The Economic Evaluation of Complementary and Alternative Medicine

The growing importance of including naturopathic doctors in healthcare reform

By Setareh Tais, ND, and Erica zoberg, ND, MPH


The use of complementary and alternative medicine (CAM) has steadily grown in recent decades, followed by an increase in insurance coverage for various CAM providers (eg, naturopathic physicians, acupuncturists, massage therapist, chiropractors). However, with rising healthcare costs, insurers and policy makers have expressed concerns about the cost-effectiveness of healthcare, both conventional and CAM. Although more prospective outcome studies are needed to evaluate the cost-effectiveness of CAM, there have been published research studies demonstrating that CAM is cost-effective and may present cost-savings due to inexpensive treatments, lower technology interventions, and its emphasis on preventative medicine. If healthcare reform proceeds in a direction favoring lower-cost approaches, further integration of CAM practitioners, including naturopathic primary care providers, into healthcare delivery systems may be beneficial. Here we review the literature regarding the cost-effectiveness of CAM and naturopathic medicine.


Complementary and alternative medicine (CAM), including naturopathic treatments are becoming increasingly common. The Cochrane Collaboration defines CAM as “all practices and ideas, which are outside the domain of conventional medicine… preventing or treating illness, or promoting health and well being.”1 Reports suggest that between 1997 and 2007, 36% of adults (roughly 72 million adults) used some form of alternative medicine. Out-of-pocket expenditures on CAM therapies are estimated to be $34 billion annually in the United States.2–6 Patients report using CAM for health promotion and disease prevention7,8 and because it is often “more congruent with their values, beliefs and philosophical orientations towards health and life”9 or when conventional medicine cannot cure their chronic medical conditions.10 Furthermore patients have reported using CAM because conventional medicine is too expensive, a concern that coincides with the trend that CAM users are 4 times more likely to be uninsured.11
As the costs of healthcare and prescription drugs rapidly increase each year,12 policy makers are now focusing their attention on the cost of various therapies and providers in the face of a finite healthcare budget and limited healthcare resources. Cost-effectiveness research is necessary to determine the best values for limited healthcare dollars. In 2000 the World Health Organization published a workbook on the economic evaluations of healthcare services.13,14 Several methods are available for evaluating the economic impact of naturopathic and CAM therapies: A cost-benefit analysis (CBA) compares the monetary cost of treatments with the monetary benefit of treatments. Although this makes for easy comparison, it can be challenging to assign a monetary value to a health goal, which is why CBAs are not often performed.15 In contrast, a cost-effectiveness analysis (CEA) compares the costs and health outcomes of competing interventions within a fixed healthcare budget.16 Similarly, a cost-utility analysis (CUA) assesses a common health outcome between 2 competing treatments with a unique focus on the quality of the outcome, known as quality-adjusted life years (QALY).17 Cost-minimization analyses evaluate the costs of competing interventions when health outcomes are the same in order to determine which intervention costs least to achieve the same outcome.18 Health economists, as well as experts in CAM, recommend that economic evaluations use methods that focus on relative costs in terms of patient-centered outcomes, such as QALY.19,20 Just recently, a book was published with guidelines on the best methods by which this could be accomplished in CAM settings.21
One of the challenges in evaluating the economic impact of CAM is collecting comprehensive data on the cost of CAM services and therapies, which are largely paid for out-of-pocket. This particular challenge can be overcome by studying insurance claims in Washington state. Since 1996, the “Every Category of Provider” law (WAC 284-43-205) has required private commercial insurance companies to cover services within their benefit plans whether they are provided by a licensed CAM provider or conventional provider, as long the service is within the provider’s scope of practice.22,23 By studying insurance claims in Washington State, researchers, healthcare policy makers, and insurers may investigate concerns that providing additional coverage may increase healthcare costs. Washington State is also unique in that an estimated 90% of Washington patients seek some form of CAM, with approximately 37% under the care of a naturopathic physician.24–27 Care delivery and associated costs in Washington state can be studied as a model by which other states can learn what to expect if CAM providers and CAM services are broadly included in healthcare reform.
As the debate over managing rising healthcare costs and improving access to quality primary care commences, the stage has been set for a historic change in the American healthcare delivery system with the re-election of President Obama and the passing of the Patient Protection and Affordable Care Act (PPACA). The intent of the PPACA is to increase access to healthcare, lower costs, and improve quality of care by expanding health insurance coverage, encouraging the use of preventative medicine, and rebuilding the primary care workforce.28 Section 2706 dictates non-discrimination among healthcare providers, specifically listing complementary and alternative medicine providers. While this allows for interpretation that provides for the inclusion of naturopathic physicians (as do several other key sections of the legislation), it remains to be seen if state-level rule making will remain consistent with the intent of the law. A review of the literature on care delivery and associated costs in patients treated by CAM providers and naturopathic physicians can shed light on what can be expected if these providers and services are broadly included as intended in the language of the Affordable Care Act.
With the increasing popularity of CAM, policy makers and insurers invested in addressing the rising cost of healthcare should work to ensure that implementation of the Affordable Care Act proceeds as intended (inclusive of CAM providers).

