Crowdfunding has been touted as a way for individual patients to help defray their healthcare costs, but their chances of success are far lower than many people are aware.
That's the conclusion of a new study by NerdWallet. The company has concluded that only 11 percent of crowdfunding campaigns for healthcare actually meet their goal. Nevertheless, crowdfunding to pay for healthcare expenses comprised 41 percent of campaigns on sites such as GiveForward, Plumfund, FundRazr and Red Basket. The average crowdfunding campaign sought nearly $16,000, according to NerdWallet.
The study suggested that crowdfunding might provide false optimism to some patients, delaying their exploration of other options such as bill negotiation and even bankruptcy.
“Time is not on your side when it comes to unpaid medical bills,” Bruce McClary, vice president of communications for the National Foundation for Credit Counseling, said in a statement from NerdWallet. If you haven’t negotiated your medical bills within 120 days, the debt will likely be sent to a collection agency,
The study belies media coverage on the topic, where patients who have been able to successfully crowdfund five-figure and even six-figure costs have been reported. Some crowdfunding sites, such as GoFundMe, have raised as much as $30 million annually for healthcare services in recent years. However, according to NerdWallet, GoFundMe did not release any data for its medical crowdfunding, although the company claims to have raised $930 million in that category to date.
Crowdfunding for medical devices have also gained some traction in recent years, although that process has led to regulators raising some concerns.
Crowdfunding campaigns for healthcare tend to be more successful among urban than rural patients, because they often have a larger network of family members and friends to spread the word via social networks. And they also tend to work better when a family member of a patient starts the campaign.