A New American Healthcare System
Solving Healthcare 3: Review of Crowdfunding Networks and CrowdHealth
I’ve been thinking a lot about the future of America's health and our healthcare system. The current system is failing to improve healthspan per dollar. Chronic disease is weighing heavily Americans, including me. Obesity, allergies, autoimmunity, depression, diabetes, cognitive issues, heart disease, and so on. There’s nothing in the laws of physics that says we can’t eradicate these, as we did leprosy and bubonic plague. Fundamental to this vision of far superior health in America is aligning financial incentives toward that future. New systems are being designed and implemented that will be a better user experience, less costly, and accrue better health for America.
Who Pays
A fundamental part of the healthcare system is who pays.
Who is paying has a lot of power.
Placing that control with insurance companies (who own pharma companies) has yielded poor results, to say the least. They deny reasonable claims, and require people to take pharma products that mask symptoms, before treatments that address root causes. It’s a deep rabbit hole of darkness. In the long run, twisted incentives make the legacy health insurance system profit more from chronic disease and increasing prices. And that’s the result we’ve gotten.
But we need some form of insurance - some way to socialize large health expenses when someone gets hit with unexpected illness or injury.
Pooling money with an insurance company and asking them to pay for our treatments is just one way to do it. Many countries have the government do that. And it kind of works, some of the time.
Another way is a crowdfunding network, such as CrowdHealth, which launched in 2021, a few years after the Trump admin repealed the mandate that everyone has to purchase ACA insurance. I wrote about how CrowdHealth works in Solving Healthcare 1 and how it costs so much less. So far, a dozen people have joined CrowdHealth from reading the latter.
Rather than pooling money before bills arise, members request funding after they have a health issue. The money goes straight from contributing members to requesting members, without a middleman taking a cut. The administrator of the crowdfunding network collects a flat monthly fee.
This is a more natural way.
It removes the bureaucracy between health providers and patients, resulting in lower prices. It also incentivizes better health. The company facilitating the crowdfunding network has a clear incentive to keep bills low, but not at the expense of a member’s health.
Crowdfunding networks aren’t a good fit for everyone in America. Some people have exceptional medical conditions that require long-term intensive care. For those people, it probably makes the most sense for the government to socialize those expenses across the tax base. This is what’s done now via Medicare and Medicaid.
People in a crowdfunding network are incentivized to keep others healthy. In my crowdfunding network, CrowdHealth, we share what we’ve learned in our online community (a telegram channel). We share doctor recommendations, product recommendations, book recommendations, answer each other’s questions, and keep each other company (as well as one can in a digital setting).
What gets paid for
In the insurance model, you either get approved or denied funding, based on the judgments of nameless, faceless insurance administrators.
In the 90s, Lyme disease was running rampant around Lyme, CT, where we lived. My family and others had to petition lawmakers to force insurance companies to pay for my father’s life-saving treatment, IV antibiotics.
Is that the world you want to live in?
A crowdfunding system is different. In mine, a health expense falls in one of four categories:
Eligible with no initial commitment (deductible): This includes an annual preventative care doctor’s visit, telehealth urgent care, and various preventative care tests.
Eligible for funding beyond the $500 initial commitment: The member guide outlines what is eligible for funding. Members can go to any doctor, including MDs, OD, and NDs. The emergence of crowdfunding networks is an opportunity to shift the healthcare system from reactive allopathic care (pills and surgeries after symptons emerge) to proactive functional care (preventative, root cause focused). Ultimately, each crowdfunding network needs to decide a process for determing what is eligible for crowdfunding.
Not eligible: Oh you want a sauna for your house to help your health?
Variable: Even if something is not technically eligible for CrowdHealth family adopted a child. There were $3,000 of unexpected healthcare bills associated with the adoption. This wasn’t outlined as eligible for funding in the guide, but the CrowdHealth team sent a message to members that there’s an opportunity to contribute to this family. I went to Venmo and sent a contribution. Seeing and reading the messages from other CrowdHealth members on Venmo made me teary-eyed.
