A Health Group Gets Drug Companies to Step Up to Support Patients

At 32, Mike Banigan, a technology entrepreneur, was diagnosed with Crohn’s disease, an inflammatory bowel ailment. Even though he had insurance, he was required to pay $1,600 for each treatment of medicine to combat the disease.

He could afford the payments, but he wondered how others could. So in 2003, Mr. Banigan decided to do something about the high cost of medication by founding the Chronic Disease Fund to make sure patients receive life-saving drugs at a low cost. The fund serves patients diagnosed with cancer, chronic, or life-altering diseases who have insurance or are eligible for Medicare but still can’t afford to pay for their drugs.

Seven years later, his group is among the most successful charities in America, ranking No. 126 on The Chronicle’s list of the organizations that raise the most from private sources. It is also larger than the two other organizations that do similar work—the HealthWell Foundation, in Gaithersburg, Md., and the Patient Access Network Foundation, in Washington.

“When you have a chronic disease, you are on medication for life,” says Mr. Banigan, 43, a serial entrepreneur who still heads two technology companies in the health-care-services field besides running a charity. The fund covers more than two dozen diseases such as multiple myeloma, age-related macular degeneration, and multiple sclerosis.

The fund spends 91 percent of the money it raises on patients’ drugs, with the rest spent on administrative costs, Mr. Banigan says. Last year, it provided financial aid to 62,253 patients and aided 15,500 more in getting help from other sources.

“We have more patients than we can provide for,” he says.

Drug-Company Support

The Plano, Tex., organization raised $150-million in 2009, a 67-percent jump from 2008’s $90-million. Most of that money came from donors that the fund says it can’t divulge because of laws that prevent doctors from choosing to write a prescription of a drug that’s been donated by a drug company to the fund (or even, patients feeling compelled to ask for a specific brand of medication). The confidentiality is designed to prevent such abuses.

Last year, the fund received 95 percent of its cash contributions from four organizations, one of which gave $57-million.

Mr. Banigan says about 90 percent of funds come from drug companies, even though he seeks financing more broadly. “We do seek foundation grants but have not gotten very many,” he says. “We have zero government appropriations.”

Approval in Minutes

The fund is proudest not of how much it raises but of how it has used technology to stretch its donations far and reduce the time and energy its beneficiaries must spend to get help.

The fund makes the application process easy for patients so they can be approved in minutes. It works with specific pharmacies that already have access to databases that check whether a patient has insurance instead of doing its own due diligence to figure out which patients legitimately need help.

Here’s how it works: A patient tells the charity what he or she earns, plus other information, to get conditional approval to receive the first installment of medication. For monthly prescriptions, a refill is due in 28 days, so the patient must provide proof of income and a signed application within 14 days. If that information is delayed, the fund will call the patient and say it must have the information in the next week to continue providing financial assistance. Once it gets the proof of income, the fund then pays the patient’s out-of-pocket costs directly to the pharmacy or doctor, eliminating cash-flow problems that can prevent patients from getting their medications.

“The last thing you want is for the application process to cause delays,” Mr. Banigan says. Usually that application process can take about four to eight weeks. “We get patients approved in the same day,” he says.

Funding is approved on a calendar-year basis, so patients have to apply every year. They also have to be compliant with their drug-therapy program in order to receive continued financial assistance.

Expanding Services

But no matter how efficient the process, the charity has been hit hard by the economic downturn. The number of patients who are turning to the fund for help has grown by 20 to 25 percent. And even though the new federal health-care overhaul will help many of the nation’s poor, it will still not help them pay the full cost of medication, so the Chronic Disease Fund does not expect demand for its services to diminish.

Since it knows it can’t keep up, it is seeking to expand its services beyond paying for prescriptions. The fund plans to provide medical debt-counseling services for its patients by January, and hopes to win federal grants for the new initiative.

The charity also retooled some of its fund-raising approaches. Last year, the fund expanded the focus of its annual gala called the “Benefit of Giving” from one evening of toasts to a two-day educational workshop. It invites prospective corporate donors and participating pharmacies to the workshop in the hopes that finding out more will help encourage them to give. “We educate them on health-care reform and diseases like cancer and aging, and the impact on patients,” Mr. Banigan says.

But the approach was costly. Last year’s gala raised $93,800, but the fund spent $113,453 to put it on—losing almost $20,000 over all.

“It’s incredibly expensive to run an event,” he says. “The net revenue is minimal.”

But it learned lessons from that event, and last month, its gala raised $53,539, after expenses, with former Arkansas Gov. Mike Huckabee appearing as a guest speaker.

Fund-raising costs, too, rose almost fourfold last year to $2.3-million, from $594,290 in 2008, mainly due to increased budgets in direct-mail fund raising as well as occupancy costs, which increased after the fund moved to bigger headquarters.

This year, the fund is focused on finding ways to raise money through social media and other online efforts. In September the fund decided to reach out to individuals for donations with a new Web site called “Good Days,” reducing the reliance on the organization’s name. “Chronic disease and cancer—it has a negative connotation,” Mr. Banigan says. “It’s very difficult to feel good about donating.”

The “good days” slogan is an effort to change that—a positive, supportive message.

“When you have a chronic disease, you measure each day one good day at a time,” he says. “You try to block out bad days and focus on good days.”

So far, the signs are that the new approach is paying off. The fund-raising page on its old Web site used to collect $300 a day. Two days after the “good days” approach was unveiled, the Web site raised $2,800.

By moving most of these fund-raising activities online, Mr. Banigan says, the fund saved $1.5-million. He said direct mail was “ineffective” and after 16 months of trying the approach, he decided to end such broad solicitations last year. “It shows that we’re not wasting money on things that don’t work,” he says.