The Economic Evaluation of Complementary and Alternative Medicine

Cardiovascular disease
Cardiovascular disease (CVD) is the leading cause of death in the United States29 and is extremely expensive to manage in terms of direct medical costs (medical services) and indirect costs (lost productivity from work absenteeism and presenteeism). A 2007 United States National Health Interview Survey demonstrated that CAM users are attracted to CAM for its emphasis on prevention. This is noteworthy because the same survey demonstrated that CAM users possess many modifiable cardiovascular risk factors, such as hypertension (18%), hyperlipidemia (20%), obesity/overweight (54%), prediabetes/diabetes (9%) and tobacco use (17%).30 Recently a trial was conducted to evaluate the naturopathic approach to CVD prevention and to determine the cost-effectiveness of such an approach.31,32 The study found that after 1 year of naturopathic care, there was a 3.3% reduction in 10-year CVD event risk, based on equations developed in the Framingham heart study (NNT = 30).33 This resulted in an average net reduction in societal costs by $1,138 per participant and a reduction in employer costs by $1,187 per participant compared to usual care alone. The majority of cost savings were attributed to reductions in losses due to presenteeism (reduced productivity while at work). The only CVD intervention known to be of lower cost is daily aspirin.34, 35 The study had noteworthy strengths: participant retention was high (91% and 88% for participants receiving naturopathic care and usual care, respectively), missing data was thoughtfully addressed using multiple statistical methods, interventions were evidence-based, and electronic claims and absenteeism data were available for use. Limitations include the reliance of self-reports to track the use of natural health products and presenteeism. In addition, some of the natural health products used in the study (and factored into the cost analysis) were offered to participants at a discounted rate, possibly lowering the cost of naturopathic care; however the cost of these products was representative of prices available elsewhere.
Diabetes prevention 
A cost-effectiveness analysis was conducted to assess the effects of metformin or lifestyle modifications in preventing type 2 diabetes in adults with impaired glucose tolerance.36 In the study, 3,234 adults with impaired glucose tolerance were randomly assigned to receive metformin (850 mg twice daily), to participate in a lifestyle medication program (designed for 7% weight loss through lower fat intake and 150 minutes of exercise per week), or to receive placebo. The study found that compared to placebo, metformin reduced the incidence of diabetes by 31%, while lifestyle modification reduced the incidence of diabetes by 58%. Using base case analysis, the researchers estimated that compared with placebo, lifestyle interventions delay the onset of diabetes by 11 years while metformin therapy delays the onset of diabetes by 3 years in those with impaired glucose tolerance. The lifestyle modification program would cost $8,800 while metformin therapy would cost $29,000 per QAYL saved. Additionally, the lifestyle modification program was shown to be cost-effective in all adults, while metformin was not cost-effective after age 65. Limitations of the study include the use of volunteer participants, who may be more motivated than nonparticipants. In addition, because researchers cannot study all clinical interventions or measure disease progression over a lifetime, the authors relied on several models to estimate future costs, quality of life, and health outcome data. Researchers concluded that compared to metformin, the lifestyle modification program cost less and resulted in better health outcomes. Lifestyle interventions as a preventative measure in pre-diabetic patients should be employed to curtail the high cost of treating diabetes and also to reduce the rising incidence of diabetes. Healthcare providers knowledgeable in encouraging and supporting patients in adopting long-lasting health-promoting lifestyle modification are needed to address the current diabetes epidemic.
Cancer prevention
In 2009, researchers in Washington state looked at insurance data to determine the use of adult preventive screening services among female CAM users.37 Patients who were using CAM in conjunction with conventional care had increased rates of cervical cancer screening using Papanicolaou testing and breast cancer screening using mammography. The survey also found that patients under the care of a naturopathic physician reported improved health compared to the previous year. Of concern, authors found that CAM users were less likely to receive routine chlamydia screening; however, one of the limitations of collecting data from insurance claims alone is the inability to identify all sexually active, insured women. Nevertheless, the negative correlation between CAM use and chlamydia screening warrants further investigation given that chlamydia is often asymptomatic and can result in serious health consequences if left untreated. The authors also found that patients under the care of a naturopathic doctor were less likely to receive mammography (compared to patients under the care of other CAM providers). Although this does not necessarily mean that CAM providers are less likely to recommend mammography, one possible reason for this trend may be that patients who seek naturopathic care are more likely to be concerned about risks of radiation. The study findings suggest that women who use CAM in addition to conventional care may be more engaged in health-promoting activity. This coincides with prior studies demonstrating the trend that CAM users are more likely to engage in healthy behaviors like regular exercise,38 healthy dietary choices,39 and nonuse of tobacco.40 Given the fact that Americans are currently receiving only half the recommended screening services,41 one of the goals of healthcare reform is to increase access and coverage of preventative services. CAM providers and naturopathic physicians should identify barriers to health screenings and should continue to encourage their patients to receive appropriate preventative services.
Back pain 
