Will Uncle Sam Pay For Your Yoga?

There are so many delicious subtleties that complicate the health care debate. A new study out from the National Institute of Health raises another: alternative medicine. Presumably, procedures like acupuncture and preventative measures like Tai Chi are not at the top of Congress' list of coverage priorities. But alternative medicine continues to grow in popularity. According to NIH, $34 billion was spent, out-of-pocket, on alternative medicine in 2007. How might that impact the healthcare debate?

First, here's that report in case you're interested in all the details (opens .pdf). It contains this nice pie chart, providing a breakdown of how that $34 billion was spent:

alternative med pie chart.PNG

$34 billion might seem like a lot. But according to NIH, it's really just a drop in the bucket -- only 1.5% of total health-care expenditures in the United States. But it's a much larger portion of out-of-pocket expenditures: 11.2%. That's because a lot of health care insurance plans don't cover alternative medicine.

Unfortunately, the report did not provide information about how many Americans rely solely on alternative medicine. But an NIH spokesperson directed me to another report (opens .pdf) about alternative medicine released in late 2008 that has some interesting statistics. Of those under 65 years of age who used alternative medicine in 2007, 31.5% were uninsured. That's a pretty large segment of alternative medicine users, especially considering that only 18% of Americans are uninsured.

A few interesting observations could be drawn from this. One is that some of those people likely do not have health insurance by choice, as they prefer alternative medicine and know that it will not be covered by health insurance anyway. How large a percentage of the population is that? Well, it's hard to know for sure, because the report doesn't track it. But in order to satisfy these individuals' health care needs, a government plan would have an alternative medicine option.

You can also do an interesting and easy calculation to determine the percentage of uninsured Americans who use alternative medicine. For that same age group (under 65), around 40% of Americans used alternative medicine. Since 31.5% of them did not have health insurance, that means 12.6% of the population has no insurance, but uses alternative medicine. So of the 18% of the population that doesn't have insurance, two-thirds of those people use some form of alternative medicine.

Clearly that 12.6% consists of two kinds of people. The first group is people who actually prefer alternative medicine, so don't bother with insurance that doesn't cover it. The second group is people who would like mainstream treatment options but can't afford health insurance so settle for alternative medicine.

The latter report also sheds a little light on who is who. It says 46.1% of those polled "did not receive conventional care because (they) could not afford it." Unfortunately, you can't use that to calculate a portion of the 12.6%, because it's impossible to tell what portion of that 46.1% was uninsured. If you assume all of them, then that would imply zero people do not have insurance because they prefer alternative medical care. I doubt the number is that low, but these statistics do suggest it can't be very high.

Still, if Congress manages to pass some form of healthcare reform, I'll be interested to see how alternative medicine is treated. After all, 4 out of 10 Americans are using it.