Online Crowdfunding for Health-Related Expenses Trends Upward

In early January, JAMA Network Open published results of a cross-sectional study demonstrating the growth in online fundraising to cover health-related expenses [Angraal S, Zachariah AG, Raaisa R, et al. Evaluation of internet-based crowdsourced fundraising to cover health care costs in the United States. JAMA Netw Open. 2021;4(1):e2033157. doi:10.1001/jamanetworkopen.2020.3315]. Investigators pulled data from the GoFundMe website from 2010 (the year the site was established) through 2018. Of the more than one million fundraisers extracted, 27% were efforts to raise money for health-related expenses. Moreover, the prevalence of health-related fundraisers increased dramatically over time, both in number of fundraisers and dollars sought.

We asked a panel of experts, including one of the study’s authors—John A Spertus, MD, MPH—to analyze what this trend says about health care costs and affordability; what message payers can take from it; and what solutions could help decrease the need for online fundraising. Our experts include: 

• Melissa Andel, principal, Common Health Solutions, Washington, DC 
• Larry Hsu, MD, medical director, Hawaii Medical Service Association, Honolulu, HI
• Gary Owens, MD, president of Gary Owens Associates, Ocean View, DE
• Edmund J Pezalla, founder and CEO at Enlightenment Bioconsult in Hartford, CT
• Arthur Shinn, PharmD, president, Managed Pharmacy Consultants, Lake Worth, FL
• Norm Smith, principal payer market research consultant, Philadelphia, PA
• John A Spertus, MD, MPH, Lauer Missouri Endowed Chair and professor of medicine, University of Missouri, Kansas City, MO
• F Randy Vogenberg, PhD, RPh, principal, Institute for Integrated Healthcare, Greenville, SC

What is the important take-home message of these findings? 

Dr Spertus: While we had hypothesized that more and more patients were reaching out to social media strategies to crowdsource their costs of care, we were quite surprised at the magnitude, increases over time, and amount of money raised for health care needs.

Dr Hsu: People are increasingly using social media tools to share their medical issues, including their diagnosis. So, when faced with very expensive or uncovered treatments, it is natural to use social media platforms for crowdsourced funding.

Ms Andel: The most important message is that, almost 11 years after the passage of the Affordable Care Act (ACA), Americans are still struggling to pay medical bills. As we look toward a 2.0 version of health care reform, it is important to consider these findings. The ACA demonstrated success in getting Americans covered—our national uninsurance rate hit historic lows—and for some Americans it made their care more affordable. But we still have issues that need to be addressed.

Additionally, many of the fundraisers that I have seen are aimed not just at direct medical costs, but also supporting caregivers, who may have to relocate temporarily or take a leave of absence from a job to help. Even if we had 100% coverage of all medical care, there would still be families that would face financial hardship for other reasons.

There is no denying the fact that costs are an undue burden for many. But isn’t it also true that the increased prevalence of crowdsourced funding is reflective of how ubiquitous technology has become in our society?  

Dr Spertus: That is potentially true, and we do not have good comparison data. However, that our current health care system places many in a position where they need to leverage this source to support their needs is concerning. We would love to compare the outcomes of patients who were and were not successful in raising funds, or even what proportion of their expenditures were covered, but we do not have access to such data.

Dr Hsu: As long as people feel comfortable using social media, and the technology remains easy and readily available, this trend will continue. 

Dr Owens: Medical fundraising existed long before technology was developed to make it more automated. 

Dr Vogenberg: Technological advances are marrying with other factors to create a perfect storm—job loss, poor financial planning, the pandemic, etc. These factors coupled with sustained high growth cost curves for care means that many Americans have hit a wall in terms of affordability, leaving some with little choice but to resort to medical fundraising. Moreover, it is likely to become more prevalent as new, more expensive diagnostics, drugs, and devices come to market. 

Dr Pezalla: The ratio of health care to total crowdfunding does not seem to have increased over time, suggesting that we are looking at a secular trend of increased familiarity with the platforms and access to the platforms and is not reflective of increasing medical costs. 

Still, I agree with Dr Spertus. The fact that anyone has to crowdfund to pay medical bills does raise some important questions:

• Do we have unacceptable levels of no/inadequate insurance?
• Does insurance design work for everyone, or are out-of-pocket costs too high?
• What is being funded? Is it treatments that health plans would cover for some patients but not this one? If so, there may be a disconnect between the patient/provider view of the therapy and that of the health plans.

Ms Andel: Not only has it become easier to fundraise online, but it is also generally considered socially acceptable. I think this is a result of the increase in cost-shifting from payers to patients. It is becoming more common to face deductibles and coinsurance, which increase annually. Also, after several years of decline, the rate of uninsurance, as well as the availability of more-restrictive health plan options has increased over the past several years. 

Mr Smith: I agree that high deductibles and copays are a major barrier for many families. Crowdsourced funding is a symptom of inadequate health insurance coverage among a significant percentage of US families. Plus, Americans are among the most generous people in the world, throughout every economic class. Along with that, there is a small segment of fundraisers that take advantage of that generosity. Some cases of online fundraising are being investigated for fraud. When raising money for a medical condition, there is an incentive to use hyperbole to present the case. I am not sure this is being monitored or vetted properly. 

