Crowdfunding campaigns rarely raise enough to cover medical costs

A study of crowdfunding campaigns for medical expenses between 2016 and 2020 found that nearly 90% of campaigns failed to meet their goals. Thomas Breher/Pixabay

You’ve almost certainly seen the appeals while browsing social media: Called crowdfunding, people are trying to raise money to pay for their sick loved one’s mounting medical bills.

But new research shows these grassroots campaigns rarely raise enough money to make a difference.

According to GoFundMe, which owns more than 90% of the US crowdfunding market, more than a third of its fundraising is for medical needs.

But crowdfunding should be seen as a “symptom” of the failures of the US healthcare system – not a solution, said Sara Collins, vice president of healthcare coverage and access at the Commonwealth Fund for Purpose. nonprofit, and did not participate in the study. Instead, policymakers should address why Americans resort to online campaigns, she noted.

That could include expanding Medicaid — the government’s health insurance program for low-income Americans — as well as measures to reduce out-of-pocket expenses for people with private insurance.

Under “Obamacare”, most US states expanded their Medicaid programs to cover more residents. However, 12 states – mostly in the South – resisted.

Crowdfunding for medical expenses has often been described as an “ad hoc” safety net – a place the uninsured or underinsured can turn to in times of need.

But the new findings, published recently in the American Journal of Public Health, reveal a different reality.

People struggling with medical debt often face “astronomical” costs, explained lead researcher Nora Kenworthy, an associate professor at the University of Washington, Bothell.

So even a crowdfunding campaign that is doing relatively well can still be a long way from getting people out of medical bills.

Crowdfunding sites also don’t do what a real safety net would, Kenworthy said: Catch people the same way.

For the study, she and her colleague Mark Igra collected data from the GoFundMe website, using its search engine to find campaigns in every US zip code.

Investigators uncovered more than 437,000 fundraisers listed for medical needs between 2016 and 2020. In total, these campaigns raised an impressive $2 billion.

But the campaigns varied wildly in their success: the top-performing raised $2.4 million from more than 70,000 donors, while 16% of all campaigns raised nothing.

When campaigns did make money, they typically had modest success, bringing in a median of $1,100 in 2020. (“Median” means half of the campaigns made more and half less.)

And over all the years studied, almost 90% of the campaigns did not achieve their goals, half achieved 25%, while a third collected half of what they hoped for.

Who has been most successful in fundraising? People who already had advantages.

The study found that more campaigns were launched in US states with the highest rates of medical debt and the lowest rates of insured residents. Yet those same campaigns won the least.

A look at the data by revenue revealed a similar trend: Campaigns in the fifth-highest-revenue U.S. ZIP code brought in a total of $152 million in 2020. That’s compared to $70 million in the fifth-highest revenue. post offices with the lowest incomes.

This disparity is not surprising. “Social media has a lot to do with it,” said sociology graduate student Igra. “Most campaigns don’t reach a huge number of people. They don’t go viral.”

Instead, Igra said, people who try crowdfunding usually reach out to people they know. And for low-income Americans, that usually means other people are facing similar financial challenges.

No one advises people to avoid crowdfunding. Even $1,000 can help meet medical needs, Kenworthy said.

But people should be aware, the researchers said, that large campaigns spreading across social media are not typical. There can also be downsides to crowdfunding, Kenworthy noted, such as privacy issues and earnings being considered income.

All agreed that the crowdfunding trend points to underlying systemic issues: Many Americans need better health care coverage and welfare programs.

And ultimately, Collins said, it’s the exorbitant cost of health care in the United States that needs to be addressed.

“It’s not the use that’s the problem,” she said, “it’s the price.”

More information

USA.gov has information about getting government assistance with medical bills.

Copyright © 2021 Health Day. All rights reserved.

Comments are closed.