Complementary and alternative medicine (CAM) has gained increasing ground in recent years, with the alternative healthcare provider market growing to around $12B according to IBISWorld, as U.S. consumers move further and further away from a medical hierarchy looking to treat every problem with either pharmaceuticals or surgery alone. This trend is also spurred on by the continuing rise of healthcare costs that are increasingly unaffordable for the average American. In May this year the U.S. Commerce Department’s Bureau of Economic Analysis even indicated that Q1 healthcare spending spiked 9.9%, the biggest quarterly jump in over three decades.
With spending set to rise further under Obamacare and estimates showing as many as 11M more Americans will get coverage this year under the program, jacking up health spending by a whopping 6.1% according to the Centers for Medicare and Medicaid Services (CMS), the University of Washington study showing decreased insurance expenditures among back pain, fibromyalgia, and menopause patients who chose CAM for some percentage of their care comes into sharp focus. Such a fusion of CAM with conventional medicine is known as integrative medicine and is focused on healing the whole patient and fostering a wellness lifestyle through preventative therapy, not just trying to fix the body when it is broken. The CMS figure for national healthcare expenditure next year is just under $3.3 trillion and their 2022 projection of $5T is in-line with Deloitte’s own $4.6T figure for 2020, with the underlying metrics supercharged by some 10k baby boomers retiring per day, who control approximately 70% of the total disposable income of the U.S. and also represent more than half of the nation’s purchasing power (as well as consumer spending).
Rapid adoption of medical marijuana (MMJ) legislation in 23 states and D.C. has led to some exciting commercial statistics for the domestic market, with ArcView data pegging the retail space at $2.34B this year and Marijuana Business Daily projecting a roughly 200% or more jump over the next four years, to around $8.2B. Strong growth among sector hardware suppliers like Terra Tech Corp. (OTCQB:TRTC) and Neutra Corp. (OTCQB:NTRR), which is partnered with Vertigo Technologies for indoor horticulture and also focused on developing a range of all-natural wellness and nutraceutical supplements for the health practitioner/consumer markets, has created a sizeable opportunity for investors.
The work being done in Cannabidiol (CBD) in particular is drawing increased attention, as companies like GW Pharmaceuticals (NASDAQ:GWPH) see growing uptake of their Sativex® treatment for Multiple Sclerosis and smaller players like Earth Science Tech, Inc. (OTC:ETST) move to satisfy the broader demand curve for CBD (which has shown compelling results in pain-relief, as well as anti-inflammatory and immunodulatory roles), with products like their non-psychoactive, food-grade, CBD-enriched hemp oil that is fully legal in 50 states. Supplements in general often form a large portion of alternative treatments and so it is little wonder then that the U.S. nutraceutical market as a whole is on-track to maintain a 5% CAGR over the next four years, hitting around $75.9B by 2018, according a new report out from Research and Markets.
MMJ & CAM Cost-Saving Insurance Network
Novus Medical Group, a wholly-owned subsidiary of Novus Acquisition & Development Corp. (OTC:NDEV), is busy fleshing-out what seems like a potentially winning strategy to exploit the aforementioned market dynamics, in the form of their Novus MedPlan insurance program, a distinctive cost-savings provider network model that will offer consumers up to 50% off on a range of wellness products and services. While still focused squarely on the MMJ and CBD-based treatment markets, Novus recently moved to expand into the larger integrative and holistic medicine space via a partnership with LifeGuard Wellness Clinic, a leading provider of a wide range of integrative medicine options to the greater Phoenix area.
LifeGuard Wellness’ Dr. Nathan Vitaro and Novus Medical Groups’ President and CEO Ms. Andrea Lopez recently sat down with Cannabis Financials Network to discuss the recent partnership in this exclusive executive interview.
After six years of having MMJ legislation on the books in Arizona, the road towards blanket legalization is now open and the Marijuana Policy Project of Arizona has even begun the process for getting an initiative to this end on the 2016 ballot. Arizona, one of the initial roll out states for Novus MedPlan, is a superb state for continued expansion of the program’s provider network and amply highlights the underlying cultural and logistical overlap between the MMJ and integrative medicine markets. The kind of individualized treatment with a holistic approach offered by LifeGuard Wellness Clinic also checks nicely with Novus’ own patient-focused approach. Furthermore, Novus’ first-mover advantage in MMJ insurance, due largely to the federal regulatory situation making big insurers reluctant to offer anything similar, is reinforced by being grounded in the already widely accepted integrative medicine market.
Access To Larger CAM Market Aids MMJ Expansion
Expanding the Novus MedPlan network across the country, somewhat on the back of the growing popularity of the integrative medicine and wellness markets, is a great pathfinder strategy for Novus’ core MMJ/CBD insurance business. Getting boots on the ground via wellness ahead of prevailing MMJ legislation in various states not only primes Novus MedPlan for success in the MMJ sector, as laws regulating consumption continue to soften across the country, it gives the company a nice fallback position should the winds of change suddenly reverse for some unforeseen reason at the federal level. Something which remains a risk factor for the sector, despite the current administration having been deliberately lax on enforcing federal Controlled Substances Act regulations on marijuana, opting instead to allow states to develop their own policy frameworks, so long as they are comprehensive and meet with the goals of federal oversight when it comes to use and distribution.
Holistic practitioners like LifeGuard are able help patients get the most value for their alternative medicine dollar, delivering the expertise required to select the best and most effective treatments, as opposed to the consumer trying to make sense of an increasingly complex array of over the counter treatments and/or supplements. This is a key cost-saving and even time-saving advantage in a market where the highest quality supplements with the best ingredients can be quite expensive, and LifeGuard will be able to offer a wide range of affordable treatment options to Novus MedPlan members, from bioidentical hormone replacement and their full suite of nutritional offerings, to specialty lab testing, pediatric care, and naturopathic treatment.
The growing Novus MedPlan network is shaping up to be a one-stop-shop for MMJ and integrative medicine consumers who want to reduce the potentially exorbitant costs often associated with Big Pharma, which some feel is replete with often dangerous or debilitating synthetic drugs, many of which are highly addictive or come with other troubling side effects. This regrettable situation is particularly true when it comes to pain management, where MMJ continues to wrest market share from the pharmaceutical companies, amid a growing epidemic of prescription drug overdose deaths that has prompted the American Academy of Neurology to issue a position paper calling for a major shift in the way pain is treated and the way prescriptions are done. Novus MedPlan is currently open to pre-enrollment with an easily affordable $19.95 per month for individual plans and the company is looking to woo consumers by waiving any set-up fees for signups before October 15, as well as providing those who sign up early a free month of coverage.
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