Tuesday, July 2, 2013

Fwd: qotd: Administrative costs and profits from crowdfunding

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-------- Original Message --------
Subject: qotd: Administrative costs and profits from crowdfunding
Date: Tue, 2 Jul 2013 11:30:55 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

Kaiser Health News
July 2, 2013
Turning To The Web To Help Pay Medical Bills
By Caroline Mayer

Even with Stage IV lung cancer, there are moments when 32-year-old Chip
Kennett feels blessed. Over the course of two weeks in April, those
moments were many, as 325 friends and family members contributed $56,800
over the Internet to help defray his out-of-pocket medical costs.

The Kennett family of Alexandria is one of thousands turning to the
Internet to raise money for medical bills. The sites that host these
campaigns operate much like online business fundraising sites such as
Kickstarter. It takes only a few keystrokes for a family to set up a Web
page, where they tell their story and state a fundraising goal; later,
they can spread the word on social media sites such as Facebook.
Donations can be made with credit cards or via PayPal.

The contributions, which can be given by name or anonymously, typically
range from the very small (as little as $5) to the extremely generous
($1,000 and up). In the Kennetts' case, donations ranged from $10 to
$2,000. Most sites are for-profit and charge a fee, between 3 and 12
percent of the money donated, to cover the processing costs and the
expenses of running the Web site.

The Kennetts acknowledge they are lucky to have good health insurance.
(Sheila has a federal employee policy through her job at the Senate.)
Even so, the Kennetts have paid thousands of dollars in out-of-pocket
expenses, including the insurance plan's co-pay requirements and its
$5,000 annual deductible ($7,000 for out-of-network doctors) for both
2012 and 2013.

Medical fundraising sites are growing in number and profitability. In
the first 12 months after it launched in 2008, GiveForward raised
$225,000 for 359 campaigns; this year, it raised more than $20 million
for more than 15,000. Company officials said GiveForward had more than
$1.4 million in revenue in 2012 and has raised more than $47 million for
families since it began.

When it launched, GiveForward also raised money for other causes --
"scholarships, art projects, whatever," says co-founder Ethan Austin.
But the "hugbacks" -- calls or messages from users -- from medical
fundraisers were so appreciative, "we decided, 'Why do anything else?'"

Austin says he is not surprised at the rapid growth of crowd-funding for
medical costs, citing a 2011 National Bureau of Economic Research study
that found that half of American adults say they would not be able to
come up with $2,000 in the event of a medical emergency. This, taken
along with another recent study showing that the average cancer patient
incurs as much as $8,500 a year in expenses not covered by insurance,
further explains why so many ailing Americans are seeking outside help
to pay their expenses, according to Austin.


Comment: Crowdfunding: the collective effort of individuals who network
and pool their money, usually via the Internet, to support efforts
initiated by other people or organizations (Wikipedia).

What a nice gesture - friends, acquaintances and caring strangers
joining together to pay medical expenses not covered by a federal
employee health policy available through the United States Senate
(FEHBP), one of the highest quality private insurance plans available in
the United States.

What? Cost sharing has become so prevalent - even amongst the best of
our health plans - that people with significant health care needs
insured by these plans have to turn to charity to pay their bills? Not
even cake sales will do. They need real money. (Isn't this what
insurance is supposed to prevent?)

And who moves in? Entrepreneurs who set up for-profit organizations that
provide administrative services for this crowdfunding. Just what we need
in a health care system already tremendously overburdened with
administrative waste - more administrators who profit from our highly
dysfunctional, fragmented health care financing system.

PwC reports that next year 44 percent of employers are considering
high-deductible plans as the only option for their employees. The
benchmark plans in the Marketplaces (exchanges) are high-deductible
plans. The new national standard in health care coverage will leave far
too many individuals exposed to financial hardship in spite of having a
health care plan.

The logical solution would be to reverse this trend and provide coverage
that protects individuals from medical debt. But that's not the American
way. We bring in more administrators and pay them richly, further adding
to our almost intolerable national health expenditures.

Hey! Is anybody reading these messages? Single payer. Single payer!

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