California Governor Gavin Newsom August 26 Press Conference Transcript

Gov. Newsom: (04:37)
Good afternoon. I wanted to jump right in today. We’ll, of course, update you on the wildfires. We’ll make a presentation today on where we are as relates to our positivity rate in the state of California, where we’re at with the ICUs and hospitalizations in just a moment. But I wanted to begin upfront to announce a new partnership we’re advancing, to announce a new approach that we are pursuing in an effort to disrupt the testing market, to bring our market share into that market, to bring down costs for everybody and improve reliability and access for everybody, in terms of getting tests and getting, more importantly, test results back in a timely manner.

There’s an old saw that says if you continue to do what you’ve done, you’ll get what you’ve got. Right now, we are facing the prospects moving forward over the course of the next number of months of moving in to flu season. Time for flu season, of course, puts tremendous stress and demand for testing. People that develop flu like symptoms are going to understandably and likely request that they get tested not only for flu, but also get tested for COVID-19. In anticipation of some of the stress that will place on our testing system, in anticipation of addressing some of the existing and persistent challenges with getting timely test results, as well as providing the kind of access, the quality access that provides for a lens of equity, in terms of the testing, we’re moving now in a new direction.

Let me set the… Well, let’s give you an overview broadly of where we are in terms of what we’re currently doing in terms of tests in the state of California. We have averaged roughly 100,000 tests every day in this state. You saw a few weeks ago, it was over 132,000. We’ve been challenged by this heat wave and by these wildfires. But let’s just put that slide to test roughly 100,000 or so tests a day. The average turnaround time on the test we’ve seen, go north of 10 days, in some cases 11, 12, 13 days, a few months ago. We’re currently averaging… Current average is anywhere from five up to seven day turnaround on the test. Each and every day is a precious day in terms of the test results. Once you get past a few days, those test results lose their residence, lose their meaning and significance in terms of our capacity to mitigate your exposure, mitigate the spread of the disease, be able to do the kind of work that needs to be done in terms of the contact tracing, the quarantine, and isolation.

In essence, when you’re north of 10, 11, 12 days, the tests, dare I say, are quite useless, but they’re also quite expensive. The average cost of what we refer to as a molecular diagnostic test, these are the PCR tests that many of you are very familiar with, the average costs of those tests is $150 to $200, which is quite significant. Just consider the state of California has done just shy of 11 million tests. You could pull out your calculator, do the math on 10. 8 million tests, averaging anywhere from $150 to $200, the extraordinary cost of that diagnostic. We are now moving forward in a different direction to disrupt the market by partnering with someone who’s very familiar, certainly to me, as someone who has had four kids, the PerkinElmer test that many of you that have had a newborn baby are familiar with.

In the state of California, we’ve have a partnership with PerkinElmer doing genomic diagnostic testing over 30 years. They’re a partner that has proven to be effective, and efficient, and reliable for decades in this state. They are moving and have moved very aggressively in this space. And as a consequence of the development of the partnership that goes back years, an investigation of what is available the market today by our testing task force, a needs analysis that was put together over the course of the last number of months, we have formalized a partnership now with PerkinElmer to build out a new laboratory here in the state of California, with PerkinElmer’s capacity to provide the full supply chain in terms of the reagents and the roughly 20 different ingredients that go in to a test.

The state will be accountable for logistics and billing. We have other work that we’re responsible doing, but this provides us the ability to have much more stability and the ability to provide more reliability to people that are at risk, essential workers, to address the issue of the supply chain constraints that we think will only grow, not diminish, into the flu season, to provide, as we say on this slide, some insurance against what we lazily referred to as the Twindemic of flu and COVID season, to provide guarantees in terms of turn around time for results, and ultimately to drive down the cost for everybody. This is exactly what the federal government should be doing.

