San Francisco Chronicle - (Sunday)
Critics hit Newsom’s reliance on tech
Pandemic decisions lean to using private over public sector
SACRAMENTO — Gov. Gavin Newsom has embraced Silicon Valley tech companies and health care industry titans in response to the COVID19 pandemic like no other governor in America — routinely outsourcing lifeordeath public health duties to his allies in the private sector.
At least 30 tech and health care companies have received lucrative, nobid government contracts, or helped fund and carry out critical public health activities during the state’s battle against the coronavirus, a KHN analysis has found. The vast majority are Newsom supporters and donors who have contributed more than $113 million to his political campaigns and charitable causes, or to fund his policy initiatives, since his first run for statewide office in 2010.
For instance, the San Franciscobased
software company Salesforce — whose CEO, Marc Benioff, is a repeat donor and is so tight with the governor that Newsom named him the godfather of his first child — helped create My Turn, California’s centralized vaccine clearinghouse, which has been unpopular among Californians seeking shots and has so far cost the state $93 million.
Verily Life Sciences, a sister company of Google, another deeppocketed Newsom donor, received a nobid contract in March 2020 to expand COVID testing — a $72 million venture that the state later retreated on. And after Newsom handed another nobid testing contract — now valued at $600 million — to OptumServe, its parent company, national insurance giant UnitedHealth Group dropped $100,000 into a campaign account he can tap to fight the recall effort against him.
Newsom’s unprecedented reliance on private companies — including health and technology startups — has come at the expense of California’s overtaxed and underfunded public health system. Current and former public health officials say Newsom has entrusted the essential work of government to privatesector health and tech allies, hurting the ability of the state and local health departments to respond to the coronavirus pandemic and prepare for future threats.
“This outsourcing is weakening us. The lack of investment in our public health system is weakening us,” said Flojaune Cofer, a former state Department of Public Health epidemiologist and senior director of policy for Public Health Advocates, which has lobbied unsuccessfully for years for more state public health dollars.
“These are companies that are profitdriven, with shareholders. They’re not accountable to the public,” Cofer said. “We can’t rely on them helicoptering in. What if next time it’s not in the interest of the business or it’s not profitable?”
Kathleen Kelly Janus, Newsom’s senior adviser on social innovation, said the governor is “very proud of our innovative publicprivate partnerships,” which have provided “critical support for Californians in need during this pandemic.”
State Health and Human Services Secretary Dr. Mark Ghaly echoed the praise, saying privatesector companies have filled “important” roles during an unprecedented public health crisis.
The state’s contract with OptumServe has helped dramatically lower COVID test turnaround times after a troubled start. Another subsidiary of UnitedHealth Group, OptumInsight, received $41 million to help California rescue its outdated infectious disease reporting and monitoring system last year after it crashed.
“Not only are we much better equipped on all of these things than we were at the beginning, but we are also seeing some success,” Ghaly said, “whether it’s on the vaccination front, which has really picked up and put us in a place of success, or just being able to do testing at a broad scale. So, I feel like we’re in a reasonable position to continue to deal with COVID.”
The federal government finances most public health activities in California and significantly boosted funding during the pandemic, but local health departments also rely on state and local money to keep their communities safe.
In his first year as governor, the year before the pandemic, Newsom denied a budget request from California’s 61 local public health departments to provide $50 million in state money per year to help rebuild core public health infrastructure — which had been decimated by decades of budget cuts — despite warnings from his own public health agency that the state wasn’t prepared for what was coming.
After the pandemic struck, Newsom and state lawmakers turned away another budget request to support the local health departments driving California’s pandemic response, this time for $150 million in additional annual infrastructure funding. Facing deficits at the time, the state couldn’t afford it, Newsom said, and federal help was on the way.
Yet COVID cases continued to mount, and resources dwindled. Barebones staffing meant that some local health departments had to abandon fundamental public health functions, such as contact tracing, communicable disease testing and enforcement of public health orders.
“As the pandemic rages on and without additional resources, some pandemic activities previously funded with federal Cares Act resources simply cannot be sustained,” a coalition of public health officials warned in a late December letter to Newsom and legislative leaders.
Newsom has long promoted tech and private companies as a way to improve government, and has leaned on the private sector throughout his political career, dating to his time as San Francisco mayor from 2004 to 2011, when he called on corporations to contribute to his homelessness initiatives.
And since becoming governor in January 2019, he has regularly held private meetings with health and tech executives, his calendars show, including Facebook CEO Mark Zuckerberg, Google CEO Sundar Pichai and Apple CEO Tim Cook.
“We’re right next door to Silicon Valley, of course, so technology is our friend,” Newsom wrote in his 2013 book, “Citizenville,” arguing that “government needs to adapt to this new technological age.”
With California’s core public health infrastructure already gutted, Newsom funneled taxpayer money to tech and health companies during the pandemic or allowed them to help design and fund certain public health activities.
Other industries have jumped into COVID response, including telecommunications and entertainment, but not to the degree of the health and technology sectors.
“It’s not the ideal situation,” said Daniel Zingale, who has steered consequential health policy decisions under three California governors, including Newsom. “What is best for Google is not necessarily best for the people of California.”
Among the corporate titans that have received government contracts to conduct core public health functions is Google’s sister company Verily.
Google and its executives have given more than $10 million to Newsom’s gubernatorial campaigns and special causes since 2010, according to state records. It has infiltrated the state’s pandemic response: The company, along with Apple, helped build a smartphone alert system called CA Notify to assist state and local health officials with contact tracing, a venture Newsom hailed as an innovative, “datadriven” approach to reducing community spread. Google, Apple and Facebook are sharing tracking data with the state to help chart the spread of COVID. Google — as well as Facebook, Snapchat, TikTok, Twitter and other platforms — also contributed millions of dollars in free advertising to California, in Newsom’s name, for public health messaging.
Other companies that have received lucrative contracts to help carry out the state’s COVID plans include health insurance company Blue Shield of California, which received a $15 million nobid contract to oversee vaccine allocation and distribution, and the private consulting firm McKinsey & Co., which has received $48 million in government contracts to boost vaccinations and testing and work on genomic sequencing to help track and monitor COVID variants. Together, they have given Newsom more than $20 million in campaign and charitable donations since 2010.
Private companies have also helped finance government programs and core public health functions during the pandemic — at times bypassing local public health departments — under the guise of making charitable or governmental contributions, known as “behested paymentss,” in Newsom’s name. They have helped fund vaccination clinics, hosted public service announcements on their platforms, and paid for hotel rooms to safely shelter and quarantine homeless people. Facebook and the Chan Zuckerberg Initiative, the philanthropic organization started by Facebook founder Zuckerberg and his wife, Priscilla Chan, have been among the most generous, and have given $36.5 million to Newsom, either directly or to causes and policy initiatives on his behalf. Much of that money was spent on pandemic response efforts championed by Newsom, such as hotel rooms and child care for frontline health care workers; computers and internet access for kids learning at home; and social services for incarcerated people leaving prison because of COVID outbreaks.
Facebook said it is also partnering with the state to deploy popup vaccination clinics in hardhit areas like the Central Valley, Inland Empire and South Los Angeles.
In prepared statements, Google and Facebook said they threw themselves into the pandemic response because they wanted to help struggling workers and businesses in their home state, and to respond to the needs of vulnerable communities.
Angela Hart writes for California Healthline, is a service of the California Health Care Foundation produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.