Crowdfunding online can be a great way to raise money for otherwise unaffordable medical expenses from friends, family and strangers who want to help out. But the complexities of the health care system, and associated risks have, until now, made crowdfunded healthcare more difficult than other crowdfunding ventures.
Like with any other charitable venue where money is involved, there is a risk that a few bad actors may take advantage of compassionate strangers. Even when everyone acts in good faith, hospitals and medical regulation haven't really caught up to the new technology, which can inhibit the donations getting used for medical aid. It's those problems that Frederick, Md.-based serial entrepreneur Paula Jagemann-Bane decided to address by founding her newest startup, Someone With Group, officially launching in January.
"62 percent of bankruptcies happen because of medical costs, but crowdfunding is ripe for fraud and fraudulent activity," Jagemann-Bane explained in an interview with DC Inno. "There's no vetting of the patient. It's a free-for-all."
KickStarter and IndieGoGo may be great at spurring the creation of art, technology and other projects, but there are things that can be done to check out the project creators and make sure they aren't con artists. It's a lot harder to do that with medical patients because of the federal HIPAA Privacy Rule, which protects people from having their medical history investigated.
"They could pull the HIPAA card when asked for proof," Jagemann-Bane said of potential medical crowdfunding cases. "Someone With Group is HIPAA compliant. The money donated with PayPal or credit card on our platform is pushed to a card restricted to medical merchant codes. It won't work at Exxon or Best Buy."
Jagemann-Bane, a Hood College alumna and one of the original members of the UUnet team, has a deep understanding of the technology and regulatory issues involved. On the medical side, she's served on the board of the Frederick hospital system for years and knows how complicated it can be to arrange for medical care even if a patient can get the money from another source.
"The rules for when a patient isn't using their own money for medical treatment can be hard to navigate," Jagemann-Bane. "Patients who use Someone With Group are sponsored by the hospital, which [simplifies] the payments."
Someone With Group is even crowdfunding its own capital with equity crowdfunding platform Finaeos. The current goal is to raise $3.5 million from interested investors.
The platform is also testing out ideas beyond critical care. The open-architecture has led to the creation of a sister site to raise money for medical care for pets. The Pet Lovers Program connects with vets the way the main platform does with hospitals. Although the regulations are less strict with animals, the system's protection against fraud still applies.
The main focus will remain with helping people raise funds for critical healthcare. Jagemann-Bane said she plans to add new hospital systems as quickly as she can. And, as there aren't any other HIPAA-compliant platforms in competition as of yet, Someone With Group has already grabbed attention. IndieGoGo has also expressed some interest in a partnership. That makes sense since its IndieGoGo Life platform is already aimed is for raising money for life events of all kinds, whether a wedding or medical treatment. But, it doesn't have that HIPAA compliance.
"I want to expand who people think of as family and friends," Jagemann-Bane said. "People will help each other if we make it possible."
