Connie Roethel and Peig Myota are offering a non-insurance delivery method that would provide patients with consultation services to identify health and lifestyle challenges and determine what outcomes they can expect from complementary medical services. Patients would then be advised as to which complementary therapies or practices may benefit them and have access to a network of prequalified practitioners at a 10% discount.
About 25% of health maintenance organizations (HMOs) and other insurance organizations offer some coverage of alternative or complementary therapies, but unlike Roethel and Myota’s concept, do not include a comprehensive health screening. The insurance model, according to Roethel, also discourages patients from considering the real cost of their own health and expenditures.
"This is not an insurance product," Roethel said. "We actually made a decision to not have an insurance-based model. That model brings with it barriers to care issues, access to care issues and limits to care. It also discourages personal responsibility. With our model, the individual takes responsibility for their health, and going in, has access to a list of fees of all providers."
Perhaps the most analogous business model is a healthcare fee-for-service model that is only recently being reprised in southeastern Wisconsin — a hospital contracting with business directly for health care services. West Allis-based Covenant Healthcare System Inc. announced recently that it will begin soliciting contracts for care directly with businesses. The service provided would not be insurance, but would consist of an agreement to provide care at a discount.
The revenue streams for Complementary Health & Healing Partners (CHHP) — currently set up as a division of Roethel’s existing Mequon-based company, Roethel & Associates, Inc. — will come not only from fees to consumers for initial consultations, but from commissions and/or one-time fees to practitioners.
According to Roethel, who acts as CHHP’s president, and Myota, who is vice president of the company, the focus will not be on alternative medicine, but rather on wellness-oriented disciplines designed to reduce the need for rather than replace visits to an allopathic physician.
The service offering will be heavily prevention-related.
"The biggest health problem we have is exercise," Myota said. "Yoga, tai chi – we know through research that these things lower blood pressure, improve sleep and have other beneficial effects. … It has been proven that $1 spent on prevention saves $3 on treatment."
The program would include chiropractic, acupuncture and acupressure, homeopathy, naturopathy, psychotherapy, massage, cranial sacral, energy healing, nutrition therapy, reflexology, personal training, stress management, guided imagery, tai chi, yoga/pilates, meditation, self-care classes and aromatherapy.
"Most people are aware these are out there," Roethel said. "But they do not know how to find qualified providers."
The fact that the State of Wisconsin certifies relatively few types of alternative or complementary health practitioners, figuring out which providers are legitimate and which are fly-by-nighters can be tough, according to Myota.
"Wisconsin being as conservative as it is, there is not as much certification." Myota said. "In the meantime, the number of alternative and complementary clinics is skyrocketing. Eight years ago, I owned a clinic in Waukesha County. At the time, there were about 10 clinics. Now there are probably about 30 in the state."
One provider who in August signed as part of the CHHP network confirmed that referring the right patients to the right practitioner will be a useful service.
"It is just the right people getting to the right practitioner," Curry Chaudoir, owner of Milwaukee-based Acupuncture and Holistic Health Associates, said. Chaudoir’s five-person clinic contracted with CHHP to work on a percentage basis. "We definitely have people come in and know after an hour and a half evaluation that we can’t do anything for them. We refer them out right away. So it is going to streamline the activity."
The screening and referral process should be mutually beneficial for patients and practitioners, Chaudoir said.
"It makes sure that for the practitioner that the patient is qualified," Chaudoir said. "And for the patient, it helps make sure the practitioner is qualified."
Myota, who had owned Vesta Center for Wholeness in Nashotah, and Roethel, who founded and later spun off Diabetes Shoppe, a national network of community pharmacies dedicated to supplying and educating diabetics, are visiting each clinic or business involved in the program in person and assessing their practices and credentials before accepting them into the system.
Roethel had initially conceived of the new model in January of 2001, but was assembling a network of providers that would deliver services outside of their normal clinical settings — in salons, pharmacies and other venues. Roethel met Myota in March of this year, and they jointly assembled the current plan. The two have been assembling the network of providers since launching the company in May of this year.
The process has been time- and labor-intensive, and more start-up costs will be in the offing before significant cash flow starts coming in.
"There is a lot of personal and financial risk," Myota said. "According to our proforma projections, we would be spending eight months getting into practice environments – seeing where they provide care. We want to have two to three of each category of provider on each side of the city."
Once the network is set up, the work of marketing will begin, including direct mail, business and consumer trade shows and print media.
Myota and Roethel will target both individuals and employers who may offer the plan as either a subsidized or unsubsidized part of their benefits package.
Some therapies included in CHHP’s roster of offerings can be paid for with pre-tax dollars set aside in flexible spending accounts (FSAs), while others cannot.
FSA rules changing
According to Flexben Corp. Wisconsin president Kent Smith, therapies prescribed by a doctor to treat a specific ailment may be reimbursable with FSA dollars.