And had the federal government done this some time ago, you wouldn’t see average cost of tests at $150 to $200, costing the taxpayers, quite literally, tens of billions of dollars, costing employers billions and billions of dollars, costing the health plans billions of dollars as well. We think by advancing this partnership as only California can, with the scale of our purchasing power and the need to test more people in this state than any other state in this nation, that we will be able to use that market scalability to drive down costs across the spectrum, for employers, for plans, for our Medicaid system, Medi-Cal here in the state of California, and of course, Medicare system that currently is reimbursing over a hundred dollars per test. California is committing to a diagnostic testing partnership that will provide an additional 150,000 tests per day. So we’re averaging over 100,000 tests a day. We were doing well north of 130,000 before for the wildfires. We’ll get back up into that range very shortly. This is additive. It’s not a substitute. All the existing testing protocols that are currently in place, all the partnerships that we have advanced with our labs up and down the state and some of these more mobile testing sites, we are only looking to disrupt the costs of that system, but not the access to those tests and those diagnostics in the existing system. But we want to add on top of it. But what is significant in this partnership is we are demanding test results back within 24 hours, at the latest, 48 hours.

And we have provisions in the contract to guarantee that turnaround time. You get it within 48 hours, certainly within 24 hours, then we have the ability to make decisions in real time that will advance our efforts to reopen our schools for in-person education, reopen our businesses in a more effective and efficient manner, in a more sustainable manner. And by the way, we’ll be putting out those guidelines Friday, in terms of the new strategies we are advancing as it relates to reopening based on some of the positive news that we will advance here in a moment, in terms of our positivity rate, in terms of our hospitalizations and ICUs. But on testing, that’s foundational. If we’re going to sustainably reopen, we have to have the testing capacity. We have to have the results in a much more efficient period of time to allow us to make decisions on contact tracing, again, isolation, quarantine, and the like.

Here’s the new cost breakdown. Again, $150 to $200 was the average per test. Under this new partnership, our cost breakdown works accordingly. For up to 40,000 tests, the cost per test will be $47.99 cents. So let’s just take the lower end of the average. That’s a third of the cost on the lower end of the average, current costs for a test. One third. If we get our tests up to 100,000, that price drops from $49.99 to $37.78. And if we reach that 150,000 testing capacity, which is part of this contract, we’ll get the test down to $30.78. So the goal is to get down cost of tests that are averaging $150 to $200, costing you, directly and indirectly, as taxpayers and as people that have gotten the diagnostic test through your employer, through your insurance, or through taxpayer subsidized insurance, up to $150 to $200 to bring those costs down to a little over $30 a test.

We have new contract protections and we went to great lengths to put these protections into this contract, which by the way, we will be making public. It’s not just one contract. This is a contract for the labs. This is a contract for third party payment. These are independent contracts. All of those contracts will be made public and will be forthcoming. They have clawback provisions, best price guarantees. Let’s just be specific about what that means. If this partnership develops an additional partnership with even the federal government to bring down costs even lower than $30.78, our contract requires what we refer to often as favored nation status, best price guaranteed.

If there’s new technology and we are working to advance, we’ve got this X Prize that we’re partnering with because we want to see innovation in this space, new technology to really drive down the costs of diagnostics and access to testing. We want it within minutes, not just days, and we recognize that’s the direction we’re all heading as a nation, well, we have change in technology provisions that protect the taxpayers, protect us in this contract. Either this company provides that technology, or we have the ability to opt out and partner with those that do. We have also provisions that allow us to opt out if we advance at scale, the therapeutics that mitigate the spread of this disease and/or a vaccine that ultimately presents itself as a cure to COVID-19, where we can pull back.

We also have upgrade capacity at zero cost for the flu package. And this is something many of us will get familiar with over the course of the next number of weeks and months as we get tested for Influenza A and B, and these RSV, this respiratory test. Basically, you can get four tests in addition with COVID. Four tests in one. So we have a zero cost upgrade as part of the package partnership with this contractor for flu season. And we also have genomics upgrades and pooled testing upgrades as well. All the areas where we’re trying to push the envelope, where we see the proverbial puck going. We want to skate to it, but right now we need to scale, we need to provide some insurance, we need to bring down costs, we need to use our market muscle to do that, using more businesslike approach to bring down the costs and time in terms of the diagnostics.

We have been working with our partners, not only through the testing task force. And again, let me just thank the testing task force for their entrepreneurial spirit, their innovative mindset, for all the work they did to scour existing providers to see what’s available. And I can assure you, I imagine there’ll be questions, “Well, who else is out there?” We have contacted some of the most well known brands in this nation. We have tested their assertions. We kicked the proverbial tire on what they’re capable of doing, but we needed more than 100,00 tests a day. We needed guarantees in terms of the supply chain. We needed guarantees in terms of the turnaround on test results. And we landed on this provider because we felt this provider was the one that could deliver, and that has proven results, but that can deliver on what we’re promoting here today.

