Crowdfunding America’s health care
Putting the “social” in social insurance and the systemic flaws it reveals
Crowdfunding websites are the latest addition to the patchwork quilt of ways Americans pay for health care. Many are forced to turn to these platforms in a last-ditch effort to cover the costs of surprise illnesses and stave off medical debt or bankruptcy.
Sites like GoFundMe, YouCaring, CaringBridge, or Indiegogo’s medical offshoot Generosity are doing big business raising money for those who have nowhere else to turn. For many of these websites, medical fundraising has become the most popular category, and the growth in donations has been explosive. On GoFundMe, users collected $6 million in 2012. By 2016, that number jumped to $930 million for campaigns related to medical expenses. By taking a small percent of each donation and charging small transaction fees, the companies are able to bring in millions in revenue annually.
Booming business for crowdfunding websites demonstrates a fundamental weakness of the American health care system, while emphasizing the role of insurance in the first place. GoFundMe’s CEO describes the company as a “digital safety net.” In reality, they’re a poor stand-in for the role of insurers. Illness and injury are hard to predict, so to shield yourself you pay into a pot of money that subsidizes the care of you or any other contributor who gets sick. Whether you get insurance through your employer, the individual market, or through the government, money and risk is pooled across a large group of people so that no one illness or accident is unaffordable.
The rapid growth of crowdfunding sites suggests they are becoming post hoc insurers. The problem is that funding campaigns are only as strong as your social network. Competing for the limited attention and dollars of friends and family on the internet means many drives fall far short of the dollar amount being sought, leaving patients and families in the lurch. Those in the wealthiest or largest social networks have higher success rates. Others are left to fight for broader attention on the basis of tragedy or rarity, competing in an Olympics of suffering to find sponsorship.
This is not a fault of the website — any money raised is helpful — but they’re not built for this purpose. You shouldn’t need a marketing director to be able to afford your hospital bill. What we need is not “best practices” to get your campaign funded. What we need is a health care system that delivers on its promises.
With Republican control of Congress and the White House, these protections will not come. They propose weakening consumer protections to increase the profitability of insurers. GOP legislation is aimed at decreasing government health costs to serve as a tax break for the rich, not bringing down out-of-pocket consumer costs like insurance premiums. They’ve already targeted subsidy payments to both insurers and customers in an effort to cut down on spending while ignoring patient needs.
Just last month, Facebook launched its own crowdfunding platform. Technology companies have seen the writing on the wall. Without meaningful changes, more and more families will be forced to turn to crowdfunding campaigns as a lifeline to afford medical costs and many will come up short.
