California authorized paying OptumServe up to $221 million. But the company has helped with only 1% of the state’s vaccinations since January.
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California agreed to pay OptumServe up to $221 million during the pandemic to coordinate and operate dozens of vaccination sites. But the health care company’s work in at least a dozen counties has been plagued by miscommunication and staffing shortages.
Officials from at least 12 counties complained to the state Department of Public Health about delays and other problems with OptumServe, saying that the problems hampered their ability to get shots into arms, according to state documents obtained through a Public Records Act request.
The company has fallen far short of the up to 100,000 daily vaccine doses it told the state in its contracts that it could deliver. It has helped administer about 370,000 doses since January — just 1.1% of California’s nearly 34 million during that span. At several vaccine sites, OptumServe failed to deliver the minimum 420 doses it pledged to distribute each day.
At least three counties — Lassen, Madera and Tulare — stopped working with OptumServe, are taking back doses and turning instead to community groups for running their vaccination sites. The company still has 30 sites operating in 23 counties across California.
The Brown Institute for Media Innovation’s Documenting COVID-19 project in collaboration with CalMatters reviewed thousands of pages of internal emails about OptumServe and conducted interviews with county health departments.
Over the past year, the state awarded OptumServe and its subsidiary, Logistics Health Inc., three no-bid contracts totaling up to $1 billion to run hundreds of California’s testing and vaccine sites.
Included is up to $221 million authorized through September 2021 to work on the vaccination rollout. So far, OptumServe has billed the state $4.8 million for its vaccine contract, according to figures provided by the California Department of Public Health. For its two contracts for running hundreds of California testing sites, the state also agreed to pay OptumServe up to $838 million, and has already paid $282.5 million.
OptumServe is a Minnesota-based company hired by the federal government to manage health care. Its $200-billion parent company, UnitedHealth Group, is the nation’s second-largest health care company.
UnitedHealth contributed $131,000 to Gov. Gavin Newsom’s 2022 re-election campaign and his standing ballot measure committee during the pandemic in December, raising questions from critics, including Bob Stern, principal co-author of the state’s Political Reform Act, about the use of no-bid contracts with politically connected contractors.
In written responses to questions, OptumServe and the California Department of Public Health acknowledged missteps and attributed some early miscommunication and staffing shortages to the unprecedented nature of the pandemic and the unique challenges of delivering vaccines to all corners of California.
The problems in more than a dozen counties revealed in the documents have not been previously reported. But in February, staffing and communication problems were flagged in Lassen County, which cut ties to OptumServe’s clinic in Susanville. In addition, thousands of vaccination appointments had to be cancelled at a Sonoma County OptumServe clinic in late January due to a flaw in the company’s website.
Tulare County health officials told the state that OptumServe had a “lack of knowledge” about the vaccine rollout, citing unstaffed and repeatedly delayed state-contracted vaccine sites. The county recently stopped working with OptumServe, saying that its relationship was so fractured that it was “beyond an ultimatum,” according to meeting notes dated April 20 written by the California Department of Public Health and obtained through a public records request.
Tulare County Board of Supervisors Chair Amy Shuklian, who represents Visalia and surrounding farming communities, called OptumServe’s work “disappointing” and said she wonders whether the company’s problems scared off people with limited time and transportation to get to a vaccine site.
“We need to get some of our money back,” she said, referring to the state’s ongoing contracts with OptumServe.
Riverside County Public Health officials told the state that OptumServe staffers called in sick week after week, and were never reprimanded, the meeting notes say. Last week, the county announced a new Optum clinic has been put on hold with no timetable for opening. An Optum spokesperson said the delay is to ensure the clinic is thoroughly cleaned and construction debris is cleared.
Riverside County spokesperson Brooke Federico said the county “has been satisfied with the partnership with OptumServe” while acknowledging that any new partnerships have issues to work through.
Officials from several other counties also said in interviews that OptumServe’s early troubles were somewhat expected. Contra Costa Health Services assigned a member of its vaccine team to support OptumServe and said issues were to be anticipated when “building a new service in a short time.”
“Despite the expected challenges that come up with standing up a new supply system, no doses were missed and only a very small number of appointments were rescheduled,” Contra Costa Health Services spokesperson Brittany Paris said in a statement.
