|As supplementary security to the basic medical insurance (BMI), commercial health insurance (CHI), charitable donations, mutual aid, and other crucial elements have made significant contributions to the multi-layered medical security system in recent years. In our previous article, “City Supplementary Commercial Health Insurance, the Prospering Inclusive Solution for All”, we briefly introduced the inclusive supplementary medical insurance that connects the BMI system with the CHI. In this article, we will describe the use of charitable donations for medical expenses, specifically online crowdfunding for critical diseases.
The Development of Online Crowdfunding for Critical Diseases
“Crowdfunding” is an alternative financing method. It is the practice of funding a project or venture by raising small amounts of capital from many individuals, typically via the Internet. Crowdfunding applies to social welfare, eventually moving into financing health expenses. Specifically related to crowdfunding for critical diseases, this model helps individuals or families seek financial support from the public for medical expenses through online and social media platforms.
In 2013, the Ministry of Civil Affairs released an “Opinion on Strengthening the Connection between Medical Assistance and Charity”. This document encouraged charitable organizations to explore different ways to use their charitable resources to assist impoverished patients with critical diseases, and to carry out diversified medical assistance services. In 2014, with increasing encouragement from the National government, along with the rapid development of the Internet and social media, public charities, such as Tencent and the Alipay Foundation, emerged. In this way, online charitable platforms have begun to play a critical role in supporting the public’s needs. Soon after, Qingsongchou, a large healthcare platform, launched an online fundraising campaign to help individuals and families raise funds for medical expenses. This important development marked the beginning of online crowdfunding for critical diseases.
In 2016, the Ministry of Civil Affairs of the People’s Republic of China released the selection results of the first batch of fund-raising information platforms for charitable organizations, ushering in the standardized development of Internet charities. In 2017, there were 17 online crowdfunding platforms for critical diseases on the market. As of May 2020, more than 300 million people have supported the relief project on the platform. More than 900 million people give donations totaling up to nearly 30 billion RMB and helping more than one million families pay their medical costs.
An Example of Online Crowdfunding for Critical Diseases
One of the leading online crowdfunding platforms for critical diseases in China is Waterdrop. As of the end of March 2021, more than 360 million people had donated more than 40 billion RMB and assisted nearly 1.9 million patients with serious illnesses through the Waterdrop online platform. Waterdrop leverages both digital and financial technologies to reinforce risk control management and ensure the data safety of its users. The platform integrates artificial intelligence (AI) and blockchain technology to improve the transparency of the donation process, while protecting the interests of both donors and beneficiaries. One example of this is its triple cross-verification, which includes live and real-time facial identification, manual personal ID confirmation, and system information from the Ministry of Public Security for the fundraisers. Furthermore, Waterdrop utilizes cloud computing architecture to set up a closed-loop chain and applies machine learning to help fix and improve processes of risk control, while providing more personalized and targeted services for the user.
Waterdrop is currently working closely with experts in the medical and insurance fields to develop a disease-specific database that can systematically analyze key information, such as treatments and expenses for different diseases. This database can be used not only for auditing purposes, but even more importantly, to ensure users are receiving the right support.
Supervision of Online Crowdfunding for Critical Diseases
In addition to the application of digital and financial technologies, the leading online crowdfunding platforms for critical diseases have collaborated to issue relevant agreements which plan to strengthen the regulation and management of these and future crowdfunding platforms. In August 2020, under the guidance of the Ministry of Civil Affairs, Qingsongchou, Waterdrop, Aixinchou, 360 Fundraising for Critical Diseases, and other platforms, signed a “Self-discipline Proposal of Internet Service Platform for Help-Seeking of Personal Critical Diseases” and the “Self-discipline Convention of Internet Service Platform for Help-Seeking of Personal Critical Diseases 2.0“. These proposals and conventions were created with the goal to increase the obligations that the platforms have to supervise and monitor the recipients of the funds. Together, the platforms wished to further improve self-management and promote the sustainable development of the online crowdfunding industry for critical disease platforms. The 2.0 version of the self-discipline measures was created in response to situations in recent years, such as false fundraising, repeated fundraising, and inappropriate fund usage. The 2.0 version also requires all platforms to strengthen their internal management, take practical measures to restrain employees and partners, and to further establish, improve, and put forward specific requirements for bottom-line rules. The self-discipline initiatives further include: advocate collaborations with public charitable organizations, strengthen the pre-review of information, build an information publicity system, establish a multi-party joint consultation mechanism, counteract rumors and hype malicious behavior, establish a blacklist of dishonest fundraisers, promote industry self-discipline and co-governance, and proactively spread positive energy.
In order to promote the implementation of the self-discipline convention, the platforms jointly commissioned the Beijing Xinmin Social Organization Capacity Building Promotion Center to form a third-party work team for the self-discipline mechanism.
Online crowdfunding for critical diseases is a solution that has emerged from the era of the Internet and FinTech. It has become a relatively more practical approach for people with financial difficulties to seek support and to raise awareness of the public. To some extent, the application of FinTech helps to resolve data privacy issues, reinforcing the platforms’ credibility. The emergence of online crowdfunding platforms for those diagnosed with critical diseases has lowered the threshold for fundraisers in seeking support for unaffordable medical expenses. Since these platforms are a new solution which have only existed for a few years, there are a series of questions surrounding them that still need to be answered. The platforms allow the fundraising process to become an online, non-governmental, “mutual assistance and mutual aid” that originally only existed offline. Unfortunately, at the same time and due to the high number of requests, the complexity of verification on family property status, and the limited supervision of resources, there have been a number of issues involved with these fundraising platforms. The issues arising from the use of an online platform include false information, arbitrarily bidding, fundraising from “the rich”, the misuse of raised funds, door to door fundraising, and competition among different platforms. These problems continue to arise and are constantly being discussed and improved by fintech. As an innovative way to receive charitable donations, these platforms have become an effective supplement to the BMI, as well as a building block for the development of China’s multi-layered medical security system.
Authors: Xiaoqiao Fan | Program Analyst of the Innovator Alliance｜Social Impact Programs and Alliance, ACCESS Health International China