It’s been quite a while since I’ve discussed this subject–and Liberty is to blame for a good portion of that. You may recall that I’ve kept track of the monthly reporting on Liberty’s financials from their monthly newsletters (see here), monthly share amounts (here) and a variety of other changes.
But those monthly newsletters lapsed, and around the same time a lot of complaints started surfacing about Liberty making payments for shareable medical expenses. Liberty eventually attributed the problems to the implementation of a new workflow and software internally, as well as problems accommodating their growth, which to that point had been at a very rapid rate.
So what do we know now?
The plot below is a continuation of what I’ve shown previously. The gap is a result of a lapse in monthly newsletters from Liberty. Those newsletters have been the source of data in the past, but a combination of stopping newsletters for a while and the use of images to display the data that are no longer hosted online left me a hole I’ve been unable to fill.
What you see though is a clear indication, beginning in December 2017, that expenses submitted for sharing suddenly started exceeding the amounts actually shared. By May 2018, Liberty started showing a metric of expenses “in queue for payment”–bills that had been submitted and processed, but for which funds weren’t yet available for payment.
That’s still OK, as far as I’m concerned. If expenses are exceeding the amounts covered by the monthly share amount, we can increase that amount, or change which expenses are shareable. Both of those things happened, as reported here.
But what isn’t OK is that many expenses submitted for sharing weren’t being processed in a timely manner. Liberty attempted to roll out a new web interface, along with new software internally–and it went badly. Or at least that’s their story.
Back in 2017, Liberty’s newsletters would show their average turnaround time, which was shorter, at about 30 days, compared to 45 days for the conventional insurance industry. That went out the window. Now, they talk about processing within 180 days, which is way too slow. There are lots of stories about expenses and records that have been lost and needed to be resubmitted–of course, they’re anecdotal. We don’t know how common these kinds of errors actually are, but in any event, they’re inexcusable.
If you look closely, you’ll also see that through the middle of 2019 there were several months where expenses shared (i.e. paid) far exceeded what came in, the opposite of prior months. As best we can tell, this represents a significant effort to “catch up”, and process claims that had been in limbo. The last several months indicate a relative balance, and we should be able to see the tax filings for Liberty’s 2018 fiscal year very soon.
Righting the Ship?
There’s a long list of things that could be done to improve operations, but that’s not for this post. Liberty has made staffing changes, and worked out a lot of the bugs that appear to be the result of their software migration.
Recent newsletters appear to be indicating a return to “normal”, but with that return is a significant reduction in membership. As I’ve talked about before, 2017 was a year of incredible growth for Liberty–perhaps far to much too fast for them to manage.
Using average sharing amounts calculated through 2017, accounting for rate changes that occurred last year, and using a combination of amounts submitted for sharing and expenses actually shared, I’m estimating that membership peaked near the end of 2018 at around 110,000 households, and has fallen to approximately 82,000 households as of the end of 2019. That’s about a four percent decline in membership compared to the end of 2017, and net of about 25% of members leaving during 2019. That’s significant, and certainly takes growth away as an excuse for any shortcomings in the near future.
My next post on this topic will likely be a little bit dense and arcane, dealing with what Liberty needs to do to prevent these kinds of issues in the future. It’ll be addressed to Liberty, requesting specific process improvements, member education efforts, and greater transparency.