How to Best Use Crowdfunding to Pay for Medical Expenses

This article was first published on LinkedIn on September 16, 2019.

According to a recent article from The Wall Street Journal, “How to Make Health-Care Crowdfunding Work for Everyone,” about a third of the dollars raised on the platform GoFundMe in 2017 were for health care. It’s a sad state of affairs when Americans have to appeal to friends, family and strangers to help them pay their medical bills. We all know that low-income Americans are more susceptible to catastrophic financial events, like unexpected medical bills, than everyone else. But siphoning off dollars from one crowdfunding campaign to give to another, as suggested in this article, is misguided.

The most troubling aspect of this idea is that we need it at all. The root cause of health care-related crowdfunding is the astronomical, nonsensical medical bills that many of us receive. We need to quadruple down on efforts to provide more realistic and transparent pricing so people, regardless of their income level, don’t receive these types of bills.

With regard to the bill itself, most hospitals will use what’s called a sliding fee scale when determining what a patient owes. This may not happen at all facilities, and it probably won’t be incorporated in the first bill that a patient receives. However, patients are encouraged to communicate with the hospital’s billing department to get their charges reduced. It is not an easy process. But if an individual is going to ask others to pony up their hard-earned dollars to help pay for their medical expenses, then they have a responsibility to do whatever they can to ensure that their bill is as low as possible. Doing so reduces the overall “ask,” which can improve the odds that the campaign will get funded.

There is a concept in this article that I like (and that I discussed in my book Health Care: Meet the American Dream). Let’s say you’re giving money to a campaign to help pay for bills associated with a rare genetic disorder. You could be prompted to donate money to other campaigns raising money for the same thing. This is a more legitimate form of equitably distributing resources because genetic disorders transcend income levels. Anyone can have them, due to no fault of their own.

The knee-jerk response to this is that while anyone can have them, not everyone can pay for them. Many believe the answer to this ethical conundrum is a wealth redistribution solution, like re-routing crowdfunding donations. While we do have a severe wealth disparity in this country, we have also lost touch with our civic responsibility to be healthy. Over 40% of Americans are obese, and obesity correlates to the development of almost every major chronic disease. Ninety percent of medical expenses are a result of chronic conditions, many of which are preventable. We need more patient education to focus on wellness so many of us avoid receiving these medical bills in the first place.

Crowdfunding can be a financial savior for those in truly catastrophic situations. Those with genetic disorders or individuals who have been victims of a terrible accidents need relief from unexpected and unpreventable medical costs. As health care costs in America continue to climb, we must be prudent with how we spend our dollars, especially on unregulated platforms like crowdfunding. In the end, wealth redistribution isn’t the answer to skyrocketing medical costs. A focus on wellness and good health is.

To learn more about ways that hospitals can improve their pricing, please listen to my podcast, “Price Transparency, Part I: Ways to Improve Provider Pricing,” on The Powers Report Podcast.

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