The documents obtained from the public records request detail problems related to OptumServe’s vaccination sites, not its testing sites, which make up the bulk of the company’s $1 billion contract with the state.
The contracts show OptumServe proposed a quick vaccine rollout across California in January, with as many as 1,260 doses a day at some of its bigger regional sites. Almost 80% of the roughly 370,000 doses Optum has administered to date were during March and April. In some counties with multiple OptumServe sites, the company accounts for 10 to 20% of the total doses administered to residents, far less than community organizations or county health departments that had similar vaccine allocations.
OptumServe, state say problems have been fixed
The California Department of Public Health declined to grant interview requests and instead said in a statement that it enlisted OptumServe and hundreds of other vaccination providers “at a time when we did not have enough capacity to deliver the doses.”
“The state and our partners in the vaccination rollout have learned much along the way, and we strive continuously to improve communication and processes,” the statement says. “Where issues have been raised, we have worked to address them quickly.”
OptumServe said it has responded to issues raised by county health departments. While it does not inform counties of measures taken against tardy or absent staffers, a statement from the company said, personnel issues are “managed accordingly” and offending staffers are “held accountable.”
“For more than a year, Optum has been honored to support California efforts to address the COVID-19 pandemic by mobilizing quickly to provide urgently needed COVID testing, vaccinations and health IT services,” OptumServe said in a statement. “We continually evaluate our operations and make necessary adjustments to ensure California residents receive the high-quality service they expect. We continue to closely collaborate with the state and counties on this important work.”
Blue Shield of California, the state’s third-party administrator of vaccine and testing, said that OptumServe’s state contract pre-dates its involvement and referred questions about on-the-ground issues to the state and OptumServe. But internal emails and memos show that Blue Shield made recommendations to the state about dose allocations to OptumServe sites.
Community groups that are now taking over some of OptumServe’s vaccine work say the state’s plan was flawed from the start, and reflects a misplaced one-size-fits-all approach to the rollout.
“You can’t hire a business to do this work on the turn of a dime and expect them to be effective,” said Arturo Rodriguez, organizing director of the Central Valley Empowerment Alliance, a nonprofit that Tulare County has asked to help coordinate vaccine distribution. He added that consistency and quality of health care services are built over time, with trusted, reputable contractors and community organizations.
Collaboration with community groups has been a key in overcoming barriers to vaccine access, particularly when tech troubles emerge, according to Dr. Courtney Lyles, an associate professor in the University of California, San Francisco’s Division of General Internal Medicine.
“There’s power in combining big tech’s flexibility and capability with on-the-ground knowledge of community-trusted partners,” she said. “That’s the secret sauce to be able to do online things well.”
Problems cited in Central Valley
In January, Optum distributed about 5,000 doses when vaccine supply was still scarce. By late February, Newsom announced 11 new OptumServe vaccination clinics focusing on the Central Valley. Despite concerns about early registration snafus and cancelled appointments, the sites opened in early March.
In contracting documents and pricing models, OptumServe told the state it would turn existing testing sites into vaccine sites in just 11 days from when the contract started. It would staff some of these sites eight hours a day, five days a week. At mass vaccine sites, OptumServe pledged it could dole out more than 25,000 doses per month — at a cost of more than $926,000 per site.
Two key assumptions were baked in: One was the availability of vaccines from the state; the other was how well the state’s MyTurn scheduling system worked.
Counties say lingering issues with both OptumServe and MyTurn have hampered their efforts to get people vaccinated. Californians across the state ended up largely bypassing the state’s $50 million MyTurn site, which has been problematic for residents, health providers and local health departments.
In many places, the projected vaccine targets were never realized.
Tim Lutz, director of Tulare County’s Health and Human Services Agency, said in an interview that each OptumServe site “presented its own challenges,” with some lacking a staffer to handle daily vaccine deliveries and others shutting down early due to overbooking. Some of the OptumServe vaccine events in the hardest-hit agricultural regions in Tulare — such as a farmworker-only event in Earlimart — were delayed for hours or cancelled entirely because of absent workers.
