David M. Eisenberg in an article published last November in the Journal of the American Medical Association.

     Several factors are driving employee and consumer interest. First, this is an arena in which the experience of the decision maker is critical, says John Weeks, publisher and editor of Seattle-based The Integrator, a monthly newsletter focusing on the business of alternative medicine. It's not surprising that when major health groups such as Oxford Health Plans and Blue Cross began providing CAM benefits, the word to do so came from the top - the CEOs, who also happen to be baby boomers. "A lot of the ideas of alternative medicine has grown as the boomers moved from the '60s to the '90s," says Weeks. "But now, they're in positions that allow them to run things."

     Regarding the academic community, 75 percent of U.S. medical schools currently offer instruction in complementary and alternative therapies - though not because the AMA endorses it. On the contrary, patients are asking doctors to recommend or provide alternative treatments - many of which the latter know little about.

     "There's a gap right now. The consumers are more educated about some of these therapies than the physicians themselves," says Dr. Brian M. Berman, associate professor and director of the Complementary Medicine Program at Baltimore-based University of Maryland School of Medicine.

     Legitimate concern and ignorance also have bred skepticism, to put it mildly. Many physicians, such as author Dr. Wallace Sampson, still believe CAM advocates use "pseudoscience" to glorify their practices. In his book, The Flight From Science and Reason (Johns Hopkins University Press, 1997), he writes: "Although it's difficult to pinpoint direct examples of value-free analysis and cultural relativism in the advance of pseudoscience in medicine, the footprints can be seen in many places where the validity of information takes second place to emotion and comforting philosophies."

     Nevertheless, major health groups such as Oxford Health Plans, Aetna Life & Casualty, Blue Shield, Harvard Pilgrim Health Care and others are still responding to employee and consumer interest. Managed care companies and hospitals increasingly view CAM benefits as a way to differentiate themselves in the competitive health care market.

     At the same time, consumer pressure has generated state laws requiring coverage of services from some alternative providers. For example, in January 1996, Washington state became the first in the nation to require all health care plans and insurers to include "every category of provider." The law includes chiropractors, physicians, acupuncturists, physician assistants, registered nurses, podiatrists, licensed massage therapists, midwives and osteopaths.

     And in 1997, when the Washington, D.C.-based National Institute of Health deemed acupuncture as an acceptable alternative to medication for the treatment of chronic pain, the CAM movement yielded a credibility boost. It's no wonder your employees may be needling you to find out how to include CAM in your benefits package.

     Here's how some employers are making it work - at affordable costs. There are basically two options: providing it as an insured benefit or as an uninsured discounted benefit.

Employers can provide CAM as an insured benefit.
    Susan Kennedy, director of human resources at the New York Academy of Sciences, is unsurprisingly skeptical of alternative medicine. "I prefer using traditional medicine," says Kennedy. Although she has no quarrel with individuals who put their health needs in the hands of nutritionists and acupuncturists, she sees no value in an employer subsidizing these practitioners.

     However, Kennedy does admit that the insured CAM benefits provided by the company's health provider, Oxford Health Plans, have been well received by her employees. " didn't make the decision. Our medical benefit provider added alternative care providers for all of its clients. I was happy to have Oxford do the for us."

     Oxford Health Plans, based in Norwalk, Connecticut, was the first multi-state health plan to launch a CAM program. It serves more than 1.9 million members in the eastern states. After a survey conducted among its members about their use of alternative therapies, Oxford announced in October 1996 that a program was in the works. Immediately, the company recorded up to 1,000 calls a day from interested plan members and non-member consumers. Oxford Alternative Medicine Program was launched on January 1, 1997.

     The two-tiered program offers either a rider - which employers can purchase by adding 3 percent to the cost of annual premiums per individual - or a contracted rate for all health plan members, which means a 15 to 25 percent lower charge for services. Services include chiropractic care, acupuncture, nutritional counseling and, in some states, naturopathic treatment (non-drug therapies).