But we couldn’t do what we’re doing here today without additional partnerships. And I just want to thank, in particular, members of the California legislature, their leadership in the Senate and the Assembly, the budget chairs in the respected houses of the legislature for their guidance, for their feedback. We went out and talked to a number of our legislative caucuses about what they are hearing, what they need, what they’re demanding in terms of equity, response times, diagnostics-

… times, diagnostic, kind of diagnostics that they’re looking for in terms of whether or not they wanted to move forward with PCR or antigen tests. What’s the merits and demerits of the same. And all of that took shape over the course last number of weeks. But two people in particular really helped shape the expectations that we’re putting out and promoting here today. And that’s the respect of chairs of the senate health committees and the assembly health committee. And I want to just personally express my appreciation to Dr. Pan, Senator Pan, and Assembly Member Wood who’s been dealing with all kinds of additional challenges, particularly with these wildfires, for their leadership, their stewardship, and their commitment to this cause of improving testing here in the state of California and helping support this effort. I’m very pleased that both are on the line. And I want to turn it over now to Senator Pan who has been very generous and wants to offer some words as well. Senator.

Sen. Richard P.: (19:06)
Thank you so very much, governor. I want to thank you so much for your leadership. I’m Dr. Richard pan. I’m a pediatrician, a father and chair of the senate committee on health. And as a father right now, I have one child who has started school doing distance learning. I have another child about to start school. And in order for us to get our kids back to school, in order for us to get our businesses back open, in order for people to get back to their jobs, we need to be able to contain this pandemic. And in order to do that, we have to have reliable testing. And so again, California is taking the lead in establishing a reliable form of testing for the people of California. And I’m really grateful to the governor for his leadership and making this happen. This is going to be essential so that we’re able to test people in a timely manner, get the results in time that could support our contact tracing efforts as well.

Without that, we’re not going to be able to contain the outbreaks, not be able to safely send our kids back to school, to reopen more businesses. This is an essential step. In addition, really pleased to know that this arrangement is also going to allow us to not only test for COVID, but also for flu as we’re approaching the fall. Flu is going to rise. The symptoms are very similar. As a doctor, I’ll tell you. It’s going to be hard to tell the difference, but being able to have a test at no additional cost will be able to tell us whether someone has COVID, the flu or both is going to be very important diagnostically, as well as trying to track our epidemiology. I do have to take this occasion to urge everyone to get their flu shot. We want to prevent flu, not just try to treat it, but this testing is also going to be very important.

So building our testing capacity is an essential step to us moving forward. This plan is something that I know the governor’s office has been working very intensely on, and I’m pleased to be part of this announcement where we are going to, again, build our capacity here in California. Even as other states in our country, unfortunately, are struggling with this, here in California. Just like we did with PPE as well, where we said, you know what? We need to be sure that we create a reliable source of PPE. We now have to have a reliable source of testing that we can get results back in a timely manner so we can move our state forward, we can protect the people of California, we can ensure our essential workers are able to get tested when they need to, be sure our health facilities or our nursing homes, our hospitals, as well as other places are safe and our schools are safe.

This is so essential. And again, I want to thank the governor for his leadership in making this happen. And certainly, as a physician and a father and chair of the health committee and the senate, I’m very strongly in support of this proposal. Thank you.

Thank you, senator. Thank you for all of your hard work. Thank you for your support and thank you for more importantly, your leadership in this space. Also in reminding people the essential nature, where it is appropriate to get the influenza shot, to get the immunization as we move into the flu season. That’s an important reminder. Also pleased to have Assembly Member Wood who also happens to be doctor, Dr. Wood, who also chairs a critical committee in the assembly, who also has been advising and supporting our broader efforts in this space and has been very impactful in getting us to this point. Dr. Wood.

