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September 29, 2020

State makes deal to boost Covid-19 testing capacity

SACRAMENTO—A contract with a San Jose diagnostics company will allow the state to increase its Covid-19 testing capacity up to an additional 150,000, Gov. Gavin Newsom announced Aug. 24.

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Under the deal with Perkin Elmer, the state will be able to process up to an additional 150,000 Covid-19 diagnostic tests a day, with a turnaround time of 24-48 hours.

Two days after Newsom announced the contract, he signed an executive order to help the state build out its own laboratory capabilities.

That order will expedite efforts by the Department of General Services and the Department of Public Health to establish and operate up to three sites for use as laboratories to increase the state’s Covid-19 testing capacity.

State officials hope to begin processing tens of thousands of additional tests by Nov.1, and to be running at full capacity by ­no later than March 1, 2021.

It is not yet clear how the plans will affect Santa Cruz County, although it increase its overall testing capacity, said County Health Department Spokeswoman Corinne Hyland.

“While we are excited about this new State resource, we are not sure how it will be offered in Santa Cruz County yet,” she said. “This, coupled with the requirement of health insurers to cover testing, will decrease barriers to widespread testing.”

The PerkinElmer labs will utilize polymerase chain reaction diagnostic testing, which is considered to be the gold standard in testing.

The process is expected to drive down the cost of tests for everyone, and ease the testing logjam that has meant some people waiting weeks for their test results.

 The per-test cost would be $30.78 at 150,000 tests per day. 

By comparison, Medicare and Medicaid reimburse at roughly $100 per test, while the average cost of a Covid-19 test ranges from $150 – $200 per test. 

The move was meant to expand California’s ability to track and prevent Covid-19 infections across the state, and allow the state to increase testing in communities at high risk for contracting Covid-19, such as essential workers, those in congregate settings and communities of color.

“California is using its market power to combat global supply chain challenges and protect Californians in the fight against Covid-19,”  Newsom stated in a press release. “Supply chains across the country have slowed as demand for Covid-19 tests has increased, and flu season will only exacerbate the problem. So we are building our own laboratory capabilities right here on California soil with a stable supply chain to fight the disease, lower the prices of testing for everyone and protect Californians most at risk from Covid-19.”

To support this contract at the lowest cost to taxpayers, the state will enter into a contract for third-party billing services to recoup costs from health insurance companies or other payers.

“Californians need testing that is accessible, equitable, cost-effective and timely,” said Senate Budget Chair Senator Holly Mitchell. “This deal meets all those metrics.”

Assemblymember Lorena Gonzalez, who chairs the Latino Legislative Caucus, said the increased testing capacity will be a boon for the Latinx community, which makes up a large percentage of the majority of workers in the agricultural fields, garment and our meatpacking industries. 

“Expanding testing for all Californians means that our essential workers will have more access to information to protect themselves, their families and their communities,” she said.


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