Crowdfunding to pay health bills [PODCAST]

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“Crowdfunding models of paying for health care maximize the probability that all members’ eligible bills will be paid in full each month. These models come without the burdens of skyrocketing premiums and deductibles. Unlike traditional models, members aren’t chained to yearly contracts and have more flexibility and autonomy with crowdfunded models.”

Andy Schoonover is a health care executive.

He shares his story and discusses his KevinMD article, “Open enrollment: It’s time to leave your insurance plan behind.”

Reflect and earn 1.0 AMA PRA Category 1 CME for this episode.

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Hosted by Kevin Pho, MD, The Podcast by KevinMD shares the stories of the many who intersect with our health care system but are rarely heard from.

Transcript

Kevin Pho: Hi, and welcome to the show, where we share the stories of the many who intersect with our health care system but are rarely heard from. My name is Kevin Pho, founder and editor of KevinMD. Today on the show, we have Andy Schoonover. He is a health care executive, and he wrote the KevinMD article “Open enrollment: It’s time to leave your insurance plan behind.” Andy, welcome to the show.

Andy Schoonover: Thanks for having me. Glad to be here.

Kevin Pho: We’ll get into the article in a little bit, but first off, can you share your story and journey to where you are today?

Andy Schoonover: Yeah. I was in health care before my existing company. I was running a remote patient monitoring company, so we were monitoring blood sugars and blood pressure and things like that out of the home of folks with chronic conditions, and selling that into the big Medicare Advantage plans to keep those folks out of the hospital. I sold that company to a private equity firm in 2014, and as such, I lost my health insurance from my company, like most Americans, who get health insurance directly from our companies.

So I went over to HealthCare.gov and got a plan that was 1,200 bucks a month for me, my wife, and my two girls, and it worked until we actually had to use it. My little one was having recurring ear infections, so we went to the ear, nose, and throat doc, and he said she needed to get tubes in her ear. So we headed over to the local hospital for a 15-minute procedure and got the bill: $8,000. I was like, wow. This was my first situation where I had actually engaged with the health care system, with the egregious prices.

And not only that, but my health plan came back to me and said it was medically unnecessary, even though she had a perforated eardrum, and wouldn’t pay for it. That was the point where I was like, somebody’s got to do something about health insurance. Too many people are being financially impacted by a really broken system. And so that’s kind of where I’m at today, thinking about this a little bit differently.

Kevin Pho: All right. So tell me some of the ideas that you have to solve this problem.

Andy Schoonover: Yeah. Over the last couple of years, since I said goodbye to my health insurance plan because they rejected my claim, I’ve been uninsured. To a lot of people, that sounds super risky, but my wife, my two girls, and I have been uninsured for two years, and we’ve been building some tools to allow people to operate outside of the legacy health insurance system.

As you kind of look through all the needs, the day-to-day maintenance is pretty easy nowadays, especially given all the telehealth options we have out there. We can get that for a few bucks. And then you think about the bigger ones, the bigger expenses. We’ve pulled some interesting ways of doing this from crowdfunding sources like GoFundMe. I was on GoFundMe six or eight months back, and I was like, “Wow, these people are getting all of their big bills paid for by strangers.” So can we do that in a little bit more of a formalized way?

So we’ve basically put some off-the-shelf tools, telehealth type of tools, with some crowdfunding tools on the back end, to let people pay for both the small expenses and the big expenses. My family has saved about $10,000 a year versus going to your HealthCare.gov type of plan.

Kevin Pho: So you talked more about that in your KevinMD article. It’s titled “Open enrollment: It’s time to leave your insurance plan behind.” Now, for those of you getting a chance to read your article, just walk my audience through it and share the story of why you decided to write it.

Andy Schoonover: I think people don’t understand that there are alternatives out there to HealthCare.gov or some of the short-term plans, which are total garbage from my perspective. So in the article, I try to outline why and how you can actually operate outside of the insurance system. That’s kind of the bulk of that article, just saying, “Hey, there are alternatives for people who don’t want to deal with health insurance.”

Look, 250,000 people every year who have health insurance go bankrupt because of medical bills. That is telling me that health insurance is not working. The whole point of insurance is that if you have a large event, it doesn’t put you into financial distress. And the fact that we have 250,000 people that have health insurance go bankrupt because of a medical event is challenging to me.

I’ve kind of laid out my story, which was $8,000. I’ve been super fortunate, but the vast majority of Americans can’t pay $8,000 for a health event that is pretty benign. I mean, that could happen to anybody. And so that’s really kind of what laid out the case in the article, to say, “Hey, there are options here. There are alternatives.” And so people really should take a look at them before signing up for a HealthCare.gov plan. I think even for your employer-based insurance, you look at some of the alternatives before you sign up for those things.