     Oxford's network of 2,300-plus providers grew by setting up requirements for participation. All providers must be state licensed and committed to providing education. In addition, they must have malpractice insurance and undergo a site inspection.

     By providing CAM as an insured benefit, employers send a positive message to employees. It says the company is willing to invest in employees' wellness. "Even though I understand why a company may prefer a discounted arrangement, it's not going to be as meaningful as an insured benefit," says Lee Launer, a partner and director of marketing health plans at New York City-based PricewaterhouseCoopers.

     For example, a back treatment could cost an individual $100. When it's a covered benefit, the employee will typically be charged a $20 co-payment. If a company contracts with a discounted network of CAM providers, the employee will most likely end up paying $80, with the company only paying $20 under the terms of the employer-vendor contract. "That's a big difference," he says.

     However, the trade-off for providing CAM as an insured benefit may be to an employer's long-term advantage. According to the Bureau of National Affairs (BNA), for example, a 1 percent increase of worker absenteeism reduces productivity by an estimated 2.5 percent.

     Moreover, the BNA estimates that employers can reduce health costs through comprehensive health and productivity management programs by $1,567 per employee. These types of programs include prevention measures to minimize expenditures for health care expenses, turnover, unscheduled absences, non-occupational disabilities and workers' compensation claims.

     If your company is reluctant to provide CAM as an insured benefit - either as a rider or as a core benefit - there's still another option. HR can contract with a network of CAM providers who offer employee discounts. This type of arrangement shifts the burden of searching for specific practitioners and paying the bulk of service fees back to your employees.

Contract with a network of practitioners.
    At Benicor Associates Inc., the business priority is clear. As an employee benefits consulting firm, executive vice president Karen Clark works with HR executives who are always searching for new add-ons. Their main goal, she says, is to attract and retain the best employees for their companies. That means they expect her to keep them informed about any new and innovative benefit plans and coverage that can enhance their programs. "They want creative and non-traditional benefit solutions and products that are both effective and cost efficient," she says.

     Clark's own 70-employee company is no exception. She says most traditional medical insurance plans and HMOs in her area offer little or no coverage for alternative therapies. Therefore, Benicor and many of its clients have opted to add CAM coverage through Towson, Maryland-based Complementary Care Company (C3), a network of health care practitioners offering more than 50 alternative therapies at fixed rates or 20 percent discounts.

     Founder and co-partner Dr. Michael R. Steinberg says networks such as C3 are slowly emerging. A few years ago, while attempting to build a new HMO in the mid-Atlantic region, Steinberg made a profitable discovery. He wanted his HMO to offer CAM benefits, but he couldn't locate any networks of practitioners. The alternative health care industry, he says, was way behind consumer demand. Because of the disorganized network of providers and inaccessible information delivery systems, he decided to establish C3.

     Given the demographics of CAM users (with most individuals paying out of pocket), Steinberg expected most of C3's clients to be individuals. But today, 90 percent of C3's members are employers and associations. Approximately 30,000 practitioners nationwide provide services under the C3 name. Among the covered treatments are acupuncture, aromatherapy, holistic dentistry, hypnotherapy, infant massage therapy, magnetic field therapy, Tai Chi and yoga.

     C3 charges employers a cheaper rate when they elect to pay for the employees' benefits, rather than offering them as services that employees pay for on their own. For example, a company with 1,000 employees may be charged $36 per family each year instead of $59.

     "Depending on the size of your workforce, the employer gets a greater discount," says Steinberg. Most C3 providers have agreed to charge patients a fixed amount per visit, per hour or per half hour. Those who haven't agreed to a specific fee schedule extend a 20 percent discount to C3 members.

     But considering these options is just the first step. The most important duty for human resources regarding CAM benefits is to ensure the reliability of your employees' health care practitioners.

