STATE OF THE CROWD

My fellow Crowd members, as we prepare to enter 2025, I am pleased to give you a brief “State of the Crowd.”  

When we started CrowdHealth in April of 2021, we had three questions. 

1. Is this payment model viable: can we build a peer-to-peer funding platform that can viably pay for large healthcare bills? 
2. Will this model pass regulatory scrutiny?
3. Will people buy it?

I’d like to share with you the status of these three questions as well as where we are financially as a company.

IS THIS PAYMENT MODEL VIABLE?

SUMMARY: Yes. It’s working and with some improvements it can work even better.

CrowdHealth launched in October 2021 after six months of planning and development. This month marks our third anniversary of crowdbuilding! I will be forever grateful to that guy in Houston, TX who became our first non-employee member. Member #1, if you are reading this, I owe you a gift. 

Three years after he signed up, we are on the precipice of helping 10,000 members fund $10M worth of medical bills! Additionally, we estimate that our members have saved about $10M during that same timeframe. My family alone has saved $20,000 just this year. The model is working…but it can be better.

Despite this success, we know we still have work to do. Given that we are still operating like a startup, characterized by nimble decision making to respond to the needs of the Crowd, we have many processes in place that I can only characterize as “adequate.” We are fortunate that you, the Crowd, have given us some grace in the places where we aren’t perfect. In 2025, we are focused on making some of these processes more effective, and by doing so, we believe we can further decrease bills by 15-20%.

The place where the Crowd has surpassed all expectations is in its ability to get the bills funded. In fact, 99.8% of member medical bills submitted to the Crowd have been successfully funded. In every case where the Crowd decided not to fund, the requesting member was either unwilling to help others when they needed help, or they paid a price that was significantly higher than market rates. The model is working.

This always begs the question: that’s great, but what about medical bills that are not eligible for crowdfunding? We always hear of health insurance denying claims. It’s the reason I was compelled to start CrowdHealth: my insurance plan denied a claim for my daughter’s ear tubes due to a perforated eardrum. I was stuck with an $8,000 bill. We are committed to  being totally transparent about what the Crowd funds and what it does not, and the status of every bill submitted to CrowdHealth is now available on our website. You can find those reports here. 

WILL THIS MODEL PASS REGULATORY SCRUTINY?

Summary: It has so far, and we are making some strategic changes to ensure that it continues to do so in the future.

CrowdHealth is proud of the work we do and always willing to discuss our innovative crowdfunding platform with regulatory agencies (blue, red, and purple states). These regulatory conversations have yielded great insights and have been blessings in disguise. Through this dialogue, we have become attuned to the concerns of regulators. It has sparked new ideas about how to create our product strategy to solidify our regulatory standing without changing the user experience. As the Crowd continues to grow and thrive, we expect to see additional states approach us in 2025, and we are confident in our ability to demonstrate the value we provide to their constituents while prioritizing consumer education and compliance. 

At the federal level, there continues to be partisan disagreement about the future of the Affordable Care Act. Tuesday’s election results will provide more insight into the future of healthcare policy, but regardless of the outcome, it is unlikely that either party will push for reinstatement of the individual mandate.

WILL PEOPLE BUY IT? 

Summary: Yes, and I think we are at an inflection point.

Despite the Crowd’s ability and willingness to fund very large bills, our biggest hurdle continues to be FUD (fear, uncertainty, and doubt). While we believe that this is reasonable given our model is so different from health insurance, we have worked hard to build trust by promoting transparency in three ways. 

1. As mentioned above, we make the outcome of every bill publicly available on our website. We aren’t hiding anything, and we are proud of our Crowd’s commitment to helping members in their time of need. 

2.  We are adding even more data on our homepage, including the number of members served to date, total crowdfunding to date, and crowdfunding success rates. We began this in early summer of 2024, and our ability to increase sign ups has improved significantly. We will continue to promote transparency and data sharing in hopes that it will help people better understand our service and the Crowd’s ability to fund bills. 

3.  We have funded dozens of cancer cases, major cardiovascular and neurological conditions, motor vehicle accidents, NICU babies, and even a gunshot event (6 entry/exit wounds, ouch). From a personal perspective, early on in our journey, I was worried about these bills. Now, whenever I hear of a big bill on the horizon, I’m actually excited that we get to help one of our members tackle a big health problem. I’ve gotten to talk directly with our member who survived the gunshot wounds to relay the news that we were going to fight for him and his family to get his bills paid. I’ve spoken directly to the dad of one of our littlest members born with down syndrome, spent weeks in the NICU, and had to have an open-heart surgery.  I love that we can help these members manage large events in a way that makes them feel cared for and supported.  These are my favorite moments as the CEO of CrowdHealth.

CrowdHealth, Inc Financial Update

We have had multiple opportunities to grow faster, but we believe that a conservative growth trajectory is the best strategy for the Crowd and the long-term success of CrowdHealth, Inc. I’d like to discuss a couple decisions that we have made to give you some insight into our growth strategy. 

First, there seems to be a general startup ethos of growing fast at all costs. This is typically characterized by large uneconomical spending, with multiple rounds of venture capital investments, and with the “number of members” being the vanity metric. Our goal has been a bit different. We want to grow the Crowd in such a way that we have as many members as possible to ask in the event of a health event but to do so in a way that is economically viable for CrowdHealth, Inc. If we have a huge Crowd but CrowdHealth, Inc is in financial distress, then that is a disservice to the Crowd. Therefore, we have grown quickly but profitably. We have focused our spending on returning money to CrowdHealth members that refer new members as opposed to spending huge dollars with “Big Tech.” If a member refers another member who sticks around for at least three months, we will give our Crowd member a $250 referral fee per new member. That strategy is a win-win. It allows us to grow profitably, and it returns money to our members.

Second, there is always an instinct to be aggressive with our pricing. The lower the price of the service, the greater the ability to grow. Of course, we want to keep prices as low as possible, but we don’t want to do that by putting CrowdHealth, Inc at risk or by limiting the Crowd’s ability to help other members fund their bills. As such, we have decided to increase our Advocacy Fee a modest $5 from $50 to $55. We are doing that because of our desire to capitalize on some opportunities to reduce bills. We have taken on more internally at CrowdHealth, Inc to reduce these bills, and will continue to do so in 2025. At $55 per member per month we believe that we will have enough to continue to grow the Crowd, significantly improve our member experience, and make some strategic investments to reduce our members bills. 

Additionally, we are raising our max contribution requests from the $135 (single members under 55), $270 (single members 55+), $405 (families 4+) to a $140/$280/$420 structure. We are not doing this because we see some big changes on the horizon. In fact, the bills are as low now as they have ever been and the bills in negotiation are near an all-time low. We’ve only asked for the maximum contribution twice in the three years that we have been in business. We are doing this just to be conservative and to ensure that we continue to underpromise and overdeliver. 

We hope you’ll see this pricing strategy as an indication of how we make decisions internally. Even though we would make more money by growing the Crowd faster if we kept the same pricing structure as 2024, being there for our members in their time of need is of paramount importance. We want to see the Crowd successfully fund bills, and we want CrowdHealth to be financially healthy while providing you with a world class experience. 

Thank you for your trust and for being a member of the Crowd. I want to personally thank you again for your grace as we strive to refine some of our processes to better serve you. We aren’t always perfect, but hopefully you’ve seen through our responses that we truly have a heart to serve you well. As always, please feel free to reach out with any questions.

Andy

CEO, CrowdHealth