To be clear, the crowdfunding is not usually run through Venmo, this was an exceptional
Sometimes people request funding for their health bill, and they actually get MORE than the cost of the bill, because generous members in the network have empathy for and extra capital.
Can you imagine an insurance company paying you more because they know what you’re going through?
The funding facilitator, in my case, CrowdHealth, has outlined what is eligible for crowdfunding in the member guide. But this is an impossible job to ever complete because there are countless medical treatments and new ones are always being invented. So there’s a process for determining what is and isn’t eligible for crowdfunding that involves CrowdHealth management, third-party healthcare providers, and network members.
People won’t want to join a network that doesn’t fund treatments they might need, but also they won’t want to join a network that is funding high-cost, low-efficacy, perhaps unnecessary treatments. America needs a plethora of healthcare crowdfunding networks, so consumers have options. Plus, competition breeds innovation.
New Technologies
I see the crowdfunding model as the bedrock of a new system that integrates things that have been pushed aside in conventional healthcare: preventative care, functional medicine, metabolic therapies, nervous system therapies, and new technologies.
I foresee a user creating a ticket (a health issue—a discrepancy between their experience of life and the one they prefer), and the system doesn’t stop working until that ticket is closed. The incentive structure is such that fewer tickets means more profits. That’s the foundation of my preferred future.
Beyond new ways of paying for healthcare, other game changer include AI and lower cost testing, which could enable much more personalized medicine. The usefulness of AI is increasing. Naturally, more and more people will continue adopting AI systems to help with their health.
These two these things: new crowdfunding systems and AI-native personal health systems are poised to change the lives of millions of Americans, making healthcare lower cost, and more effective and enjoyable.
More on this topic
The guy who accidentally shot himself and how CrowdHealth costs so much less
You may have heard of CrowdHealth. It’s one of the fastest-growing startups in healthcare. In Solving Healthcare Part 1, I wrote about how it works and how the incentives differ from health insurance.
What Luigi could have done instead, Solving Healthcare 1
I was at a café in downtown Austin with Andy Schoonover, the CEO and founder of CrowdHealth.
Thanks for reading, and have a great rest of your day. Check out my experimental book of that combines memoir, sci-fi, and poetry.
Endorsements
CrowdHealth is an alternative to US health insurance that I use. Discount code: BIGWIN
The Pathless Path online community for creators
Tiny Health gut health test for actionable insights. Discount code: CHRISJ
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I like the ambition here, but I think you’re glossing over some pretty thorny realities. The crowdfunding model you’re describing works best in small, tight-knit, relatively healthy groups. Once you try to scale it, you run into all the same problems as insurance: how to prevent gaming the system, how to deal with high-cost chronic cases, how to set eligibility rules without ending up in the same bureaucratic wrangling you’re trying to escape.
There’s also the basic math: if the healthier, more affluent folks peel off into private networks, that leaves the sicker, poorer, more expensive cases concentrated in whatever public safety net remains. That’s not just “edge cases,” it’s a structural risk, and it’s why even some of the most libertarian healthcare reformers still acknowledge the need for compulsory pooling.
As for governance --- right now you’re picturing a generous, self-policing community with aligned values. But generosity and trust don’t always survive scale, anonymity, or a few bad actors. Sooner or later you either put guardrails in place (hello bureaucracy) or watch the thing fall apart.
Same with AI. I get why you’re excited, but “prices going down, usefulness going up” isn’t the full story. Bias, privacy, misdiagnosis, and over-reliance are already major issues, and none of that gets cheaper just because the tech does.
There’s clearly a lane here for certain groups, especially the healthy and tech-comfortable. But the way you’ve framed it, it sounds like a universal fix when it’s probably a niche solution unless some of these bigger structural and human factors are addressed.