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Not-So-Big Business . . . Yet

Philip Betbeze, for HealthLeaders Magazine, March 12, 2009
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Some providers see integrative medicine as an effective alternative to purely traditional clinical methods. But if you're looking to make a quick buck, it may not be for you.

Linda Lee, MD, believes many therapies outside the realm of traditional Western medicine can positively affect patient outcomes. Just don't call it alternative medicine. Don't call it complementary medicine, either. Both are seemingly interchangeable terms for therapies that involve a mix of traditional Eastern medicine, such as acupuncture, with techniques that aren't necessarily Eastern, such as massage. Lee, a board-certified gastroenterologist who has spent 17 years in varying roles with Johns Hopkins, is convinced such therapies are effective with many of the patients who utilize the Johns Hopkins Integrative Medicine & Digestive Center in Baltimore, where she is the director.

"There are misconceptions with the terms 'alternative' and 'complementary,'" says Lee, suggesting that to some, alternative connotes rejection of Western medicine and complementary means complimentary—in other words, free, which the service is not. "Integrative medicine means enhancing Western medicine," she says, "not rejection of one over the other." Such a program does have the potential to generate financial returns—but it takes some time.

Not cash cows
Many hospitals—especially large academic medical centers like Hopkins—get interested in integrative medicine through a couple of channels, experts say. For one, many influential donors are convinced the therapies work, which has led to a lucrative market in philanthropy. Recently, Allina Hospitals and Clinics and Duke University Medical Center, to name two, have received enormous infusions of donor cash to establish integrative medicine centers, often leading to big bricks-and-mortar investments. As many as 35 such centers are open or are planned. Second, hospital leaders are interested because there is a belief that although such therapies are generally not reimbursed by commercial insurers or Medicare, integrative therapies can serve as a cornerstone to a potentially lucrative cash business.

Allina's program, headquartered at Abbott Northwestern Hospital in Minneapolis doesn't charge patients for its services at all—at least at the inpatient level, says Lori Knutson, a registered nurse and the executive director of the Penny George Institute for Health and Healing. Since the program was initiated in 2003, it has solicited clinical inpatient referrals mostly to treat anxiety and pain. "Medical management has a hard time managing these," Knutson says. Abbott's inpatient program is charged by hospital leaders with positively affecting expenses, quality of care, and patient satisfaction, not to draw revenue. "We're really trying to connect the dots on how integrative services help to minimize events in the hospital that Medicare won't pay for, like falls," she says. "That's what we're typically called in for."

Outpatient care is another story. The hospital opened an outpatient facility in 2004 that became a clinic in 2006. It boasts two physicians, a nutritionist and exercise physiologist, a psychologist, five acupuncturists, and two massage therapists. Whether such centers can bill insurance successfully depends on the state, she says, but the outpatient center has grown its revenue from insurance from about 20% of services to about 80%.

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