Hobbled with Medical Bills, Americans Turn to Crowdfunding

Once the province of independent film-makers, rock bands, and start-up entrepreneurs, crowdfunding has now become a vital mode of financing healthcare for thousands of ordinary American families who lack insurance or savings.

This contemporary form of solicitation involves the collection of many small contributions from a large online network. People worldwide are using websites like indiegogo.com, kickstarter.com and others for an astonishing spectrum of endeavors, from financing education to bootstrapping business ventures, to launching charities.

Use of crowdfunding to pay for healthcare needs is a relatively new development. Through online campaigns, patients—or their families and friends–are raising funds to help cover expensive medical treatments or procedures, in some cases avoiding bankruptcy.

Crowdfunding is an easy, efficient, inexpensive way to draw resources from a very wide potential donor pool. Crowdfunding sites typically require users to set clear fundraising goals and develop video and written content to explain the nature and objectives of the campaign. They also provide back-end tools for promoting the campaign and tracking donations.

With appeals like “Support Little Jonah’s Family During Heart Surgery” or “How hard would you fight to extend your time with your family?” or simply “Help Drew Breathe,” health-related campaigns are usually direct, personal and emotionally forthright. Funding targets range from as little as $2,000 to as much as $265,000 or more.

A Virtual Safety Net

With medical care costs on the rise, it’s perhaps no surprise that tech-savvy consumers have turned to the internet for support. Unpaid medical bills are the top cause of personal bankruptcy in the US, and researchers at the City University of New York project report that even after this year’s implementation of national healthcare reform, “many families will remain just one serious illness away from bankruptcy.”

As millions of Americans struggle with medical debt, crowdfunding offers a creative, low-cost way for consumers to pay their healthcare bills or fill gaps in their insurance coverage.

There are a number of sites like GiveForward, GoFundMe, YouCaring, GoGetFunding and FundRazr, that cater specifically to health-related issues. Individuals can create campaigns to request financial support for themselves or for others.

These sites are businesses, not charities. Some collect between 5-12% of all donations; others require campaigners to meet the fundraising goals they’ve set before they can receive their money.

Would-be crowdfunders are encouraged to research their options to choose a site that best fits their needs. Many of the websites also connect with social media platforms like Facebook and Twitter, allowing users to instantly share their cause with an online community friends and family. The larger a person’s social network, the broader the reach of his or her campaign—a key factor in its overall successfulness.

From Cancer Care to Disaster Relief

People are using crowdfund sites for a broad range of health-related expenses, including cancer treatments, surgeries, and outstanding medical bills. They’re also raising money to support natural disaster relief efforts and medical treatment for victims of recent tragedies like the Aurora movie theater shooting and Boston Marathon bombings.

Some campaigns support emergency medical relief in war-torn areas like Gaza, or for ongoing care of wounded military veterans and their families.

Proponents of medical crowdfunding hope it will remove the “charity case” stigma that dissuades people from requesting or providing critical financial support to loved ones in need.

Stigmatized or not, the phenomenon is clearly telling us something about the state of healthcare coverage in this country. It underscores the fact that many Americans are simply unable to pay for needed care. Though generally accessible, crowdfunding clearly favors people with good computer skills and large networks of online “friends.”

It may be beyond the reach of people without access to computers, or who have limited online social support.

Global Reach

Whereas some crowdfunding sites focus solely on private healthcare needs, others promote innovative medical research. Sites like Experiment and Consano allow donors to contribute to scientific research by selecting from a list of promising but underfunded projects.

There’s also another subset of sites focused on international healthcare for the impoverished. Humanitarian nonprofits such as Possible and Watsi offer a global funding platform through which donors can fund medical treatments for people with desperate needs in Nepal, Cambodia, Kenya, Guatemala and many other countries where access to modern healthcare is severely limited.

All contributions made through these sites go directly towards funding healthcare needs like medical testing and treatments, safe births, nutritional support, and transportation to and from medical appointments.

Advocates view this as a powerful tool for breaking the global cycle of poverty by providing access to quality healthcare for the world’s poor.

Still other crowdfunding campaigns are focused on raising start-up capital for healthcare related companies. One of the most successful of such efforts was by μBiome, a California start-up that raised more than $350,000 on Indiegogo for an open-source, “citizen science” project aimed at mapping and cataloging the human microbiome.

Scanadu, a company that manufactures tiny mobile device that monitors vital signs and transmits them via smartphones, raised nearly $1.7 million via crowdfunding.

The collection of many small contributions from a wide audience is not a unique concept—but new technology has expanded it to a much larger scale. Unlike paper mailers or television solicitations, crowdfunding works because it fosters personal connection between donors and patients.

Through their sites, users can share status updates, stories, pictures, and private messages with their contributors, which helps patients build strong relationships with their funders. This sense of connection is mutually beneficial—both for funders who see the results of their contributions, and for patients receiving healing support from friends and family.




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