Crowdfunding healthcare: …An emerging elixir for health financing gaps

Funding healthcare is one of the biggest challenges affecting health systems in most African countries. Despite the famous Abuja declaration to commit at least 15% of GDP to healthcare, little has been seen in terms of actualising this declaration. Africa accounts for a substantial share (about 50%) of disease burden in the world but spends on average a scanty 5.6% of its GDP on health.

Most health systems in Africa are characterised by catastrophic out-out-of-pocket expenses due to the absence of health plans for especially poor and vulnerable populations. High out-of-pocket payments means poor households are more likely to sink deeper into poverty because of the negative effects of sickness on their income and general wellbeing.
In recent times, there have been calls to rein-in funds from privileged individuals and institutions which could be channeled into funding healthcare – either by ensuring financial protection for the vulnerable, helping healthcare startups, or improving health research. Crowdfunding is an emerging innovative mechanism for bringing in monies for healthcare.

Crowdfunding is the practice of funding a project or an enterprise by raising many small amounts of money from a large number of people – typically via the Internet. It deviates from traditional financing methods and is increasingly being used to fund health-related projects and campaigns.

Its transactions typically take place with the involvement of three players: the initiators of the project who are seeking funding for it; the funders of the project; and the platform that links or connects the project initiator with the funders.
The initiator of the crowdfunding process may act as an agent for an individual or group and does not always benefit from the project. There are three models that characterise the crowdfunding space, and the model chosen depends on the purpose or objective of the venture.

Donation-based crowdfunding is where participants offer philanthropic contributions toward a cause. Reward-based crowdfunding asks funders to contribute money in return for rewards or prizes. Investment-based crowdfunding is the type wherein participants provide funding through high interest loans or in return for a stake in a company.

There are about 1,250 crowdfunding platforms in the world – raising a total of US$16.2billion in 2014 alone according to the 2015 Massolution Global Industry report. Popular crowdfunding platforms around the world include Indiegogo, Crowdcube, HealthConnect and GoFundMe. The growth in use of internet around the world has impelled the acceptance and use of crowdfunding in various sectors, including health. Commercialisation of the Internet has also reduced transaction costs and provided an effective way of matching payers and project initiators.

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The crowdfunding terrain in Ghana and most African countries, however, is not limited to use of just the Internet; in fact, the Internet plays very little part in crowdfunding. Crowdfunding in Ghana largely rides on ubiquity of the mobile phone and growing use of remote payment systems such as mobile money services.
In several donation-based crowdfunding initiatives in Ghana, mobile technology and conventional media such as radio and television have been extensively used. In the absence of the Internet, these have proved very effective in crowdfunding personal healthcare and other healthcare initiatives.

In a health campaign dubbed #SaveThemNow, the First Lady of the Republic of Ghana and the MultiMedia group raised GH¢7.7million toward the building of a new mother and baby centre at the Komfo Anokye Teaching Hospital, the largest hospital in the Ashanti Region. The MultiMedia group, in this case, provided the crowdfunding platform that connected funders including corporate bodies and individuals to the initiator – which was the First Lady.
In a related situation, the Kokrooko Foundation – led by one of Ghana’s renowned journalist and morning show host Kwame Sefa Kayi – has continuously crowdfunded the purchase of incubators for some of the major hospitals in Ghana, the latest beneficiary being the Volta Regional Hospital.

Mobile technology has been the tool increasingly being used in crowdfunding individual healthcare expenditures. The media landscape in Ghana is replete with stories of stranded individuals in need of financial assistance for healthcare. The media normally provides the platform and connects individuals who contribute their widow’s mite through mobile money and other methods toward funding the treatment of various health conditions for individuals.

MultiMedia crowdfunded the cost of surgery for a brain-tumour patient in 2016 from donations of individuals through mobile money. In a similar approach, through the use of mobile money wallets, individuals and families in Kenya are able to receive funding for their healthcare through contributions from individuals and corporate organisations in Amsterdam.

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This is made possible by HealthConnect, a crowdfunding platform that connects people, companies and organisations which want to make a difference with projects that have a positive impact on the health of people in Africa. HealthConnect offers fundraising organisations the opportunity to recruit new supporters with direct donations into the personal wallets of individuals toward healthcare expenses.

A typology for crowdfunding healthcare has been proposed which classified crowdfunding for health into four types. The first is health expenses, which are campaigns to raise donations to fund out-of-pocket expenses for patients unable to afford certain medical procedures or products. The second type of crowdfunding is geared toward not-for-profit health initiatives such as fund raising for medical institutions or charitable organisations, patient education and awareness programmes and global health missions. An example is the 2014 ice-bucket challenge which raised a total of US$115million toward the Amyotrophic Lateral Sclerosis Association, Motor Neuron Disease Association and the #Savethemnow campaign.

The third is health research, wherein researchers crowdfund cost of research for not-for-profit work. Crowdfunding for the randomised control trial of a new vaccine is an example. This is done with the intention of achieving a social good instead of profit. The fourth type is equity crowdfunding, whereby healthcare ventures with a commercial future are crowdfunded with equity. Money from equity crowdfunding can be used to speed-up clinical testing and development of new therapies or increase the production of a medical product that is commercially viable.

Crowdfunding draws attention to neglected health issues and populations and improves individual and health startups’ access to financial support. Policymakers should however take note that high health-related crowdfunding signals a gap in the healthcare financing system. High crowdfunding for health expenses especially for out-of-pocket expenses is a sign of inadequate insurance or universal health coverage for a country’s population, especially for those at the base of the pyramid.

The writer is a marketing and communications strategist who works in the health systems strengthening sector. His interests include health financing, health communication, mHealth innovations and mHealth research. He has worked in the advertising, fitness and health and events industry.. email address is billaziebok@gmail.com

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