"The typical guideline is medic necessity," Smith said. "There are things that are cosmetic — such as teeth bleaching or cosmetic surgery — where you are doing it for looks versus a real medical need. There are other things — herbal types of supplements — that if it is not a prescribed medication to treat a specific condition, that is not allowable."
Some recent changes in the types of expenditures employees can use their FSA dollars for may bode well for CHHP. "If you definitely are obese and it threatens your health, part of a health club membership can be paid for by this money," Smith said. "But it must be related to a specific diagnosable condition."
The change is the result of Internal Revenue Service (IRS)-issued guidance released April 2, 2002. The significant change is that obesity is now considered by the IRS as a disease in and of itself, and physician-prescribed weight loss programs may not be reimbursable even without the presence of weight-related illnesses like diabetes.
While most allowable expenditures would be treatment-oriented rather than prevention-oriented, there are exceptions.
"If you do go to the physician for a routine check-up, that would fly because it is a doctor’s visit," Smith said.
So would the screening offered by CHHP be reimbursable? Smith said that would fall into a gray area and would require further investigation.
Some of the specific treatments and disciplines offered by CHHP may not be eligible for reimbursement with FSA dollars, regardless of medical necessity.
According to Flexben compliance specialist Karla Hartay, the further one ventures from the medical mainstream, the less likely FSA dollars can be used to pay for treatment services.
"Alternative healers, dietary substitutes, drugs and medicines," are iffy expenditures, according to Hartay. "Non-traditional healing treatments provided by professionals may be eligible under certain circumstances, but the IRS looks at them very closely. The treatments must be legal. And the expenses are not reimbursable if the remedy is a ‘medicine or drug’ that is available ‘over-the-counter’ or is a food or substitute for food that the person would normally consume to meet nutritional requirements."
Premium savings key
Employers who opt into the CHHP program will probably be more motivated by the possibility that more attention paid to wellness will reduce their premiums.
Scott Rasmussen, senior vice president with Waterstone Group, a technical staffing firm and professional employer organization (PEO) with locations in Green Bay, Sheboygan and Mequon, said the need to push premium savings will be important for CHHP.
Waterstone Group places between 500 and 600 engineers in temp-to-perm positions each year. Their PEO business helps professional service employers with outsourced human resources services -including benefits.
"We have taken all the benefits we have assembled, go to small professional services firms and bring them under our wing of payroll administration, benefit administration and HR services," Rasmussen said. "On both sides of the business, it is a challenge to find great health insurance and great benefits.
"When I heard about Connie’s idea of taking some assessment tools, and some wellness tools that seemed like something that we wanted to consider. For this particular product we would start with the PEO side. It seems very appealing – with what you read about in the industry about what it can do for long-range health costs."
Rasmussen said he is evaluating CHHP as Waterstone Group prepares for the year-end renewal period for its PEO clients’ insurance packages.
Opting into CHHP will require vision on the part of employers, according to Rasmussen.
"Their (CHHP’s) biggest challenge is whether employers pick it up – whether it will do well in terms of acceptance. For the employee, if it is given to them, they are going to take it. But an employer will have to take the long-range view. It might take an employer a few years to see a reduction in their premium."
The promise of that reduction in expense is more important now than it would have been had the product been launched a couple of years ago.
"Two years ago, when it was hard to find employees, I would have said it was a nice service to have," Rasmussen said. "But now that margins are tighter and the ability to find employees is easier, I think the reason employers will go for it is the hope for reduction in insurance premiums."
Flexben’s Smith was intrigued by CHHP’s business model as well, and like Rasmussen, stressed that delivering health coverage savings will be key.
"Certainly there are employers out there that offer wellness-related benefits," Smith said. "But actually bringing in a network, that certainly will be new to this marketplace in general terms. If they can back up what they are trying to do with some actuarial data – there are health care dollars to be saved, that would work. But from what I am seeing in the market, just bringing an idea to the table will not do it. Everybody is looking for hard data to substantiate that they will be able to count on some savings."
Start locally
Roethel and Myota said they would be rolling out the product in the metro Milwaukee area from Roethel’s Mequon office and Myota’s office in Hartland. In time, the business would expand to serve the entire state.
The two RNs said they had discussed seeking some intellectual property protection for their business model, but implied that they would probably allow others to replicate their model should it prove successful.
"We are not interested in cornering the market," Myota said. "It’s not that we don’t want to make money doing this. This is our living. But greed is one thing that is wrong with the current health care model."
Rasmussen was cautiously optimistic on CHHP’s prospects.
"The ultimate test will be the economics," Rasmussen said. "A lot of good ideas get launched. Ultimately, as a business guy, I say it has to boil down to the companies saying that the cost is less if we do this. It is so early – it is hard to judge a trend … The key point is that it is innovative. It really flows into a trend that overall, in society, we are looking at. It is more than just popping pills."
Oct. 11, 2002 Small Business Times, Milwaukee