Avoid liability. Ensure the credentialing process.
    Clearly, each employer has to decide which CAM package is best aligned with its business goals and financial resources. In either case, be sure that you check the credentialing process of your HMO or network of practitioners. This critical process is the employer's best protection against liability, according to attorney Ronald Cooke, a benefits specialist at Los Angeles-based law firm Littler Mendelsohn.

     "The employers' fiduciary obligation is to investigate the providers they're offering," he says. It's no different than contracting with any health benefits provider. That means asking the provider how they obtain, review and verify documentation of the qualifications of health care providers, such as their licenses, certifications, insurance and malpractice history. Remember, it's not the employer's duty to credential practitioners - HR is the one who should ensure the provider is doing a thorough job of it.

     Keep in mind that CAM benefits will fall under the same scrutiny as any other health care benefits - perhaps even more so because of their scientifically unproven results. Susan Hahn, senior health-law analyst with CCH Inc. in Riverwoods, Illinois, says that today's courts have been forcing more accountability on the part of plan sponsors.

     In fact, the U.S. Department of Labor has been influential in limiting employers' current protection under ERISA (Employee Retirement Income Security Act), which articulates employer's fiduciary responsibilities over how a health plan is managed. "Patient protection legislation also has come back through a number of bills in the House and Senate," says Hahn. "Everything we're seeing is telling us that the thrust is toward quality of health services."

     One way for employers and providers to identify unreliable practitioners is to ask CAM providers, "What do you think of conventional medicine?" If you come across a practitioner who is totally antagonistic to conventional medicine, that's a red flag. That individual shouldn't be credentialed, says publisher Weeks. Reliable practitioners usually view themselves as part of a larger system of health care delivery. "You want to find a service provider with a comfortable, conservative streak - ones who know their limits," he says.

     In addition, employers shouldn't advise employees to use complementary or alternative medicine practices. HR's role is to disclose what employee benefits are available - leaving all medical advice to the practitioners. And how likely is it that employers will be held liable?

     Says Michael H. Cohen, attorney and law professor at Orange, California-based Chapman University: "My sense is that employers' liability isn't going to be that great because they're one step removed. It's the insurance company that does the credentialing." Also, complementary and alternative medicine is less invasive than conventional treatments, thereby less problematic, says Weeks.

     Although the Washington, D.C-based National Center for Quality Assurance (NCQA) monitors health standards, there are currently no specific guidelines for complementary and alternative medicine. So groups such as C3 have created their own standards that conform to NCQA's general guidelines.

     Landmark Healthcare Inc., a group based in Sacramento, California, also has established its own credentialing criteria for practitioners such as acupuncturists, chiropractors and massage therapists. The criteria are divided into five categories: minimum professional requirements, accessibility requirements, standards of care and treatment techniques (for example, acupuncturists must use disposable needles only), general requirements and desirable qualifications.

     With these types of professional guidelines, HR should be able to find qualified networks of practitioners, thereby enhancing your overall benefits package.

Wellness serves business strategies.
    All things considered, CAM benefits can be affordable add-ons. It all depends on which route you decide is best for your company.

     The first step, of course, is to survey your employees about their experiences and interest in complementary and alternative medicine. Based on employee interest, HR will have to allocate personnel to do the initial research: What does the CAM industry offer? Will your current HMO add a rider? Should you offer CAM benefits as an insured or discounted benefit? What credentialing process is in place? How will such benefits reduce absenteeism and improve worker productivity? Are potential recruits seeking benefits of this kind? "Any interested organization will need to create some internal competence about CAM," says Weeks.

     Unfortunately, the benefits of CAM still are largely subjective and anecdotal. However, there is a growing body of information suggesting that a significant percent of CAM therapies - at least from the perception of the user - diminishes their use of conventional medical services, according to Weeks. Alternative medicine can also be used as another tool to retain top talent.

     So don't be surprised when you see more and more of your competitors' employees standing on their heads. It's just another way of thinking out of the box.

Workforce, June 1999, pp. 88-100 -- Subscribe Now!