How are mushrooms typically processed and what is the most effective way to take them to receive the medicinal benefits?

Medicinal mushrooms are by far most commonly used in traditional Chinese/Eastern medicine. In this type of practice, the sclerotia and fruit bodies of the mushrooms are primarily harvested and used. Often times, a heavily concentrated concoction is created from the mushrooms through boiling them down in water, which is formally called decocting. The resulting decoction is similar to a tea and is considered a fast acting way to receive the benefits of the mushroom. Boiling the mushrooms down also breaks down their cellular walls, which allows for better absorption when consumed.  

This is a typical way for most mushroom extracts to be made, since hot water removes the water soluble polysaccharides, while the ones that are heat resistant still remain. The extract is then placed on a carrier material, vacuum dried, or spray dried.  What remains of the mushroom after the boiling process is later discarded. Interestingly, reishi mushroom extracts are usually produced using a water and alcohol blend because it is rich in terpenes, which are not water soluble. Generally, the fibrous reishi is cooked between two and three times in order to get the full nutrients of the mushroom.

Another method of extracting medicinal components from mushrooms is through fermentation technology or submerged culture of mycelia. This practice is usually performed by scientists and pharmaceutical companies in China and Japan in order to produce antibiotics, as well as refine polysaccharides from mycelia. This more scientific process is highly controlled, efficient, and usually results in an extract very concentrated with specific medicinal compounds.