Blue Shield to call shots under California vaccine contract

Nurse Helen Cordova, right, receives the Pfizer-BioNTech COVID-19 vaccine

Feb. 15, 2021 6:31 PM PT

SACRAMENTO — Blue Shield of California will create an algorithm to determine where to allocate COVID-19 vaccines statewide with the goal of being able to administer 3 million shots a week by March 1, according to a contract made public Monday that grants the insurance giant far-reaching powers in overseeing the state’s distribution of doses.

The company will attempt to drastically scale up the number of daily doses, but that goal will largely depend on the supply sent to the state. California received a little more than 1 million vaccine doses in the last week from the federal government.

Blue Shield, which wields considerable influence in state politics, will immediately work to centralize the state’s COVID-19 vaccination program after a sluggish start due to a lack of available doses, complex regulations dictating which Californians should be prioritized, and data reporting issues.

The contract says Blue Shield’s algorithm will prioritize vaccine distribution with “a focus on equity” throughout the state and will be updated based on vaccine availability and COVID-19 rates. Few other details about the algorithm were available Monday.

Under the contract, Blue Shield also has wide latitude to select which healthcare providers and counties will continue to receive and administer doses in California as part of a vaccine network.

“We are changing a process midstream and my hope is that this becomes easier and not more bureaucratic and difficult for clinics in my community to serve their client populations,” L.A. County Supervisor Holly Mitchell said in an interview Monday. “This is not the solution L.A. County needs. L.A. County needs more vaccine and the flexibility to distribute it more equitably.”

The state’s decision to put Blue Shield at the helm removes key decision-making on vaccine administration from the purview of counties just as California’s vaccination efforts have begun to take off. More than 6 million doses have been administered in the state, with California now averaging a million vaccines a week, Gov. Gavin Newsom said in a tweet Monday.

Kaiser Permanente, which provides healthcare services for more than 9 million Californians, is expected to sign a separate contract with the state to run a vaccination program for its members while overseeing two or more mass vaccination sites and helping to vaccinate “hard-to-reach and disproportionally impacted populations,” according to a letter of intent released Jan. 29.

Both companies have agreed that they will run the programs at or near cost and “will not profit,” according to the letters of intent. Blue Shield’s contract stipulates that the company cannot bill the state for more than $15 million during the contract term for out-of-pocket costs.

Newsom, who faced criticism about the state’s slow rollout, said the arrangement with Blue Shield and Kaiser will ensure that vaccines are administered more quickly and equitably while improving the reliability of data that has thus far been problematic. But some county officials say the process has been slowed by a shortage of vaccines and have noted that state data have failed to accurately show their progress in administering shots.

“This is a supply problem, not a logistics problem,” said Buddy Mendes, a member of the Fresno County Board of Supervisors and a vice chairman of the Urban Counties of California. “Give us the doses, that’s all we are asking. We will get them in people’s arms.”

The Urban Counties of California wrote to Newsom on Feb. 3 to “raise serious concerns” about the agreement with Blue Shield, questioning why the state would bring in the company so late in the process after counties had spent significant amounts of money to ramp up vaccine distribution. The agreement with Blue Shield, the group wrote, could create confusion in the supply chain and disrupt the systems that local governments have created.

“Our chief concern is to ensure that we have sufficient vaccines to cover appointments at our large-scale vaccination sites,” the letter said.

Ventura County officials asked the state for the option to be excluded from the Blue Shield agreement, saying its own vaccination program has been limited only by a lack of available doses. The officials said Ventura County can scale up its ability to administer 8,000 doses a day if provided a sufficient amount of vaccine. Allowing Blue Shield to determine how many doses a county receives puts those efforts in limbo, the county wrote. The contract released Monday did not allow for counties to opt out.

“All of this capability and capacity would come to a halt if vaccine supplies are diverted or reduced,” wrote Linda Parks, chair of the Board of Supervisors, and Michael Powers, the executive officer for the county.

The contract will create a vaccine network in three “geographical waves,” although the areas and timelines for that plan were not included in the contract. Sources provided The Times with a tentative timeline confirmed by the California Department of Public Health in which Central Valley counties such as Fresno, Kern, San Joaquin and Stanislaus are in the first wave that will begin Feb. 21.

Los Angeles, Orange, San Bernardino, San Diego and Ventura are among the counties in the second wave that begins March 7. A week later, San Francisco, Contra Costa and Alameda counties are among those that would begin to participate in the vaccine provider network.

Newsom authorized the deal with Blue Shield and Kaiser under an emergency contract that does not require legislative approval. The governor announced the deal late last month, but the contract was not signed until Friday. The terms of the contract run until Dec. 31.

The announcement that Blue Shield would take another key role in the state’s pandemic response prompted a new round of criticism over the close connections between the company and Newsom.

The Oakland-based company, which serves some 4 million Californians, was tapped to improve coronavirus testing efforts in April after the state’s disastrous start, which included a shortage of testing supplies, long wait times for results and data glitches.

The company’s chief executive, Paul Markovich, served as co-chair of the governor’s testing task force, while some of the company’s employees also worked on the effort.

Blue Shield is a prominent player in California political campaigns, having spent more than $1 million in support of Newsom’s campaign for governor in 2018 and almost $1.3 million on lobbying state government in the most recent legislative session. In January 2020, Blue Shield gave $20 million to support Newsom’s program to combat homelessness.

Newsom said Feb. 3 that linking Blue Shield’s support and political influence to the company landing the vaccination contract is “nonsense.”

“Everybody came together looking at what’s working, what’s not working, and we identified two partners in particular, two nonprofits, Kaiser and Blue Shield,” Newsom said. “... They have the kind of scale, they have the capacity, they have the allocation-distribution mindset we were looking for.”

Times Sacramento bureau chief John Myers contributed to this report.