Crowdfunding Emerges as Smart Funding Solution for Overwhelming Medical Bills

Medically reviewed by George Krucik, MD, MBA on January 7, 2014Written by Bret Conkin on January 7, 2014

Just two weeks after Saul Polonsky was born at Richmond University Medical Center in Staten Island, NY, his parents Melissa and Seth learned that their new baby suffered from severe combined immunodeficiency, or SCID. This devastating condition, better known as “bubble-boy syndrome,” meant little Saul had no immune system. 

Desperate, Melissa and Seth rededicated their lives to this fresh challenge. They focused their initial energies on the business of securing a bone marrow and blood transplant for baby Saul. 

But as is so often the case in such heartbreaking diagnoses, the condition itself is only part of the tragedy. The Polonskies’ efforts to care for their sick child were expensive. Their bills quickly skyrocketed beyond their ability to afford them. And the leaves of absence they had to take from work tied their hands even more.

The Crowdfunding Salvation

Enter crowdfunding, the newest and most rewarding avenue for raising much-needed cash to span the critical medical funding gap. Even with Obamacare and private insurance, high-deductible plans and limited payouts can quickly send individuals burdened with unexpected medical expenses spiraling into the red.

Here at Healthline, we've recently partnered with FundRazr to introduce crowdfunding opportunities to Americans bowing under the weight of their medical expenses. This proven, safe, simple, and secure fundraising application allows patients and their families to seek the financial assistance of others to help cover their medical bills by way of buzzing social networks. This system provides immeasurable aid. It also comforts the contributors by facilitating their impulse to help.

Since its 2009 launch, FundRazr has secured tens of millions of dollars through more than 40,000 fundraising campaigns in 20 countries.

Medical Bills and Bankruptcies

The average American family brings home $50,000 a year. Introduce a whopping medical bill and an insurance plan that requires consumers to pay more out-of-pocket costs than ever, and you’ve got a recipe for rapid descent into bankruptcy.

Bankruptcies due to unpaid medical bills now top the list of bankruptcy causes. Medical bankruptcies are even more common than those from outstanding credit card bills or mortgages. According to NerdWallet Health, a health-care-oriented price-comparison website, bankruptcies resulting from unpaid medical bills will visit nearly two million people this year. That’s almost the population of Houston.

Beyond the extreme of bankruptcy, some 56 million Americans — or more than a fifth of the 19-to-64-year-old population — will struggle with health care-related bills this year. More than that, says NerdWallet, 11 million people will take on additional credit-card debt. Additionally, 15 million will burn through their savings. And another 10 million will forfeit necessities like rent and food, all to pay for medical expenses.

What Stuff Costs

Considering the price tags attached to even the most common medical procedures, high medical debt is easy to imagine.

Consider:

  • A magnetic resonance imaging test, an important diagnostic procedure for the images it captures that X-rays and CT scans can’t, costs $1,121, on average in the States. And in some areas, an MRI may cost up to $2,871.
  • An appendectomy costs an average of $13,851.
  • A complication-free baby birth costs mom and dad an average of $9,775 throughout the United States. If they deliver via C-section, they’ll spend $15,041.

The Chronic Disease Piece

Chronic diseases account for three of every four dollars spent on health-care in the US. The economic burden of accidents and chronic diseases such as diabetes, Alzheimer’s, and heart disease only exacerbates the health-care money strain. Seven out of 10 American deaths each year are the result of chronic disease, making it the most powerful killer in the country.

Heart disease, cancer, and stroke account for more than 50 percent of all deaths each year. Worse, the average health-care costs for someone who has at least one chronic condition is five times greater than for someone without any chronic conditions.

Healthline Crowdfunding: Bending the Paradigm

The numbers are staggering. And it’s increasingly unlikely that an average American could imagine covering the costs associated with his health care without the help offered by a crowdfunding initiative.

Here are some numbers to think about:

  • In 2011, Americans spent $2.7 trillion on health care.
  • The average cost for a daily hospital stay in the U.S. is $3,949.
  • The average annual nursing home rate is $82,673.
  • One study found that in 2010, 30 million Americans had medical bills in collection, compared with 22 million in 2005.
  • Another study found that a full 40 percent of American adults have experienced “trouble” paying their medical bills.

Healthline is dedicated to making sure that the idea of crowdfunding for health expenses becomes the norm. Visit our site and look through some of the current campaigns—and the impressive wallets they’ve raised—and you’ll gain new appreciation for the power social media has to influence quality of life, particularly during those stretches when your life is put to the test.

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