When Watsi.org first launched, we asked Medical Partners to delay providing medical care to patients until their profiles were fully funded on Watsi and the funds were transferred to the Medical Partners’ bank accounts. However, we very quickly learned that there was a better way to manage this process.
There were three main issues with our original model:
First, because it was difficult for us to accurately predict exactly how long it would take a patient’s profile to be funded on Watsi, it was hard for Medical Partners to efficiently coordinate patient care. Providing medical care, especially in the developing world, is a very logistically intensive process. Medical Partners have to manage transportation, doctors, nurses, referrals, recovery, and follow up. Not knowing if or when Watsi funds would be available made this process even more challenging, if not impossible, to manage efficiently.
Second, by forcing our Medical Partners to treat patients on our timetable, we were often inadvertently increasing the cost of providing them care. Most patients that visit our Medical Partners live hours, if not days away. Requiring patients to wait until their profiles are fully funded on Watsi before receiving care means they have to either a) travel back home and then return to the Medical Partner once their treatments are fully funded, incurring double the transportation costs; or b) pay for lodging and food near the Medical Partner for an unknown period of time while they wait for their treatments to be funded. Furthermore, once the treatments are funded on Watsi and the funds are transferred, the Medical Partners would have to incur the expense of notifying the patient, which often means sending someone out to physically find the patient and notify them in person.
Third, requiring that our Medical Partners delay patients’ medical care until their profiles were fully funded increased the risk that patients would needlessly suffer and/or die while waiting for care. People with injuries or illnesses often need care sooner rather than later. We believe it is immoral to force patients to wait for care when it’s possible for that care to be provided immediately. Furthermore, when patients leave our Medical Partners, the possibility exists that the Medical Partners will not be able to locate the patients once their care is funded.
In an effort to work through these issues, we created an “Emergency Treatment Provision” whereby Medical Partners could treat patients immediately upon having their profiles accepted by Watsi, operating under the guarantee that Watsi would cover the cost of care. (We guarantee funding for patients by strictly limiting the number of profiles we accept from Medical Partners to match current donor demand, and by leaving profiles posted until they are fully funded.)
This worked almost too well. With the funding guarantee in place, many of our Medical Partners began providing medical care to patients immediately after their profiles were accepted by Watsi (sometimes within hours) regardless of whether or not the profiles had been fully funded, or even posted online yet.
This opened our eyes to two things:
First, Medical Partners often had the money to cover the cost of providing care to patients in the short term.
Second, it was in the best interest of the Medical Partners, and most importantly their patients, to receive care on their schedule, not ours.
As a result of these learnings, we instituted our current policy, which operates as outlined below:
1. The patient is diagnosed and their profile is submitted to Watsi.
2. Watsi confirms that the profile meets our criteria, notifies the Medical Partner that it has been accepted, posts it online, and donors fund it.
3. The Medical Partner provides care to the patient as necessary, operating under the guarantee that Watsi will reimburse them for the cost of care.
4. The Medical Partner submits a treatment update to Watsi, verifying that the treatment has been provided.
5. Watsi transfers funds to the Medical Partner as soon as the patient’s profile is fully funded.
Watsi now works a lot like a social health insurance program for poor people in the developing world. A patient goes to a facility, the facility verifies that the patient’s insurance (i.e. Watsi) will pay for the care they need in the event the patient can’t pay for it him/herself, and then the facility provides care to that patient operating under the guarantee that the insurance company will cover the cost.
In fact, the only difference between Watsi and a traditional health insurance company is that we crowdsource the cost of claims from the general public instead of deducting them from the aggregated premiums paid by the participants in the insurance program (i.e. exposures). Furthermore, we pay out 100% of what comes in, arguably making us the most efficient and equitable social insurance program in the world.
Beyond being more efficient and equitable for patients, our new process also has some unintended benefits:
First, under the old process, there were times when patients didn’t end up receiving care even though the funds had already been transferred to the Medical Partner. When we requested a refund from the Medical Partner (in order to refund donors since the medical care they funded wasn’t provided), it was a logistical nightmare for them to return us the money, and we had to do some slightly complicated (and time consuming) accounting gymnastics to recover the funds by deducting them from future transfers.
