Health care is a gold mine for crowdfunding

America’s Health-Care Crisis Is a Gold Mine for Crowdfunding

By Suzanne Woolley
Bloomberg, June 12, 2017

Crowdfunding platforms such as GoFundMe and YouCaring have turned sympathy for Americans drowning in medical expenses into a cottage industry. Now Republican efforts in Congress to repeal and replace Obamacare could swell the ranks of the uninsured and spur the business of helping people raise donations online to pay for health care.

But medical crowdfunding doesn't have to wait for Congress to act. Business is already booming, and its leaders expect the rapid growth to continue no matter what happens on the Hill.

At industry leader GoFundMe, medical is one of the biggest fundraising categories. CEO Rob Solomon has said it's what "helped define and put GoFundMe on the map.”

With enough volume, the business of helping people raise money for medical care has a lot of profit potential. GoFundMe takes 5 percent of each donation, 2.9 percent goes to payment processing, and there's a 30¢ transaction fee.

Indiegogo, which started out funding filmmakers, created a separate platform in 2015 called Generosity. Medical is a top category, and users pay a 3 percent payment processing fee and the 30¢. Now Facebook has jumped into the fray. On May 24, it began allowing users to launch fundraisers for personal causes or nonprofits on their pages. Medical is one of eight available categories. For personal cause campaigns, Facebook takes 6.9 percent of each donation plus 30¢.

Medical crowdfunding is "highly, highly scalable and has a ton of runway," said Dan Saper, chief executive officer of YouCaring. "The growth rate of the industry is showing that this can absolutely be an impactful safety net for a lot of individuals and communities to help each other."

The remarkably named Producing a Worthy Illness: Personal Crowdfunding Amidst Financial Crisis, a study published this year by the University of Washington/Bothell, offers a striking perspective on some of those communities. Personal medical campaigns on GoFundMe were likelier to come from people living in states that chose not to expand Medicaid under the ACA, preliminary results of the study showed.

“The more dramatic the need, the more successful" the fundraiser, said Adrienne Gonzalez, who follows the industry as the creator of, a site that exposes fraudulent campaigns on GoFundMe.

“‘I need help with my deductible’—they are not going to be very successful,” said Gonzalez, who believes crowdfunding has done a lot of good but presents "this whole socioeconomic problem" because "you almost have to be a marketing guru" to create a successful campaign.

Slightly more than one in 10 health-related online campaigns reached their goal in the NerdWallet report.

"Is this something that is going to be a solution to a lack of health insurance?" said Jeremy Snyder, a health sciences professor at Simon Fraser University in Canada. "Absolutely not.”



By Don McCanne, M.D.

In spite of the Affordable Care Act, medical debt remains a major problem in the United States. It is no surprise that crowdfunding - soliciting donations over the Internet - has become a means of trying to fill the void resulting from being uninsured or under-insured. And there are plenty of entrepreneurs who are quite willing to open these channels - for a percentage of the take - Facebook being one that takes 6.9% plus 30 cents per donation.

Just what we need - more administrative costs and profits consumed by middlemen entrepreneurs. This doesn’t even take into consideration the diversion of funds that can take place once they reach the beneficiaries or their handlers. Besides, the majority of those who depend on crowdfunding to pay their medical bills will be disappointed. Why would people donate funds to help pay someone else's deductible when they have their own deductibles to worry about?

We can surely find a better way to fund health care, like maybe an improved Medicare that covered everyone. Depending on an industry that capitalizes on charity certainly is not the way to go.