A small cost-effectiveness analysis (n = 70) was conducted on the naturopathic treatment of chronic low back pain in 75 warehouse workers in a large American corporation.42 For the purpose of this study, naturopathic treatment consisted of a specific 3-month protocol of acupuncture, relaxation training, exercise, dietary advice and written education on back care; it was compared to a 3-month standardized physiotherapy program consisting of written education on back care. Naturopathic care was associated with a statistically significant improvement in symptoms and quality of life, as well as a decrease in costs by $1,212 per study participant. Workplace absenteeism was also reduced by 6.7 days (95% CI: -4.8, -8.6). The authors conclude that naturopathic care was more cost-effective than a standard physiotherapy plan.43 Limitations include lack of measuring presenteeism (productivity at work), which could likely increase cost savings in the study intervention group. In addition, because naturopathic care was provided on-site during work hours, the cost of travel and childcare was not included in the analysis. Lastly, participants expressed a strong preference for naturopathic care with higher retention rates in the naturopathic care group compared to the control group (82% and 22% at 6-month follow-up).
Surveys have found that most patients with fibromyalgia syndrome (FMS) are using CAM, with 1 report estimating 37% are under the care of a naturopathic physician.44 Part of the attraction to naturopathic medicine may be attributable to psychosocial benefits, such as an increased sense of hope,45 empathy and listening skills of CAM providers, and visit lengths sufficient to attend to these psychosocial dimensions.46–48 In 2007, researchers at the University of Washington analyzed insurance claims to evaluate healthcare expenditures in patients with FMS under the care of conventional providers and CAM providers.49 The study found fibromyalgia patients who used CAM were in poorer health and had more frequent medical visits (mean ± SD) (34 ± 25) than those seeking conventional care (23 ± 21, P<0.001); however despite the increased morbidity and more frequent CAM office visits, overall annual healthcare costs were similar for patients under the care of a CAM provider ($4,638 ± $9,660) than those who did not use CAM ($4,728 ± $10,564, ns), likely due to the lower cost of care per visit with a CAM provider. Interestingly, the authors repeated their analyses but restricted the FMS group to those with at least 2 (instead of 1) ICD-9-identified claims for FMS during the year. Using this new definition, CAM users had a statistically significant lower annual expenditure than FMS patients who did not use any CAM ($4,390 vs. $5,535, P<0.001). Either way, CAM did not increase healthcare cost but may have produced a small cost savings (possibly by replacing the use of more expensive conventional services). In a subset analysis of pharmacy claims, fibromyalgia patients under the care of a CAM provider had fewer pharmacy claims (20.4 vs. 26.6, P< 0.001) and lower pharmacy expenditures ($1,914 vs. $2,346, P=0.002) than patients who did not use CAM. The authors conclude that in chronic, debilitating conditions for which conventional medicine cannot offer a cure (such as FMS), “CAM providers may offer an economical alternative for FMS patients seeking symptomatic relief.” They further suggest that coverage of CAM by government programs such as Medicaid would not increase healthcare expenditures and may actually lower them in sicker patients who require more visits per year.50 Limitations of the study include lack of randomization of CAM use (which can create self-selection bias), the relatively short time period (1 year) of care from which claims were collected, and that data analysis did not adjust for confounding demographic characteristics like education and race. Additional long-term studies on the cost-effectiveness of naturopathic treatments for fibromyalgia are warranted.
Functional bowel disease
Functional bowel disease (FBD) refers to a group of chronic bowel disorders of a physiologic origin (irritable bowel syndrome, functional diarrhea, functional constipation, and functional abdominal pain). Roughly 30 million people in the United States meet the diagnostic criteria for irritable syndrome (IBS) alone, and FBD is associated with high healthcare costs and more frequent healthcare visits.51, 52 Conventional treatment strategies are limited for mitigating symptoms. Recently, the cost and perceived effectiveness of CAM was studied in 1,012 patients with FBD over a 6-month period.53 Patients from a healthcare maintenance organization were followed for 6 months, using questionnaires that assess symptom severity, quality of life, and utilization and expenditures on CAM (limited to herbal medicines, homeopathy, hypnotherapy, massage, yoga, biofeedback, and acupuncture). The cost of conventional medical care was ascertained from administrative claims. The study demonstrated that 35% of patients with FBD in this HMO used a CAM therapy, at a median annual cost of $200 per participant (ranging between $40 and $2,000), which was equivalent to the median annual cost of over-the counter drugs ($200) and roughly a third the cost of the median annual cost of prescription drugs ($533). Visits with naturopathic doctors were not considered in this study. Another explanation for the seemingly low median cost of CAM among study participants is that the most commonly used CAM therapy reported was ginger (14%). The annual out-of-pocket cost of CAM was only 5% the cost of conventional HMO expenses ($3,536 per participant), although the authors do not describe what is included in their calculations of HMO healthcare expenses. The cost of conventional care was similar between CAM and non-CAM users. Sixty percent of CAM users and 64% of non-CAM users perceived their respective treatment as effective and were satisfied with the relief of their bowel symptoms at follow-up; CAM users appeared to experience more severe symptoms at baseline.54 This study demonstrated that among patients with IBS, CAM users were more likely to have more severe symptoms than non-CAM users but that the cost of CAM was equivalent to expenditure on over-the-counter drugs and a fraction of the cost of conventional provider-based care. There were several limitations of the study: The authors chose to ignore the use of probiotics and fiber, suggesting that these are “more likely considered a part of conventional care,” and only insurance claims billed under conventional providers were used. Further studies on the cost-effectiveness of the naturopathic management of FBD are needed.