Dr. Jim Wood: (22:43)
Thank you so much, Gov. Newsom. And thank you so much for your efforts. Also, Dr. Ghaly I know has been working hard as so many have in the background. I guess you could use the phrase, game changer, and we use that a lot, but I really mean it. This is a game changer for us; the ability to be able to test potentially 150,000 more a day and get those results back really quickly will really impact people’s quality of life. I think certainly as we approach flu season, the challenges where it seems like in flu season and cold season, everybody’s coughing, to be able to know right up front in a short amount of time who is infected and who is not will be important. Certainly right now, one of my concerns has been fires in my district and the concerns about our frontline firefighters, law enforcement and all the county EMS people that are out there.

Dr. Jim Wood: (23:44)
The ability to have increased testing capacity is absolutely critical. So this is a big day to be able to use California’s amazing market power and strength. I’m proud to be a Californian today and I can’t thank you enough for your reference, Gov Newsom.

Thank you, doctor. Thank you, assembly member. Thank you both of you, senator and assembly member. Thank you for everything you’re doing. And again, special thanks to Dr. Wood and everything he’s up against as it relates to the [inaudible 00:24:14] wildfire, which we’ll talk about in a moment, disproportionally impacting his district here in the state of California. But again, thank you both for forcing us to raise our standards and forcing us to raise the expectation in terms of what we can deliver, and allowing us to flex our market muscle at scale. And I appreciate, Dr. Pan, your reference on PPE as well. It should be noted, as it relates to the wildfires just in the last week, we’ve been able to distribute some 1.3 million N95 masks to our ag commissioners all up and down the state of California, as it relates to impacts and air quality associated with these wildfires.

We would not been in that position, had we not secured hundreds of millions of procedure masks, surgical masks, and N95 masks. Over 300 million in inventory, millions that are being distributed every single week. So I appreciate in the spirit of that effort and the spirit of scale and scope of a state as large as ours, that we’re bringing that spirit into this effort. And again, we just thank you both for your leadership in that space. With that, let me transition. Dr. Ghaly, thank you as well. Of course, he’ll be available for questions specific to this contract, but I cannot impress upon you more how proud we are. And thank you, Dr. Wood, for that reference, Dr. Ghaly’s efforts in this space. Working with the newly constituted testing task force to push the envelope here, demand more and prepare for the next eight to 10 weeks to build this capacity so we can get these contract in effect and start seeing the benefit of this effort.

So again, within the next eight to 10 weeks, we should see the fruits of this effort as we build out the lab space, as we work to get the logistics work done, and we meet all of the provisions set forth in the contract. Speaking of setting forth, we are putting every single asset we possibly can, point every conceivable resource to battle these historic wildfires. Historic because we’ve already crossed the threshold already this year in terms of acreage burned that puts us not on pace to have an historic [inaudible 00:08:40], but actually sets the pace for an historic wildfire season. We have over now 15,000 firefighters working the lines, hand crews, dozers, fire engines, traditional engines, every conceivable asset that we have pushing the boundaries in terms of the state resources and the mutual aid system, as well as the benefits we’ve had from as far away as Kansas and Montana, to the incredible support we’re getting from Washington State, Oregon, among many other states.

And we’re grateful, again, to leadership in those states for assembling those assets and providing them in a timely manner to supplement our firefighting resources. Here’s why. 700 fires now across the state since the beginning of this latest round fires. Now it’s taken 1.3 million acres that have been burned. Just the last 24 hours, to put things in perspective, we’ve had 423 lightning strikes. Primarily dry lightening strikes, not in every instance, but primarily. 50 new fires overnight. By the way, as of an hour or so ago, they have been effectively suppressed, all 50 of those new fires. But it gives you a sense of the magnitude and scope of what these incredible leaders, these credible frontline heroes are doing every single day. Not only to address what is top of mind in our consciousness, these two dozen large scale wildfires, but trying to mitigate the impact and spread of all these new fires that are lighting up on almost seemingly an hourly basis now here in the state.

Tragically, we’ve lost seven individuals. The good news that we have not found, and again, these numbers are sobering because you only know what you know, you don’t know what you don’t know as we get back in. And once the fires are suppressed, we get back in and we start seeing repopulation, we’re likely to discover additional fatalities. But seven to date we have identified, and this goes for structures as well, identified just shy of 1,700 structures that have been destroyed. We anticipate that number to grow substantially in the coming days and coming weeks. Let’s talk about what we did a few days ago, and that’s the update that I provided on Monday. Wednesday, we want to update you on where we are in containment and total number of acreage burned. As you recall, the LNU fire, the Lake Napa complex of lightning that occurred, this complex of fires, as on Monday was 22% contained and packed at 350 acres, thousand acres, that is.

