University vaccine contracts ballooning
Arizona’s deal with ASU has grown to $90 million
What began as a state contract with Arizona State University for $12.7 million has grown to $90.8 million and is expected to grow by millions more as the university plays an increasingly large role in the COVID-19 pandemic response.
The Arizona Department of Health Services’ COVID-19 contracts with two state universities set a spending cap of more than $100 million for the state to reimburse the schools for operating vaccine and testing sites. The state has a COVID-19 contract with the University of Arizona worth $20 million, records show.
ASU had spent and been paid back less than one-third of what the contract allows — $23.6 million of the allowable $90.8 million, as of April 8 — ADHS spokeswoman Holly Poynter wrote in an email. The contract is set to
expire July 6.
That contract is expected to grow by an additional $44 million or so for added vaccine site costs, according to ASU, to a total of $135 million.
The contract terms indicate the state-operated vaccine sites will be closing June 30 or sooner. State health officials say the plan is to operate the state sites through the end of June, but that could change depending on the status of the virus, how many people still need vaccines and how accessible vaccines are at places like doctors’ offices and pharmacies.
The Arizona Department of Health Services first contracted with ASU for COVID-19 saliva-based diagnostic testing during last summer’s severe surge of COVID-19 illness. To date, the $90.8 million contract includes maximum reimbursements of about $56.5 million for saliva-testing costs and $34.3 million for vaccine site costs.
The contract has since been amended about a dozen times as ASU expanded its testing capacity and took on more work in helping with Arizona’s COVID-19 response. In the past few months, ASU took on management and operation responsibilities at state vaccine sites including State Farm Stadium in Glendale, ASU’s Phoenix Municipal Stadium, and most recently, state sites in Yuma and Mesa.
ASU will remain involved when Phoenix Municipal Stadium moves indoors to ASU’s Desert Financial Arena on Monday, and when State Farm Stadium shifts its operations indoors to Gila River Arena in Glendale at the end of April.
The state health department had a contract with ASU for up to $15 million for its on-site work at State Farm and Phoenix Municipal stadiums, and eligible expenses were increased by about $10 million at the two sites in early March for a total of about $25 million.
In addition, a late March amendment to the contract added responsibilities at the Yuma Civic Center and southeast Mesa sites, for which ASU can expense the state for up to $4 million at Yuma and $5 million at Mesa.
The state health department said ASU as of Tuesday had billed and been paid for about $2.5 million of work at State Farm Stadium and $1 million at Phoenix Municipal Stadium. Payments lag by about 60 days, an ASU spokesperson said.
The state’s contract with the University of Arizona for the Tucson vaccine site is for a maximum of $20 million. The contract, signed March 24 but effective from Feb. 18, allows up to about $167,000 of expenses daily for an initial duration of 120 days for UA’s management of the state vaccine site. The contract can be amended and the price bumped up in the future if needed, ADHS confirmed.
The state did not immediately have an estimate of how much UA has spent and been reimbursed for so far, but pointed to the maximum daily spending of about $167,000, though UA officials say they do not expect to exceed that amount.
“We anticipate the costs will average about $72,000 per day based on the current schedule,” UA spokeswoman Pam Scott wrote in an email.
The universities are responsible for tracking their expenses for the vaccine sites and submitting the costs to ADHS for approval and reimbursement.
The state health department said it chose to partner with and pay the universities, rather than private companies in the medical or logistics realm, for several reasons.
“We partner with Arizona’s public research universities on multiple projects, and contracting with both can be done quickly and efficiently through an interagency service agreement as the universities are also public entities,” ADHS spokesman Steve Elliott wrote in an email.
ASU had demonstrated its ability by running large drive-thru COVID-19 test sites, Elliott said, and UA was already operating a successful drive-thru vaccine site before partnering with the state.
“Transitioning to managing operations at mass-vaccination sites was a natural step and one that has benefited Arizonans,” Elliott wrote, adding that State Farm Stadium as of Wednesday had administered 700,000 doses and Phoenix Municipal Stadium nearly 200,000 doses under ASU’s oversight of staffing and operations.
