CrowdHealth, a crowdfunding platform for paying medical experiences in lieu of an insurance policy, is integrating Lightning payments with Breez’s Lightning SDK. The United States spends more than twice the average amount of money on healthcare in comparison to other developed nations in a similar economic situation. Medical costs are one of the leading causes of bankruptcy in the United States. It is not a secret that the medical system in the US has its issues.
The CrowdHealth model is based on offering an alternative to the conventional insurance policy at a cheaper price point. For a monthly membership fee of $50 a month, far lower than most insurance plans, CrowdHealth will negotiate medical bills to get the cheapest price possible, handle locating care providers and managing bills, discounted prescriptions on drugs, access to their member crowdfunding service, and more.
The crowdfunding aspect is the core distinguishing feature of the platform. Instead of charging a proper premium to create an insurance fund to draw from for paying claims, users of the platform contribute their monthly fee for the bill negotiation and other features directly from Crowdheatlh, and depend on voluntary crowdfunding from other members in order to meet the funding requirements for actually paying medical expenses. The idea, which seems to be working for its current 5000 member user base, is that people will pay it forward to assist others in the network with their expenses under the hope that those people will pay it back in future if they ever need to cover an unexpected expense.
Prior to Breez integration, the company had been functioning over traditional fiat payment rails, and while this has successfully worked to move funds between members, it introduces two main overheads that are fundamentally not addressable on these rails.
Firstly, the payment fees. A bank wire transfer could easily reach $20-30 for a single transfer, which eats into the donated funds that could be going to the member’s medical expenses. It also introduces an implicit minimum amount: If a wire is needed to transfer the money, will someone pay a $20 fee to donate $2 to someone’s bill? Lightning can improve this situation drastically, with mere pennies in transfer fees for any amount the network is capable of transferring within liquidity limitation.
Secondly, the time required for payment settlement. Bank transfers can take days or even weeks to settle under some circumstances. If a medical procedure is needed urgently, this settlement delay could actually cause physical harm to members if the care provider requires payment up front or shortly after a procedure done on credit. Lightning again helps, settling payments with complete finality in seconds.
Through their Lightning Integration using Breez SDK, an already innovative new business model can streamline its costs and potentially improve the scalability of its members crowdfunding each other’s medical expenses.