State doesn’t renew COVID-19 testing pacts with Verily
Public Health officials say decision based on streamlining resources
California will not renew its coronavirus testing partnership with the life sciences company Verily, marking the end of a highly-touted effort that sought to use Silicon Valley expertise to battle the pandemic, but garnered widespread criticism.
State officials have consolidated Verily’s remaining testing sites under another vendor and declined to renew two contracts, one that expired in mid-January and one that expires in a few days, according to the California Department of Public Health.
Combined, the contracts with the company, a subsidiary of Google parent company Alphabet, cost the state $62.5 million and covered more than 100 fixed and mobile testing sites across 30 counties.
Verily’s testing program has been in the national spotlight since last March when former President Donald Trump erroneously claimed Google was building a website to help Americans find coronavirus testing sites. That same week, following Verily’s establishment of testing centers in Santa Clara and San Mateo counties, Gov. Gavin Newsom billed the company’s pilot programs as a hopeful “national model.”
Newsom later said the sites would capture rural and urban Californians disproportionately
impacted by COVID-19 and “make sure we’re truly testing California broadly defined, not just parts of California.”
“We’re democratizing testing,” Newsom said.
But the partnership also has faced criticism from public health experts from the start and left some elected officials in California frustrated by what they describe as a misguided approach to testing vulnerable communities.
Dr. Jorge Caballero, a Stanford physician and co-founder of the public testing database Coders against COVID-19, began warning CDPH contacts in April that poorer areas remained underserved by state testing sites. As he fielded requests in Spanish for help with the platform, it seemed that Verily wasn’t “nimble enough to address the demand and the evolution of the demand,” Caballero said.
“This whole strategy was just sort of backward from the get-go,” Caballero said. “Why were we spending this money if it wasn’t solving problems and it was creating additional problems?”
In response to questions about why the contracts were not renewed, the CDPH said another company, Optum Serve, won a competitive bid “to reduce costs and streamline testing” through April of this year.
Verily spokesperson Rachel Ford Hutman said the company was told “that CDPH wanted to streamline resources with one vendor.”
Neither the state nor Verily responded to followup questions clarifying whether Verily was among the competitive bidders. The company will continue to provide testing in California through a separate deal with drugstore chain Rite Aid.
“We are proud of the work we did with the state, so quickly, to help expand testing capabilities locally,” Ford Hutman said. “We retain a great relationship with the state and have been putting in a huge, unpaid effort to ensure there’s a smooth transition of the sites Verily has supported to another vendor to ensure continuity and a good handoff.”
Because Verily did not conduct its own testing or processing, the company passed costs from subcontractors, like commercial labs, to the state. Some critics believe that led to higher prices, with the average cost per Verily test ranging from $83 to $159 in 2020, according to CDPH. Newsom’s office has since named a cost-per-test goal of $31 with diagnostics company Perkin Elmer.
In September, San Mateo County entered a direct contract with Verily for a mobile testing site, Deputy County Manager Justin Mates said. Each COVID-19 test cost about $128, a price tag that contributed to the county’s decision not to renew the contract in January.
“They were not an endto-end solution and they were never positioned to be an end-to-end solution,” Mates said. “It’s not a knock on them, to the extent that they had a different model.”
When asked directly how Verily’s cost-per-test and insurance billing influenced the state’s decision, CDPH said it chose OptumServe for “many reasons, one of which was reducing costs and responsibilities for counties that previously used county personnel and resources in order to operationalize Verily sites.”
The department said it’s working to bill insurers for Verily tests, though it would not say how much it expects to be reimbursed. Verily, meanwhile, claims the state never activated an insurance billing feature it created.
Despite Newsom’s promise of an equitable testing model, Verily also has faced criticisms over the accessibility of its testing, including complaints that patients had to use a Google account with the platform and schedule appointments online, which proved difficult for those without smartphones or who spoke languages other than English and Spanish.
Alameda County officials, including Oakland Mayor Libby Schaaf and state Assembly member Rob Bonta, voiced those concerns in a June letter to Health and Human Services Director Mark Ghaly, asking the state to add more sign-up options for its Verily sites and stop using the platform for walk-up testing. By October, Oakland and San Francisco had put their relationships with the company on hold.
“It bears repeating, we were asked by the state of California to help with COVID-19 screening and testing efforts in March — when none were available anywhere. In a matter of days, we stood up testing sites — initially at risk — with the combined efforts of over 1,000 company volunteers from Verily and Alphabet,” Ford Hutman said, adding that Verily worked with counties directly to solve problems at different sites.
Local officials said that the state didn’t explain why Verily’s contracts would not be renewed. But the decision didn’t surprise Santa Clara County Executive Jeff Smith.
“There’s been this approach of, ‘Let’s contract everything out,’ which ends up with bad results because, you know, they’ve never done COVID testing or any other type of testing,” Smith said. “I remember pretty distinctly feeling that the approach that was being taken by the state was destined to fail.”