How to Fund for Healthcare

Jul172017

Let’s talk about crowdfunding for healthcare. (If you do not know what crowdfunding is or have not had the chance to read our blog on Introduction to Crowdfunding, please review it prior to reading this blog.)

Healthcare institutions’ missions statement vary, but most concentrate on trust, expertise, compassion, service and/or altruism (The College of Physicians and Surgeons of Ontario, 2017). This is why receiving funding is important–these are important missions, and they need to make sure they are able to keep that promise.

Funding for healthcare is generally directed to research and development. Research in particular is largely integrated with medical education core curriculum (Western University, 2017). Funding assists with development of innovative products, development of therapies, curing diseases, understanding diseases, disease/illness prevention and much more.

Typically speaking, most funding comes from public sources (70%) and the remainder comes from private sectors (Meditek, 2016). Provinces such as Ontario, Quebec and British Columbia have patient-focused funding (Meditek, 2016), which means that funding is given based on number of patients seen and specific procedures done (Meditek, 2016).

Current State of Funding in Healthcare  

As a nation, Canada does not have one main focus for particular healthcare program(s). Canadian healthcare is a  provincial responsibility which makes it difficult to define or maintain a national focus on particular programs (Canada, 2017). This results in a variety of different institutions requiring funds. The limited annual funding has caused researchers to seek alternative sources (Reid, 2016).

One of the issues for medical research of innovative products is that, even after researched, it can still be years before a product can be marketable (The Guardian, 2014), as finding early adopters to donate and conducting the trial process can take years to complete. However, the importance of medical research could not be higher.

“Through the ongoing research and development of innovative products, Canada’s medical technology industry contributes significantly to the effectiveness and efficiency of the healthcare system and to the wellbeing of Canadians, while helping to drive a vitally important sector of our economy – providing well-paying jobs to over 35,000 Canadians.” (Research Canada/Recherche Canada, 2015)

Despite the need for research of innovative products, companies involved with medtech (development of medical devices)  are seeing fewer investors  (Das, 2016). There are organizations such as OCE (Ontario Centre for Excellence), who fund companies involved in development of new services, devices and much more; however, in order to receive large funding they must meet a set of qualifications. This can include being a publicly-funded provider, entering formal legally-binding agreement, being currently profitable, being in good standing and much more (Shepherd, 2017).

Grants are also given for medical research and development, yet, not every proposal is accepted due to limited funds. Without grants, many applications for medical products are left in limbo, waiting many months for response and generally causing resubmitting (Gerstar, 2013). This results in longer delays for the product to become marketable.

Crowdfunding healthcare and/or medtech is an untapped market. In global crowdfunding, of the $5.1 billion raised in 2013, only $9.2 million went to new health and medical devices (Barbella, 2015). This may be related to a lack of a creator who is required to develop the campaign (Reid, 2016). This creator ideally has to maintain a strong online presence (Reid, 2016). Crowdfunding campaigns play a big role to generating attention and awareness (Reid, 2016), which is needed in order to tap into those who may be interested in funding.

Examples of Healthcare Crowdfunding

An example of a medtech crowdfunding campaign is from Dr. Gregory Czarnota, a chief of radiation oncology; and Michael Kolios, an associate dean at Ryerson University’s faculty of science (Gerstar, 2013). They were unable to gain grants for a software that can help better manage breast cancer treatments (Gerstar, 2013). The purpose of the software is to help determine if chemotherapy is working (Gerstar, 2013). The impetus for this product is the alarming fact that chemotherapy for breast cancer patients is successful less than 50% (Gerstar, 2013). Companies they approached for funding said their idea was great, but they were asked to come back when it was developed (Gerstar, 2013). However, Dr. Czarnota and Mr. Kollos knew without proper funding, they would be unable to develop the product. They were unsuccessful in reaching their goal on Indiegogo but did raise up to $53,390. Due to the attraction and level of awareness achieved by the campaign, MaRS Innovation stepped in to help fund the project.

TrueNorth Healthcare also used crowdfunding to develop their service. TrueNorth Healthcare created cloud-based platforms that assist with medical planning (TrueNorth Healthcare). The purpose of the service was to help doctors know the kind of care their patients desired. TrueNorth Healthcare helps patients pick their Advocate who make important healthcare decisions when the patient is unable to. The platform allows users to create and share important electronic documents. The platform is also accessible through electronic medical platforms so they can be made available when needed (such as in the hospital emergency room).

Other successful campaigns mentioned in previous blogs, include CureCrowd and Eve Medical. Both used crowdfunding to fund and create their product/service.

How to Fund for Healthcare

 

Each industry has its own unique environment, but here are the most important things to keep in mind when developing a crowdfunding project for healthcare:

  • Keep it simple.
    • Due to the nature of your industry, your potential investors may not be able to understand all technical or medical terms. It is best to keep it simple. Avoid looking at the campaign from your perspective; look at from theirs.
  • Use visuals.
    • Using visuals will help resonate with your potential investors. As people retain 65% information from videos three days later (Mawhinney, 2017), video will allow you to educate your investors in a quicker pace. This is also important since video content in 2017 will represent 74% of all internet traffic (Mawhinney, 2017).
  • State your mission statement and build your brand.
    • Mission statements help your investors connect with you and understand your purpose.
  • Dedicate a marketing person(s).
    • Crowdfunding campaigns take time, planning and resources. It is beneficial to have a dedicated person to help mitigate the stress. If you are unable to provide a staff member, bv02 we can by providing you with the necessary tools for success.  
  • Leverage your credibility.
    • There is a lack of trust investors have for companies they do not know, especially when referring to health products. If you have known investors or press mentions, it is best to educate your potential investors. Also emphasize your credible research, such as:
      • Does it work currently? Has it been tested?
      • Is it FDA and/or Health Canada approved yet?

Each of these will help gain trust for potential investors.

  • Develop a plan and a promise to give.
    • In order to reinforce your trust, advise your plan.
      • What is your promise?
      • Where is the money going?

It is best to help fill the gap of any questions your investors may have.

  • Say Thank You.
    • The competition for investors is high. Campaigns that are for ‘must have’ gadgets tend to grab the attention of people quickly. Those who do donate to you deserve a thank you.
  • Use storytelling: emotional engagement is just as important.
    • People are social creatures. They like to connect and understand. Storytelling can provide relevance and can increase the likelihood of donating.

Crowdfunding for healthcare is relatively small in comparison to crowdfunding other industries. However, there is a significant need for additional funding. The main issue is to help potential donors understand the importance of donating to healthcare projects.. bv02 can help you run a successful crowdfunding campaign; we’re eager to hear your call.
Reach out to us to find out more, sales@bv02.com . We like helping passionate people meet their goals, and we can help you with the crowdfunding platform, campaign marketing and research.  

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