In late April, meeting notes from a call between Tulare County officials and the California Department of Public Health show Tulare provided a page-and-a-half summary of complaints about OptumServe. Two senior state officials working on the OptumServe contract — Nick Picinich and Ellen Badley — were “very aware of how much hand holding” was needed with the state contractor and “acknowledged awareness of how much the county has done and length of time they have gone without responses,” according to the state’s meeting notes recap.
In response, OptumServe pledged to correct on-the-ground issues with its staff. “Optum will be available at the convenience of the group,” wrote LaShonda Cobb, Optum’s director of COVID services.
But weeks later, Tulare County proposed a transition plan to stop using OptumServe and instead rely on community providers and organizations that the county had found to be more consistent. OptumServe still has a vaccination site in Tulare County, but it is no longer working with the county, and county officials are in the process of taking their doses to redistribute to other partners.
Tulare County estimates that OptumServe has administered slightly more than 37,000 vaccine doses, with about 13,800 unused doses of Pfizer and Johnson & Johnson vaccines still sitting in storage at the health department. In comparison, the county has administered roughly 274,000 vaccine doses; OptumServe represents 13.5% of its total.
In Kern County, where Newsom initially announced the opening of the new OptumServe sites initiative, Brynn Carrigan, director of the county’s Public Health Services Department, said complications with those sites were, in part, due to problems with the state’s MyTurn vaccine scheduling website. The site delayed opening registration for those locations, making it difficult for residents to book appointments.
Two of the sites were in farmworker communities. Carrigan said at times they did not fully distribute the 420 doses available each day because MyTurn appointments posted on the website too late. The OptumServe clinics still “brought about additional vaccine allotment to our county” when it needed it most because doses were scarce, she said.
Advocates for farmworkers, however, said mass vaccination sites aren’t the best solution for highly transient people who might lack a car.
“It’s very difficult for farmworkers to get to a hospital or a clinic or a vaccine site. It’s important to take the vaccines to where they are,” said Diana Tellefson Torres, executive director of the United Farm Workers Foundation.
Last month, Santa Cruz County wanted to increase its vaccine allotment to 420 doses a day, a goal OptumServe said it would meet back in March, according to state documents. But by the time that doses at OptumServe sites finally increased in early May, demand had already dropped off substantially, county officials said.
Madera County wanted to reach 630 vaccines a day, but capacity was low because MyTurn appointment times opened up too late to be filled, county officials said. OptumServe, which began working with the county on vaccinations in February, now operates its site “largely independent of the county,” a change that was planned from the onset, according to the public health department’s spokesperson Phylisha Chaidez.
In Monterey, the state offered to set up an Optum clinic that could initially administer 750 doses over two days. The Monterey County Health Department reached out to a grower association to help coordinate the efforts but then said hours later the clinic could only do 420 per day. The association passed on working with OptumServe.
Reliance on private businesses questioned
California’s reliance on OptumServe and other private businesses to bolster the state’s public health programs is largely a consequence of municipal and state budget cuts dating back to the 2008 recession, according to Dr. Flojaune Cofer, an epidemiologist and the senior director of policy at Public Health Advocates, a nonprofit lobbying group. Those funding levels have never been restored.
“When the interests of the private companies align with what we need, we are grateful for them stepping in and providing support,” she said. “But it’s not a long-term sustainable strategy.”
California’s Legislative Analyst’s Office recently determined that the state has a budget surplus of $38 billion. California Can’t Wait, a public health initiative, hopes to secure $200 million of that in the state’s general fund to support local health departments. Newsom’s May Revision budget, however, did not allocate funding for public health infrastructure.
“Now is a great time for us to take a step back and ask what are things we need to do to make sure we’re not in the same position in the future and that we’re ready for the next pandemic,” Cofer said.
Caitlin Antonios, a California-based freelancer who works with the Documenting COVID-19 project at Columbia University’s Brown Institute for Media Innovation, reported this story while participating in the USC Annenberg Center for Health Journalism’s 2020 Data Fellowship. Bianca Fortis, a New York-based freelancer who works with the project, is a 2020 graduate of Columbia University’s Stabile Center for Investigative Journalism.
Our health care reporting is supported by the California Health Care Foundation and Blue Shield of California Foundation.