Natural Health Products

In 2007, a systematic review of randomized controlled trials on natural health products (NHPs) was performed.55 NHPs are defined as vitamins, minerals, herbal medicines, homeopathic remedies, probiotics, amino acids, and essential fatty acids.56 In the systematic review, pooled searches of various databases uncovered 585 original studies; however only 9 of these studies included a cost evaluation and excluded populations with a known nutritional deficiency. Eight of these 9 studies showed that when a NHP was included in a medical intervention, there was both a positive health outcome and a cost savings. Three of these studies showed that perioperative parenteral nutrition in critically ill patients resulted in a reduction in postoperative complications and a concomitant reduction in hospital-related costs.57–59 Two studies on gastrointestinal disorders60,61 and 1 study on urinary tract infections62 showed that the addition of a NHP resulted in a 19%–73% reduction in costs. Two studies on cardiovascular disorders demonstrated that supplementation with vitamin E both improved health outcomes post-myocardial infarction and resulted in a cost savings,63 while supplementation with essential fatty acids significantly improved health outcomes but did not result in a cost savings.64

The Cost of CAM Use by Insured Patients in Washington State

In 2010, an extensive cost-minimization analysis of healthcare expenditures by insured patients in Washington State was performed.65 As mentioned previously, CAM utilization in Washington State is of particular interest because the broad inclusion of CAM provides a test case for what could be expected nationally if licensed CAM providers were included in federal-level healthcare reform. Data were collected from insurance claims from visits with both CAM providers (naturopathic physicians, chiropractors, acupuncturists, and massage therapist) and conventional providers (medical doctors, osteopathic physicians, advanced registered nurse practitioners, and physician assistants) for back pain, fibromyalgia, and menopause. Using linear regression models, researchers concluded that CAM users with low back pain, fibromyalgia, or menopausal symptoms had lower average expenditures compared to non-CAM users ($3,797 vs $4,153, P=0.0001). The most impressive difference in expenditures was seen in patients with the highest disease burden, wherein patients with the poorest health cost an average of $1,420 less annually if they were CAM users compared to those who were under the care of conventional providers exclusively (P<0.0001).66 However, one of the limitations of using a cost minimization analysis to evaluate costs is the assumption that health outcomes are equivalent and that interventions are equally efficacious. Lower average expenditures for CAM users do not necessarily correlate with equal amounts of effective care or equivalent perceived satisfaction with treatment. From the perspective of third party payers, the use of CAM may result in cost savings in patients with back pain, menopausal symptoms, and fibromyalgia; however, additional studies are needed to address the economic impact of CAM from societal and patient perspectives.