Do you think there is a message for payers in these findings? 

Dr Spertus: We did not have access to fundraisers’ insurance status [but] given the absence of even basic universal insurance in this country, we suspect that many of these were a consequence of inadequate insurance. An important limitation of our work, is that we did not capture the denominator of people who needed additional financial support. To leverage crowdsourcing strategies requires a certain education level, knowledge of this option, and internet savvy. The need is probably much larger and results in substantial socioeconomic disparities.

Dr Pezalla: Individual insurance companies will have difficulty addressing these issues in insured plans because of concerns regarding adverse selection (potentially sick people selecting your plan because your benefits are perceived as more generous) or moral hazard (lower out-of-pocket costs are thought to contribute to excessive spending). 

I suggest that higher out-of-pocket costs may help to balance the books but do not improve the appropriateness of utilization. Studies have shown that all utilization decreases, not just the inappropriate utilization. Also, requests for expensive therapies are more a result of physician decision-making than patient decision-making. Even still, patient costs do matter to providers and also to drug companies and provide some check on prices and utilization.

Ms Andel: The use of crowdsourced funding is a self-selecting group, so we should be careful not to read too much into it. But surveys have also shown that a majority of Americans are aware of increasing out-of-pocket costs, even if they can afford them. However, payers are in a position where they have to balance total costs between premiums and cost-sharing. 

Dr Shinn: I agree that crowdsourced fundraisers are a self-selected group, and their actions will not likely make major dent in payer policy. But I have witnessed first-hand that their grassroots tactics can lead to small changes. A covered member of one of my clients was denied coverage for a drug because coverage was stipulated only when a specific procedure was performed. But the patient could not afford the procedure. So she turned to online fundraising. It turned out that a number of members of the health plan sympathized with this patient, and let the plan know about it. In fact, enough of a stink was raised that the plan eventually changed its policy and no longer requires the procedure to be performed in order to cover the drug. 

Are there any practical measures you think payers can and should employ in response to findings like these? 

Dr Spertus:  It would be fascinating for payers to query their covered lives to identify the proportion of their patients who used crowdsource funding and to reflect on why this was needed and how they might redesign their plans to minimize these needs.

Dr Pezalla: As an industry some investigation is warranted to determine what costs are being sourced. Are these legitimate costs not covered by insurance? Are they for experimental therapies? Are they for surprise provider billing? The answers to these will drive policy discussions and solutions. In some cases, such as experimental therapy, perhaps there does not need to be a response from industry and crowdfunding is appropriate.

Ms Andel: The real question is how can payers lower overall costs? They can place more restrictions on coverage, they can bargain harder with providers (and risk losing them from their network), but the general public also doesn’t like those options, either.

Dr Owens: I am not sure there is anything that payers can or should do. While out-of-pocket costs are growing, the current benefit designs are not likely to change as they are driven by employers need to keep their cost controlled by increasing member cost shares. Likewise, in the fully insured world, increasing benefits increases the premium and would result in more uninsured.

Mr Smith: Actuarial projects are immutable. Once a rate is actuarially sound, it’s difficult to challenge it. Any changes to assumptions that support an actuarial decision would need to be supported across the industry.

Dr Vogenberg: Employers have become more engaged than ever in addressing the rising cost of care. For instance, the increasing number of onsite/near-site clinics can reduce costs significantly.  Collaboration between hospitals/health systems with traditional insurers and third-party administrators can also bring costs down, as does investment around social determinants of health. 

What is the government’s role? Is the trend of increased crowdsourced funding another indication that the ACA is in need of improvement—for instance, through President Biden’s public option proposal? 

Dr Spertus: There are innumerable challenges with way the ACA has been implemented and attacked. But our data can’t really get at that since we don’t know the insurance that the fundraisers had. Also, we weren’t able to compare states with and without Medicaid expansion, in large part because there is also great state variability in the awareness and use of these means for raising money.  

Dr Owens: I don’t think we can make a direct correlation from the findings. The ACA most likely does need revision, but revising to improve affordability means that someone still has to pay. The only logical source for that is through government subsidy and that takes revenue from taxes—a tough sell in a down economy.

Dr Shinn: I agree that the ACA needs to be modified, but it’s a stretch to say those improvements are needed because people are raising money online. 

Dr Pezalla: What we do know is that out-of-pocket expenses in some ACA plans can be high and that many families lack the ability to pay. The ACA was intended to improve access and not to control costs. But ACA exchange plans are not novel, they have the same components as Medicare and other legacy plans such as deductibles and copays. Also, improved access due to the ACA is in part due to removal of issues related to preexisting conditions, first-dollar coverage of preventive services, and coverage of children to age 26. All improvements not related to exchange plans.

Ms Andel: It’s important to ask how the premium-free pubic option would be structured. If it is structured like an ACA bronze plan, then people would still face steep deductibles, even if they didn’t have premium expenses.