Kevin Pho: So one of the tools that you mentioned was crowdfunding and GoFundMe. Tell me a story of how that would work. Tell me a story of how a GoFundMe would help pay for a big medical bill or an unexpected medical bill.

Andy Schoonover: Yeah, I’ll take one of the really big ones. We had a woman who had a brain hemorrhage, I don’t know, six or eight weeks ago. She was in the neuro ICU for, I think, a week and a half. The bill was about 250 grand. And so what do we do with that, right? We help her negotiate that bill down with the hospital, and so we’re going to get that bill down to probably about $80,000 from the 250. And by the way, the hospital will also stretch that payment out over a couple of years.

So just to make the math easy, let’s just say it’s four grand a month for 20 months. If you have a small group, a couple thousand people, that’s just a few bucks a month per person to pay for a pretty catastrophic type of situation. And so what we will do is we’ll go out to our 2,000 members and say, “Hey, I’ve got this woman. She had a brain hemorrhage. The bill is $80,000. We need to crowdfund four grand a month for the next 20 months. Are you in?” And they will say yes or no.

And so why would they say yes for somebody that they don’t know? What we do is we have a generosity score. If you say yes to these, then you are considered within the community to be someone who’s super generous. If you say no to a lot of these, then you get a reputation of being super stingy. And so why is that important? Well, when you have a big health care bill, you want the community to look at you and say, “Oh, this person is super generous, and so I’m going to fund that person.” And so far, to date, anybody who’s had a 95 percent generosity score, which basically says they say yes 95 percent of the time, has gotten 100 percent of their bill funded. So it seems to be working.

So it’s this rule of reciprocity that we’re using to pay for some of these bills that is working really, really well. It’s a totally different way than doing it through insurance, but it does bring community back to health care, which is how we’ve been doing this for thousands of years. How many in the community get hurt and need help, the community rallies around them to help them out. The insurance plans have gotten in the middle of that generosity, and so we’re trying to take the insurance plan out of that transaction. So it’s working pretty well.

Kevin Pho: So within your community, how successful is it that people can get most of their large, unexpected medical bills crowdfunded?

Andy Schoonover: Yeah. So it’s 100 percent of the people who have a 95 percent or greater generosity score, which basically means if you give. And we limit the amount that we ask you to give every month to how much you put in. So for somebody between the ages of 6 and 54, it’s 175 bucks, so we’re not typically going to ask you for more than 175 bucks a month to give to somebody. And so if you give, you will get. That’s generally how this has worked thus far.

And I think it’s important, too, for your listeners, given that I’m assuming many of them are physicians: Physicians are loving this, because what we’re doing is we’re taking the health insurance plan out of the payment, and we’re paying them typically on the day of the procedure. So another specific example is we had somebody who needed a knee replacement. At the local hospital, it’s $40,000. We had an orthopedic surgeon that was going to do it for $22,000 all in for a knee replacement, and we paid them. They got paid on the day of the surgery, as opposed to waiting 60 or 90 days from a health insurance plan and haggling with them and getting pre-certifications, pre-authorizations, and things like that.

And so as doctors are trying to transition into more of a cash-pay model, we are a way of doing that. And so we’ve gotten great feedback from not only our members, but the physicians our members are going to as well.

Kevin Pho: Are most of your members primarily without health insurance?

Andy Schoonover: Well, almost 100 percent of our people don’t have health insurance, so they are fully uninsured. I might be the only one in America saying it’s better to be uninsured than to be insured, because of the insurance plan getting in the middle of all this. But 50 percent of our members come from being uninsured, so we’re actually giving people who are historically uninsured an opportunity, a platform, to get their bills helped out. So we think that’s kind of a broad, health care-wide benefit, getting some of these people the ability to pay these bills.

Kevin Pho: Now, have you received any pushback regarding your model from any entity?

Andy Schoonover: Yeah. I mean, I think that the insurance plans have more money than almost anybody. Two of them are in the top 10 largest corporations on the planet, so they’ve got a lot of money, and if we make some progress here, we know that we’re going to get some feedback, I’m sure.

I think that the other thing that we’re kind of working through is regulatory agencies. They’re going to look at this, and they’re going to say, “OK, is this insurance, or is this not insurance? Are you in the business of insurance?” And so we’ve been very careful to make sure that our customers know that this is not insurance. Your bills are not guaranteed to be paid for. I mean, here are the results, you can take a look at them, but we do not indemnify, we do not guarantee. And so we’re very, very careful about saying we are not health insurance, and everybody who joins on with us understands that. So those are the two kinds of groups of entities that I know we will have more engagement with as we become even more successful.

