Patients must be sponsored by a healthcare system to participate in a crowdfunding campaign. It's up to the hospital to vet patients and their ability to pay their bills with their own funds. Funds raised by patients through Someone With Group are loaded onto a patent-pending, reloadable debit card that may be used only for medical bills and expenses.
"Simply put, our debit card won't work at gas stations or convenience stores," said Paula Jagemann-Bane, who founded Someone With Group three years ago
Someone With Group launched crowdsourcing funding service under the Jumpstart Our Business Startups Act or JOBS Act, a law passed in 2012 that reduced securities regulations in order to encourage the financial services industry to fund small businesses.
Jagemann-Bane previously served as a board member for Frederick Memorial HealthCare Systems in Frederick, Md. She said patients often must drain their 401k retirement accounts, open reverse mortgages and exhaust their savings as well as create mountains of debt to pay off medical expenses.
"I also just marveled at the amount of bad debt healthcare systems write off every year to the tune of $40 billion," Jagemann-Bane, CEO of Someone With Group, said. "Then you consider that $6 billion is spent on cards and flowers for patients every year. Why can't we redirect that money and put it into a debit instrument restricted to medical spending only?"
Patients who sign up for a hospital-sponsored crowdfunding campaign have their own webpage created, which can be shared with friends and family via Facebook, Twitter or email.
If a patient sets their campaign webpage to be private, then only people they email directly will be able to open the URL that accesses their campaign page. If the patient sets their campaign to be public, a friend, family member, contributor or any visitor can share the link via their Facebook, Twitter, Pinterest or Google+ to further extend the effort's reach.
Someone With Group just completed a one-year pilot with Pinnacle Health Systems and Jagamann said the company is now aiming to sign up 100 hospitals by 2020. To that end, Someone With Group is currently undergoing its own fundraising phase, hoping to garner $3.5 million from angel investors to expand the site in order to grow its revenue.
The crowdsourcing provider pays a $50,000 licensing fee for a secure web platform through which hospitals can set up campaigns.
Someone With Group makes its money by adding a 7.5% service fee on top of what contributors give to a patient's crowdsourcing campaign.
"So if I give little Billy $100, I will be charged $107.50. The patient gets 100% of the gift," Jagemann said.
Patients who've used the crowdfunding service on average have raised $2,315.
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