Mr Smith: The ACA’s biggest weakness is its failure to address prices and costs. A stepped approach toward the public option could be a “public option lite,” which would help pay for high-cost deductibles. If the average family income is $55,000, a $4000 deductible can look like a $40,000 mountain, and stop people from accessing care.

Dr Hsu:  It’s true that increased online fundraising may be a sign that the ACA is incomplete, but, as has already been mentioned, funds are being raised for expenses outside of traditional coverage. Transportation and lodging costs, for instance. Those expenses will not go away even if the ACA is altered. 

Dr Vogenberg: The last thing we need now is more government interference in the private sector. At best, ACA plans are a band-aid. For the most part, they have been supplanted by other similar programs or plans that are more affordable while engaging members in the plan to take better care of themselves.  A key success factor in bending the cost curve is patient engagement in their own health as part of preventive primary care efforts.

Are there other government interventions that would help address the problem—such as Medicaid expansion, lowering the age of eligibility for Medicare, capping out-of-pocket premiums, and eliminating the ACA subsidy cap? 

Dr Spertus: Again, this is much more of a political discussion vs something we can address with these data. Personally, I am concerned about the costs of care and the limited access for many of our fellow citizens.  It might be interesting to look at changes in trends over time in states that do and do not get access to some of these expanded care options.

Dr Owens: Until the country is ready to support universal health care like most industrialized countries, we will have this problem.

Ms Andel: I think expanding Medicaid to all 50 states, reinvesting in outreach to targeted populations, and eliminating the so-called premium subsidy cliff are some low-hanging fruit options. But that still misses people who have bronze ACA plans, or an employer-sponsored plan, where they can’t afford their deductible or cost-sharing. 

I would hope that this is a bit of a reality check for the Medicare for All proponents. Medicare doesn’t have annual out-of-pocket spending limits and charges 20% cost-sharing for all outpatient care under fee-for-service. So, in addition to expanding the program, you would have to radically reform the program as well to address concerns with out-of-pocket costs.

Dr Pezalla: The American public tends not to like for-all projects because they are concerned about money being spent on those who are perceived to be able to afford to pay their own way. However, lowering the Medicare eligibility age makes both social and economic sense. As a demographic, commercial plan members aged 60 to 65 years are the most expensive ones. On the other hand, they would have lower bills as a group than the 65 to 70 age group in Medicare. Therefore, it would make sense to add them to Medicare. Especially since many people in the 60 to 65 age group are working and can pay higher premiums. This would also improve employment opportunities for that age group as it would prevent employers from being worried about the risk of high bills as the employer could just pay the Medicare premium.

In the long run we need to come up with a better structure for paying for health care. This does not necessarily mean a single-payer system. Experiments holding providers accountable are underway and a combination of new payment mechanisms and accountability may provide a new way forward.

Ms Andel: There have been studies that look at patient outcomes before and after Medicaid expansion, as well as comparing similar patient cohorts in expansion/nonexpansion states. It seems pretty clear that expanding Medicaid is an important policy to improve coverage and outcomes. Lowering the Medicare eligibility age would be interesting, but one would need to see how that would impact the risk pools in both the under 65 market as well as the Medicare risk pool. I would also look into changing the policy that allows children up to age 26 to stay on their parents’ health insurance and Americans up to age30 to buy catastrophic plans. I think both of those policies, while popular, have had negative impacts on the risk pool and have led to higher premiums. 

Dr Vogenberg: The way I see it, Medicare is no panacea, and Medicaid is rife with issues due to political interference in normal market behaviors.

Mr Smith: Here’s an outside the box proposal: Create a sick fund for when illness is not an insurable event, but needs to be paid for. For instance, long-term multiple sclerosis is not an insurable event. Giving children a panel of vaccines that are required by state law is not an insurable event.  Congress should appropriate funding and maintain it to pay into this fund.

It appears that we are between a rock and a hard place. Many of you believe that tackling the problem aggressively is the best solution, but it is a solution that Americans are not yet ready for...

Dr Spertus: Politics is the determinant of this and not the needs of people.

Ms Andel:  All of the solutions involve spending more money, which is something that nobody wants to do.

Dr Vogenberg: The public is looking for reasonable solutions and alternatives in health care that are affordable and result in patient-centric
outcomes.

...which means crowdsourced funding for health expenses is more or less here to stay? 

Dr Spertus: I am sure that crowdsourcing will be here for a long time, it would just be nice if far fewer people needed it to get care that they need.

Ms Andel: I think so. Crowdfunding meets needs beyond the direct out-of-pocket costs, and we have been offering support to family, friends, and members of our community for a long time—it’s one of the things that makes us human. But I agree, I wish crowdfunding for direct medical care expenses wasn’t needed so frequently in one of the richest countries in the world.

Dr Owens: It’s a more efficient way to request help, better than placing jars on countertops in stores.

Dr Vogenberg: Think about President George HW Bush’s “thousand points of light” speech where he praised America’s spirit of volunteerism and generosity. Crowdsourced funding fills a gap. We will always have gaps to fill.