Kevin Pho: We’re talking to Andy Schoonover. He’s a health care executive, and he wrote the KevinMD article “Open enrollment: It’s time to leave your insurance plan behind.” Andy, you mentioned other tools that can work outside of the health insurance system. Of course, we talked about crowdfunding. What are some of the other tools that are available?

Andy Schoonover: Yeah. One of the things that we take a pretty proactive approach on is negotiating. People think that the health plan negotiates on their behalf, but oftentimes they don’t, because there’s actually an incentive, given the Affordable Care Act, for health plans to have the premiums go up, not go down, given there are medical loss ratios, which I’m sure most of your listeners understand. You can only make so much money at a $1,000 premium. You can make more money at a $1,100, $1,200, $1,300-a-month premium, and so they actually have an incentive for premiums to go up.

So we actually negotiate on behalf of our members for pretty much all the services that they get. And that may just be like, “Hey, what is your cash-pay price?” And given that you don’t have to bill the insurance plan, that cash-pay price is ranging in the 20 to 40 percent range, just because they’ll take a credit card over having to bill it through health insurance any day. So we take a very kind of aggressive approach to negotiating these health care bills. So that’s one of the big ones.

We have telehealth, and so all of our members get unlimited telehealth visits. So we ask that you use telehealth before doing anything else, just to get a first opinion from a doc. And so pretty good utilization of telehealth is a big one for us. And so those are the biggies that incorporate the vast majority of what we do: telehealth, negotiating these bills. And then doing crowdfunding on the back end is helpful as well.

If people won’t negotiate, we actually have some attorneys that will help us with helping these patients negotiate with these hospitals, because there’s actually an open price law in the universal code of commercial federal law that requires hospitals to negotiate with patients who don’t have a pre-existing contract. So we basically lease our attorneys to our members, also, that they can use to help them with some of these more difficult negotiations. It’s worked pretty well so far.

Kevin Pho: Is there a larger social commentary here, that we have a community who you say is better off without health insurance and has to rely on crowdfunding? What does that say about our health care system?

Andy Schoonover: Yeah. I mean, it’s absolutely busted in so many different ways. I mean, if you have the buyer of health care, which is our health plans, and the seller of health care, which are these big hospital systems, both wanting the price of health care to go up, health care is going to go up. I mean, people, it’s like, “Health care is so complex.” It’s not that complex. You have the buyer and the seller both wanting the price to go up; the price is going to go up. And I know that’s a simplistic way of looking at it, but in essence, that’s what’s happening, especially on the commercial side of health care, which oftentimes is paying for the non-commercial side of health care, so that the docs in these hospital systems can pay the bill.

So the fact that we don’t have anybody really negotiating on our behalf, yet we as the consumers are paying the bill, we’re not actually consumers, but we’re still paying the bills coming out of our pockets, is a really big challenge. And this is one of those few services that we buy in this country where we have no idea what the cost is of what we’re buying. I recently bought a new car. I know all the Ford dealerships in town. I know what the price of the car is. I can take a look at the Chevy dealerships and see what the price of their car is.

This is one of those few where I have no idea how much it’s costing me to go into the hospital, or even an OB/GYN appointment or a pediatric visit. We need to understand that stuff a bit more to be better consumers of health care, and the way that we have structured this allows us to make one step in that direction. So yeah, I mean, I think that consumers need to be more engaged in how much health care costs, and this is a great way of doing it, through crowdfunding.

Kevin Pho: And my final question: What are some of your take-home messages that you want to leave with the KevinMD audience?

Andy Schoonover: Yeah. For the physicians out there who are looking to escape some of the health insurance plan billing and the craziness around that, I saw a recent stat that 30 percent of the doc’s time is spent with health insurance plans administratively. Give folks like us a chance. If you want to reach out to us and are interested in giving folks cash-pay rates, then we would love to offer them the opportunity to do that. So we’re looking for really awesome docs throughout the country to help us with this cash-pay network that we’re building.

Kevin Pho: And how can people reach you?

Andy Schoonover: Yeah, you can reach us at joincrowdhealth.com, or I’m on Twitter and Facebook and Instagram. Andy Schoonover is my handle on all of those, or Join CrowdHealth is my company’s handle.

Kevin Pho: Andy, thank you so much for sharing your time and insight, and thanks again for being on the show.

Andy Schoonover: Thanks so much, sir.

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