HMO to Offer Acupuncture; It May Be First in State to Do So

Signaling the growing acceptance of alternative medicine among American consumers, Lifeguard Health Care, an HMO headquartered in Silicon Valley, said Tuesday that it will begin offering acupuncture treatment as a benefit to its members.

Lifeguard, which has about 212,000 members in Northern and Central California, is believed to be the first health maintenance organization in the state to endorse the use of acupuncture, the traditional Chinese medicine that involves the insertion of thin needles into specific parts of the body.

Although many health insurers now offer chiropractic services to members, insurers--and many mainstream doctors--have been reluctant to accept unconventional therapies such as acupuncture or homeopathy, arguing that there is a lack of scientific evidence demonstrating their medical benefit.

Nevertheless, more than 50 medical schools, including such prestigious institutions as Harvard and Columbia universities, now have courses or divisions in alternative medicine.

A handful of insurers elsewhere in the country have begun offering acupuncture, massage therapy and other alternative treatments because of their popularity with consumers. Supporters say alternative medicine is well-suited to the managed-care industry’s emphasis on preventive health care and cost cutting.

Last fall, Oxford Health Plans, a large HMO in the Northeast, announced the creation of a network of chiropractic, acupuncture and homeopathic providers. Members of the Connecticut-based HMO can go directly to alternative practitioners without prior approval from their primary-care physician. It also offers yoga as an optional benefit.

“I think people are open to the idea that there are other answers to some maladies than just Western medicine,” said Mark Hyde, Lifeguard’s chief executive. “Lots of Western medicine is fairly invasive, and people are looking for other ways to care for their bodies.”

Hyde said the decision to offer acupuncture was sparked by demands from employers, including one large Silicon Valley high-technology company that said it would consider offering Lifeguard to its workers if acupuncture were offered.

“We’ll see if this is a hook in the market that draws new customers to us,” Hyde said. “Competition for employees is intense here in the Valley, so providing them with an additional benefit is really something employers can use to attract and retain employees.”

Hyde said Lifeguard was surprised at the popularity of chiropractic services when it began offering them as a benefit in 1993. About 86,000 of the HMO’s 212,000 members have elected to pay slightly higher premiums to have access to chiropractors.

The acupuncture benefit will be available this summer to Lifeguard members who choose the optional chiropractic package, Hyde said. The acupuncture service will require regulatory approval from the California Department of Corporations.

Lifeguard, based in Milpitas, has a reputation for innovation among California’s HMOs. Hyde has been critical of the HMO industry’s practice of fixed-rate reimbursement for doctors. His company pays doctors discounted rates but, more like traditional insurance, pays them for services rendered.