Fortunately, we have amazing Medical Partners that we have vetted and we trust. However, we would be naive to think that as we grow, there will never be any risk on the Medical Partner side at all. What would happen if we transferred funds to a Medical Partner, and they went bankrupt before all of the treatments were provided? There is obviously a very tiny chance that this would happen, but we feel that it’s our responsibility as an organization to receive verification that a treatment has been provided (via a signed patient update declaration and photo) before transferring funds for that treatment. At the very least, if/when a treatment isn’t provided for any reason, we’re able to refund donors much faster, with greater confidence, and without having to bother our Medical Partners for a refund or waste their time explaining our accounting gymnastics.
Second, as we grow, transferring funds to our Medical Partners on a patient by patient basis is not going to efficiently scale. Not only is it logistically difficult for Watsi, but it’s likely an accounting nightmare for our Medical Partners to receive dozens of individual transfers every month. As a result, there will probably come a time when we’re going to have to switch from individual to monthly transfers. Had we required Medical Partners to wait for Watsi funds before providing care, patients whose profiles were funded immediately following a funds transfer would have to wait upwards of an additional 30 days to receive treatment. As well, consolidating funds into fewer transfers reduces transfer fees and accounting costs for everyone involved.
The last thing we’d like to address is why we don’t send funds as soon as a patient profile is fully funded on Watsi, regardless of whether or not the patient has already received care. We avoid doing this for three reasons:
First, we don’t have the operational capacity, at the present moment, to manage hundreds of profiles, all of which might follow a different process (e.g. some funds are transferred before the patient receives care, some funds are transferred after the patient receives care but before we receive an update, etc.). This would be a complicated, expensive, and inefficient model to implement and maintain.
Second, if we sent funds as soon as they were available, it would make it incredibly challenging for Medical Partners to calculate how many Watsi patients they could support at any one time. Because we can’t predict exactly how long it will take a profile to fund, Medical Partners would have no way of knowing which funds would arrive before the patient needs to receive care and which funds would arrive after the patient needs to receive care.
Third, a process like this would make it extremely difficult to describe to donors and Medical Partners how Watsi actually works. In fact, we wouldn’t even be able to say with confidence which profiles were funded before or after medical care was provided because there is often a lag time between when a patient receives care and when an update is sent to Watsi. As a result, the best solution was to make it an organizational policy that every profile must be accepted before the patient receives care, and that we must receive verification that the treatment was provided before transferring funds to the Medical Partner. In our opinion, this is the only way we can be 100% clear and honest with both our Medical Partners and our donors about our operations.
We implemented our current process, because after a thoughtful analysis, we determined that it will provide the most utility to the patients we serve. We are a very young organization (less than six months live), and there is no doubt in our collective mind that this process will continue to evolve as we learn and grow. Nothing at Watsi is ever set in stone, and we’re always looking for ways we can improve.
We’re in the fortunate position of only having one goal as an organization: to provide medical care to a million people in need. We have no conflicts of interest, no bottom line, and no competitors. As a result, we have the unfair advantage of being able to be 100% transparent, no matter what.
We’re not going to hide the fact that being 100% transparent provides us enormous benefit. It means we can tap the power of the crowd to help us improve. Imagine if Coke could release their secret recipe to the world and crowdsource improvements, without fear of a competitor copying it. As successful as Coke is, we’d bet that the collective wisdom of the crowd could improve their product.
As long as Watsi exists, we will be 100% transparent, because we believe you deserve to know exactly how your money is being spent. In return, we hope you’ll share your feedback and ideas with us, so that together, we can accomplish our goal of bringing medical care to a million people in need.
tl;dr (too long; didn’t read) — As a result of learnings during our first few months of operations, Watsi now guarantees Medical Partners that we will cover the cost of care for every patient profile we accept. As a result, Medical Partners now provide care to patients whose profiles are accepted by Watsi, operating under the guarantee that Watsi will cover the cost of that care once they send verification that the care was provided. This new process has a number of benefits, including:
1) Makes scheduling care easier for Medical Partners
2) Reduces the cost of care
3) Reduces risk of needless suffering/death
4) Makes donor refunds easier, faster, and more efficient
5) Makes transferring funds more cost effective and scalable
As always, we’re 100% transparent and completely open to feedback. We’re sure our operations will continue to evolve at a rapid pace, and we’d love to hear from you if you have any ideas that will help the Watsi community accomplish its goal of funding medical care for a million people in need.