A Systematic Review of Economic Evaluations of CIM

An extensive systematic review was conducted on economic evaluations of complementary and integrative medicine (CIM) published between 2001 and 2010, resulting in 204 research studies that contained economic evaluations of CIM.67 The proposed objective of the study was to establish the extent of publications of research studies conducting economic evaluations on CIM. The authors found that the biggest concentration of evaluations (19 studies) involved manipulative (chiropractic and osteopathic techniques) and massage therapy for low back pain, although the studies were notably diverse in terms of therapies used and the nature of back pain treated (acute vs chronic). Of the higher quality studies, 29% were cost-saving, meaning that the addition of a CIM therapy resulted in lower costs than usual care alone. Some examples of cost savings were seen for acupuncture in reducing breech presentation in the Netherlands,68 acupuncture for low back in the United Kingdom,69 manual therapy for neck pain,70 vitamin K for preventing osteoporotic fractures,71 and adjunctive use of antioxidants for preventing cataract formation.72 The paper nicely summarizes the types of economic evaluations conducted. The incremental cost effectiveness ratio of 31 of the higher-quality articles was identified: 13 acupuncture studies, 5 physical medicine studies (massage therapy, osteopathic manipulation, and chiropractics), 9 studies using natural health products, 1 study using tai chi, 1 naturopathic care study, and 2 studies using spa-exercise therapy. The authors described the challenging nature of defining a search strategy for CIM as there is no universally accepted definition of CAM/CIM; the authors also note that 20% of the articles included in the study were identified through bibliographies and article lists obtained by CIM researchers.


The United States healthcare system is not only grappling with rising costs but it is also facing an undeniable shortage of primary care providers, with an estimated projected shortage of 52,000 primary care doctors by 2025.73,74 Given that an estimated 46 million Americans do not have access to healthcare due to financial, physical, and geographic barriers,75,76 increasing access to cost-effective primary care is imperative.77 With the increasing popularity of CAM, CAM providers' orientation toward health promotion and prevention, and the growing body of research demonstrating the cost-effectiveness of CAM, policy makers and insurers invested in addressing the rising cost of healthcare should work to ensure that implementation of the Affordable Care Act proceeds as intended (inclusive of CAM providers). While naturopathic physicians are often lumped into the designation of CAM provider, it is important to note that they are also trained (and licensed in several states) as primary care doctors known for emphasizing health promoting activities and disease prevention.78,79 Language in the Affordable Care Act provides for including naturopathic primary care providers in the creation of medical homes; doing so would be prudent in light of current statistics that only half of Americans are receiving recommended preventative care services.80
A notable limitation of this review is that the economic evaluations presented were conducted from a variety of perspectives (patient, payer, society). What is cost-effective from one perspective many not be from another perspective. Additional prospective studies are needed to assess the cost-effectiveness of naturopathic medicine. Future studies should focus on economic evaluations conducted from the societal perspective in order to provide more information to policy makers regarding the economic impact of adding more coverage for CAM and naturopathic medicine services. Unlike Herman et al’s recently published systematic review, this review was not a systematic review and therefore is subject to author bias. Also unlike Herman et al’s systematic review, we focused our attention on naturopathic medicine and services provided by naturopathic physicians, the only CAM providers trained in comprehensive primary care services. If healthcare reform proceeds in a direction favoring lower-cost approaches, rebuilding the primary care work force and promoting preventative medicine, further integration of CAM and naturopathic primary care providers may be beneficial.

About the Authors

Setareh Tais, ND, is a naturopathic doctor practicing general family medicine with a focus on integrative family medicine and reproductive health in Fresno, California. She received her doctorate of naturopathic medicine from Bastyr University, Kenmore, Washington,  and completed a naturopathic family medicine residency program with additional training in reproductive endocrinology and infertility. She is the president of the California Naturopathic Doctors Association, a founding board member of the Endocrinology Association of Naturopathic Physicians, and a member of the American Association of Naturopathic Physicians. For more information about her practice, please visit and for more information on naturopathic reproductive endocrinology, please visit

Erica Oberg, ND, MPH, directs the Center for Health Policy & Leadership at Bastyr University. She has been involved in CAM health policy for over a decade, including past service on the Boards of the Washington Association of Naturopathic Physicians, the Naturopathic Physicians Research Institute and currently the Integrative Health Policy Consortium. She has worked with numerous state health departments, federal committees, and nonprofits representing CAM disciplines and the role of health promotion and prevention in public health policy. She is also a primary care provider and practices her own health through gardening, water sports, and cooking healthy food. 


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