Ditch Traditional Health Insurance: Gain Freedom | CrowdHealth CEO Andy Schoonover

Summary

Culture Apothecary with Alex Clark
Episode: Ditch Traditional Health Insurance: Gain Freedom | CrowdHealth CEO Andy Schoonover
Release Date: April 25, 2025

Introduction

In this compelling episode of Culture Apothecary with Alex Clark, host Alex engages in an insightful conversation with Andy Schoonover, the CEO and founder of CrowdHealth. The discussion delves deep into the inherent flaws of the American healthcare system, Andy's personal journey away from traditional health insurance, and the innovative community-driven alternative that CrowdHealth offers.

The Broken Healthcare System in America

Andy Schoonover begins by addressing the fundamental question: Why is healthcare broken in America?

[02:12] Andy Schoonover: "You've got the buyers of healthcare who are these big health insurance plans... and the sellers of healthcare, which are these big hospital systems, they want the prices to go up."

He explains that both health insurance companies and hospital systems are financially incentivized to increase healthcare costs. The Affordable Care Act (Obamacare), while intended to regulate profits, inadvertently contributed to rising premiums by limiting insurers to a 15% profit margin of premiums. This constraint pressures insurers to escalate healthcare costs to grow their profits within the allowed margin.

Andy Schoonover’s Personal Experience

Andy shares a pivotal personal story that exemplifies the system's failure:

[04:31] Andy Schoonover: "My little one... got an $8,000 bill from the hospital for a procedure deemed 'medically unnecessary' by our insurance."

Despite following all protocols, his daughter's necessary medical procedure was denied coverage, leading to a significant personal financial burden. This experience, coupled with statistics showing that 1 in 5 claims are denied by insurance companies—resulting in 200,000 people going bankrupt annually—prompted Andy to abandon traditional health insurance entirely.

Incentives and Profit in Health Insurance

Andy elucidates the principal-agent problem within the healthcare sector:

[19:56] Andy Schoonover: "The people that we trust to pay our bills... are actually not acting in our best interest."

Insurance companies prioritize profit over patient care, often denying claims to maintain or increase profitability. This conflict of interest undermines the very purpose of insurance, which is to provide financial protection in times of medical need.

Health Insurance Practices and Medical Necessity

The conversation touches upon the arbitrary nature of medical necessity determinations:

[09:22] Andy Schoonover: "They decide on medical necessity based upon how well their profitability is doing during that year."

Insurance companies employ algorithms that fluctuate the strictness of claim approvals based on their financial performance, making access to necessary medical care inconsistent and dependent on the insurer’s profit motives rather than patient needs.

The Need for Alternatives: Direct Pay and Independent Doctors

Andy advocates for direct pay models, where patients pay doctors directly without intermediary insurance companies:

[07:44] Andy Schoonover: "If I can pay cash for my procedures or pay the doctor directly, I was getting significantly better prices than United Health Care."

This approach not only reduces administrative burdens and costs but also fosters a more transparent and patient-centered healthcare experience. Independent doctors, who rely on word-of-mouth and direct payments, are incentivized to provide higher-quality care.

The Medical Industrial Complex and Preventive Care

Highlighting systemic issues, Andy discusses how the current healthcare model favors symptom treatment over disease prevention:

[12:13] Andy Schoonover: "The incentive system... they want to get you on long term, chronic conditions because you become recurring revenue."

This perpetuates a cycle of ongoing medical interventions, driving up costs and contributing to poorer health outcomes, such as increased obesity rates and related chronic conditions in the U.S., which are significantly higher compared to other developed nations.

Government Policies and Corporate Influence

The episode delves into the role of government policies and corporate lobbying in sustaining the dysfunctional healthcare system:

[26:01] Andy Schoonover: "The amount of regulation that is required to be in healthcare is astronomical."

Pharmaceutical companies and health insurers exert substantial influence over legislation, often prioritizing corporate profits over public health needs. This entrenched power structure stifles meaningful reform and perpetuates inefficiencies within the system.

The Limitations of Comparison with Canadian Healthcare

While addressing comparisons with other countries, Andy critiques the single-payer system in Canada:

[29:27] Andy Schoonover: "You have quality, speed, and price. You can only have two out of the three."