While the state health department gets most of the credit for the mass-vaccination sites, ASU and UA coordinate much of the day-to-day heavy lifting and operations.
The universities operate and manage the vaccine sites under the direction of the state and medical direction of health department director Dr. Cara Christ, per the contracts.
The universities help staff the sites with volunteers and paid staff and are responsible for the logistics.
ASU and UA are required to use the state’s vaccine management system for registration and scheduling.
ASU spokesperson Jay Thorne said in an email the “university’s responsibilities include traffic flow, site design and layout, staffing and volunteer recruitment training and management, coordination with the pharmacy on vaccine management, coordination with public safety, information technologies, etc.”
ASU coordinates the paid staff and volunteers, and said that as volunteer sign-ups have slowed, some additional paid staff have been added to critical positions, including vaccination and observation.
Big categories of spending at the four sites ASU operates are for infrastructure such as tents, generators, lighting and restrooms, staff and operations support such as communications equipment and carts for accessibility, Thorne said.
ASU is contributing more to the COVID-19 response than tests and vaccines, Thorne said.
“ASU has converted a major aspect of research space and capability as well as administrative and logistical expertise to help the community in a time of need,” Thorne wrote. “Those contributions are very difficult to estimate either in absolute dollars or in people vs. materials . ... Our responsibility is to be a resource for the communities we serve and that’s exactly what the university’s faculty, staff — and students — are doing.”
The UA contract for the Tucson vaccine site says the university must coordinate all of the necessary staffing, including for the pharmacy, volunteers, vaccine administration, medical observation, registration, traffic, check-in, emergency medical services and safety. They also have to manage storage, preparation and administration of the vaccine as well as all necessary supplies.
Each month, the schools can submit their expenses for reimbursement at the maximum values outlined in the contracts.
Scott, the UA spokesperson, said the university’s responsibilities at the Tucson vaccine site match its “university core values” of integrity, compassion, exploration, adaptation, inclusion and determination. The university is neither profiting nor losing money from the operations, she said.
“As COVID-19 has been a great challenge for us all we are excited to be able to provide this service to the state and the community,” she wrote in an email.
“We are working diligently with the state to adapt to provide the best care possible and adapt the ever changing circumstances (and) we expect this contract to be expense neutral.”
ASU said the same.
“The goal is simply to break even. Federal and state funding are intended to cover all costs, the university has no financial incentive or reward,” Thorne wrote. ASU has no costs at the vaccine sites that are not covered by the contract.
Scott said the UA is responsible for registration, staffing, pharmacy services, vaccination services and supplies at the site, which has the capacity to operate 24/7 as the supply of vaccine doses allows. The university’s expenses include personnel, contractors, consultants and supplies, she said.
The large-scale site at the UA requires about 250 people to 300 people to operate it, and about 60% of the labor is coming from volunteers, Scott said. Paid staff are used for any positions that can’t be filled with volunteers, including licensed medical and emergency personnel, she said.
UA officials estimate the cost of paid staff since the state took over as the site operator on Feb. 18 at about $555,000, “but this will continue to be a variable cost to manage,” Scott wrote.
The state sites have costs beyond the university contracts, though the information provided by the state health department was unclear about the total overall costs of operating the sites.
In addition to operation and management contracts with ASU and UA, ADHS directly contracts with other groups for emergency medical services, public safety services and pharmacy services for some sites, according to Elliott.
The funds the state health department is paying are mostly coming from federal COVID-19 relief dollars and the Federal Emergency Management Agency’s Public Assistance Program, according to ADHS.
“Our No. 1 priority is getting Arizonans vaccinated quickly. Arizona’s mass-vaccination sites have been a huge success towards accomplishing this goal,” Elliott wrote.
About 28% of vaccine doses administered statewide have been at state sites, according to state vaccine data as of Friday. Other doses are being administered at county-run sites and places like pharmacies and health clinics.