Medical crowdfunding uses websites to request donations to pay for medical expenses or associated costs. It is seen by many as a potential answer to the government’s cuts to public health spending. Even though medical crowdfunding is still a relatively new phenomenon in terms of total money, it is swiftly gaining popularity across the globe.
We examine how healthcare crowdfunding and national health systems interact when public health coverage is inadequate and find indications of a different effect. By looking at the global population of healthcare crowdfunding platforms, this study is the first to give global and cross-platform evidence on the topic. Additionally, it offers a development study of healthcare crowdfunding sites.
Furthermore, our findings support the notion that when the platform is not investment-based or solely devoted to healthcare programs, the number of health projects that are effectively supported rises.
- Crowdfunding has taken off quickly in the field of global health.
- Health-related projects, initiatives, research, and innovation are funded through crowdfunding.
- Crowdfunding in the healthcare industry has several potential financial advantages and concerns.
- Regulations should support the crowdfunding market’s efficiency and stability.
- The need for health crowdfunding should aim to enhance societal health.
Crowdfunding in healthcare and medical care
A medical crowdfunding process involves donating money via websites to cover medical or associated costs, according to Gaia Bassani (2014). Fundraising through crowdfunding is a typical method of raising money for medical expenses (Jeremy Snyder, 2016).
The total sum of money indicates that medical crowdfunding should still be considered a niche phenomenon, although, in many nations, this development is outpacing other trends. Many academics think medical crowdfunding initiatives significantly influence the government’s efforts to reduce spending on public health (Gaia Bassaniet al., 2014).
Some chronic illnesses can swiftly deplete a family’s wealth, resulting in a severe economic crisis. Some medical supplies are not covered by residential health insurance. Therefore patients must fund these costs out of pocket, which could put them in a difficult financial situation. According to estimates, medical bills account for 62% of bankruptcy filings in the United States (Gaia Bassani et al., 2014). Platforms for crowdfunding are typically developed online.
On these websites, various medical fundraising initiatives include:
- Life insurance.
- Medical support for patients and their families.
- Reimbursement for missed wages due to illness.
These initiatives frequently include financial assistance for specific medical treatments (Jeremy Snyder, 2016). These charitable efforts will support struggling patients and their families.
Role of crowdfunding in healthcare financing?
The health industry is embracing crowdfunding, an increasing alternative financing method. This paper reviews the main financial advantages and hazards of crowdfunding in the health industry and provides a typology for initiatives that have received crowdfunding.
Crowdfunding may economically benefit the health industry by increasing market involvement, bringing attention to underserved health concerns, enhancing access to capital, encouraging project responsibility, and promoting social engagement. According to the goal of the initiative and the source of finance, there are four categories of crowdfunded health projects. These programs finance commercial health innovation, promote health research, or fund health expenses.
On the market for health-related crowdfunding, signaling and herding, two theoretical crowdfunding behaviors, can be seen. The economic dangers of health-related crowdfunding, however, include fraud, ineffective priority setting, increased financial risk, inconsistent regulatory rules, and concerns about intellectual property rights. Additionally, moral hazard and adverse selection pose more significant risks of market failure.
The negative externality that inefficient priority setting may have on accomplishing more general public health goals is where healthcare crowdfunding seems to depart from theory. Many of the economic advantages and disadvantages mentioned regarding health-related crowdfunding projects are also relevant to projects in other industries. As a result, the healthcare crowdfunding market must be financially secure and built to effectively and fairly benefit public health.
The most recent online incarnations of decentralized fundraising networks have helped to crowdfund to express itself as a restorative practice formed through diverse regimes of governmentality. In contrast to the platform, the dynamic of crowdfunding retains the collection plate, offertory, newsletter, or leaflet, all media forms that have been conducive to monetary contributions. Crowdfunding-like practices predate the Internet by a long shot.