He argues that while Canada excels in cost management, it compromises on quality and speed, with long wait times and limited choices for patients. In contrast, the U.S. offers higher quality and faster services but at exorbitant prices. Andy posits that a sustainable solution requires balancing these factors without sacrificing one for the others.

Introducing CrowdHealth: An Alternative Model

CrowdHealth emerges as a groundbreaking alternative to traditional health insurance, built on community-based crowdfunding. Unlike conventional insurers, CrowdHealth facilitates direct financial support from community members to cover healthcare costs.

How CrowdHealth Works: Community Crowdfunding

Andy outlines the operational framework of CrowdHealth:

[38:06] Andy Schoonover: "Our member will pay the first $500 of that health event... then we'll go to the community and ask 45 people... to help out this family with $100 each."

When a member incurs a medical expense, the initial portion is covered by their own contributions, after which the community collectively funds the remaining costs. This peer-to-peer support system ensures that large medical bills are manageable without the overreach of traditional insurance policies.

Success Stories and Examples

The effectiveness of CrowdHealth is illustrated through various cases:

[54:20] Andy Schoonover: "We negotiated a nearly $1 million bill down to $200-250,000, which was fully crowdfunded."

These real-life success stories demonstrate CrowdHealth's capacity to handle significant medical expenses efficiently, providing a lifeline for members facing overwhelming bills.

Eligibility and Limitations

CrowdHealth maintains certain eligibility criteria to sustain its community-driven model:

[41:10] Andy Schoonover: "We ask you... to be a member of the community for two years before covering pre-existing conditions."

Additionally, lifestyle factors such as smoking and obesity are considered, promoting a healthier community ethos:

[56:14] Andy Schoonover: "If you are obese... we have had people lose weight and transform their lives through CrowdHealth."

The Vision for Future Healthcare

Andy envisions a future where CrowdHealth scales to millions, fostering specialized communities based on shared values and lifestyles:

[59:07] Andy Schoonover: "I want to continue this community feel where we are a part of our tribe... like vegetarians, carnivores, Christian, Jewish, etc."

This approach aims to create tightly-knit support systems that prioritize mutual aid and accountability, ultimately revolutionizing how healthcare is accessed and financed.

Conclusion: Community as the Remedy

In wrapping up, Andy emphasizes the importance of community in healing societal and healthcare woes:

[62:10] Andy Schoonover: "Every time we've gone through a really hard thing in life... we could not have made that through without our community."

Alex echoes this sentiment, highlighting that fostering strong, supportive communities can address the emotional and financial strains imposed by the current healthcare system.

Notable Quotes

Andy Schoonover [00:00]: "Stay out of the hospital at all costs unless you absolutely have to."
Alex Clark [00:04]: "The average American thinks that because they have health insurance, they're going to be safe and taken care of in a true emergency."
Andy Schoonover [03:24]: "Obamacare definitely juiced it. So you can see the trend and cost for health care once Obamacare was signed, it tweaked up."
Andy Schoonover [07:24]: "I do disagree with him on that."
Andy Schoonover [09:22]: "They decide on medical necessity based upon how well their profitability is doing during that year."
Andy Schoonover [12:13]: "The incentive system... they want to get you on long term, chronic conditions because you become recurring revenue."
Andy Schoonover [19:56]: "The people that we trust to pay our bills are actually not acting in our best interest."
Andy Schoonover [38:06]: "Our member will pay the first $500 of that health event... then we'll go to the community and ask 45 people... to help out this family with $100 each."
Andy Schoonover [62:10]: "Every time we've gone through a really hard thing in life... we could not have made that through without our community."

Final Thoughts

This episode of Culture Apothecary serves as a crucial exposé on the systemic issues plaguing American healthcare and introduces CrowdHealth as a viable, community-centric alternative. Andy Schoonover's insights and personal experiences shed light on the potential for grassroots solutions to revolutionize healthcare access and affordability.

For listeners grappling with the complexities of the current system, this episode offers both a critique and a beacon of hope, advocating for a return to community-based support and direct patient care.