Alternative medicine is defined as a wide range of health care practices and therpathies that were not typically included in medical school of western medicine. There is no clear dedinition of what alternative medicine is, but alternative medicine typically consists of homeopathy (like cures like) , chairopractic (a lot of problems stem from a misaligned spinal cord) , acupuncture (stimulation of pressure points with needles helps a patient) , and Ayurveda (Indian pracice that often incorporates religion that focuses on balance). Most alternative medicines are alternative, because they haven't been proven to be effective (homeopathy), some methods seem to work, while other haven't seemed to (chairopartic, Ayurveda), and some can't be tested effectivly for effectiveness (acupuncture).
Homepathy is an alternative form of medicine that has been around for over 200 years and is not a part of mainstream pharmecutical medicine used to treat many types of sicknesses.
The main concepts behind most homeopathic remedies are 2 things "whatever can makde a well person sick, can make a sick person well" or "like cures like". Some of the ingredients in a homeopathic remedy, as presented on Dr Oz, are: deadly belladona for a fever, phosphorus as a cough supressant, toxic Gelsemium for the flu, Pulsatilla for sinus infections, and poisonous nux vomica to cure an upset stomach.
The second and most important concept (for which homeopahy wouldn't exist without it today) is that the active ingredients in these remedies are highly dilluted to the point that the ammount of dillution is measured in factors of 1 part per 100 (which is labeled as 1C and 1 part per 10000 as 2C) of water usually ending up at between 1 part per 1000 and 1 part per 10^60 (thought of as the accepted dose by the founder) or even as highly dilluted as 1 part per 10^200,000. To give you an idea of this, the allowable arsenic in drinking water is 1 part per 10^8, and at 1 part per 10^26, no molecules of the original ingredient remains. In fact homeopathic remedies are actually considered the medicine to have a stronger effect the more times it id dilluted even if modern science will tell us that there are no detetable molecules left of the original ingredient. Several analogies exists between how weak the potency is and one of them is a 12C dilluted substance (1 part per 10^24) would be the equivelant to the pinch of salt in both the North and South Atlantic Oceans.
The Placebo Effect
The Placebo effect is the effect a person gets when a person thinks they are getting a real treatment, but they aren't actually recieving any medicine. It is required in most scientific studies to include a control group that took no drug, which can be compared to the group that actually took a drug. The problem with a large majority of the alternative medicines is that people who take the drug may feel better, because they are recieving treatment even if the actual drug doesn't do anything for their body. To solve this, scientific studies often require a placebo drug that looks just like the original drug, but contains no actual medicine (and in some cases, not even the administer of the drug knows if it actually contains medicine). However, some alternative medicines are harder to test for such as acupunture, because there is no viable way (other than using toothpicks instead of needles) to establish a control group that is distinct from the test group that actually believe they got treated.
How does it work?
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Some of the methods of alternative medicine are actually used right next to tested medicine to make a patient feel better, but some portions of alternative medicine appear to work, because the patient feels that they are getting better often because they relax after they get a "professional's" opinion on what ails them. The majority of the treatments offered from alternative medicine are also generally made for a person to "feel" better than when they came in regardless of whether it actually made their current ailment or concern better. However, the mind can be a powerful tool in making people feel better about their lives and cut down on stress level and depression where modern science has trouble reaching directly.