Today, we’ve made real progress over 48 hour period from 22% containment to 33% containment and kept the acreage relatively intact, 350,000 acres to about 357,000. CZU fire, which has generated a lot of stress for no other reason than in recorded history, we’ve never seen a fire this size and scope in this region of the state. And this is, again, another testament, demonstrable example of the reality, not just the assertion, not just the point of view, the reality of climate change in this state and its impact in this state. On Monday, the CZU in Santa Cruz area, 13% contained, 78,000 acres. Kept it under 80,000 acres, making a little more progress on containment, 19%. So encouraging LNU, CZU moving in the right direction, again, over 48 hour period. The LNU and SCU represent the second and third largest fires in California’s history, at least modern recorded history.

Monday, 10% contained, 347,000 acres. Today, more than doubled the containment, 25% and kept it relatively concentrated to 365,000 acres. I had the privilege of flying over that fire a couple of days back. Seen flames as high as 10 stories, 100 feet. An extraordinary complex that came together. One larger fire, incredible work being done. You really get a sense of that when you’re flying over these fires, these dozer crews, the hand crews, the incredible work people are doing to prepare, including the fire drops, those red lines you see next to those dozer lines and the incredible tactics that are display and deployed in these wildfires. Best in class, Cal Fire. Best in class, our mutual aid system. You don’t think it, you get to know it when you see it up close, including some of the CDCR teams that were out there doing incredible work as well. August fire generated some interest, 11% contained.

On Monday, 178,000 acre, mostly brush and grass remains a concern, but acreage has grown about 197,000, but we’re getting up to 17% containment. So progress. Progress though, really needs to be highlighted here, this moc fire. This is in around Hetch Hetchy. Could have impacted the entire Hetch Hetchy system, which is that 167 mile gravity fence system that actually feeds the water and a lot of the power for the city and county of San Francisco, and the region as it relates to the public utilities commission, that means manages that region through their work. There was real concern around this fire. Just 2,800 acres on Monday. The containment over the weekend, we got to 20%, but real concern about the impact that this could just go. And I’ll tell you, if you want a good news story, if someone actually wants to write a good news story, learn about the heroism and the firefighters. They’re 60% contained in over 48 hour period, and they kept it at 2,800.

[inaudible 00:32:42] in politics broadly defined, unlikable baseball, you don’t get credit for saves. Let’s hope that these firefighters get some credit for what they were able to produce at this fire. We’ve been talking a lot about it privately, and I just thought it was important to share that publicly. Great work at Cal Fire, great work of our mutual aid system demonstrably exampled in the moc fire. The sheep fire also of concern. This one has been stubborn, 0% containment, 26,000 acres. We are at 3%, it’s grown modestly, but I highlight it because I may need to continue to highlight this over the course of the next number of days. And one other fire wanted to highlight that was previously referred to as the castle fire, now the SQF fire, I know these are all hard to manage and to monitor, but we are managing to monitor all of them and wanted to socialize this more publicly with you.

0% contained. On Monday, 5,000 acres. It’s tripled in size, about 18,000 acres. Still 0% contained as we pull more resources from Southern California, the Lake fire and those other fires and continue to make progress on these other complexes, we will be able to pull even more resources to help, and you’ll see those containment numbers go up. But important fire to highlight or complex. And I want to just, again, note that we are doing everything we can to get on top of that. Currently, we have just shy of 4,000 people have been evacuated and sheltered statewide. Part of our emphasis and push in the COVID environment is to get people in non congregate settings. And I wanted just to highlight this briefly, of the roughly 4,000 evacuees, we now have the vast majority of them, 3,041 people out of 3,889 in hotel rooms so they can cohort in a way where they’re not mixing in these congregate facilities and settings.

All part and parcel of the protocols we put in place for not only evacuees, but we had done for homeless individuals and those that were testing positive or coming into contact with people that tested positive that needed isolate as part of our previous pandemic efforts. They’re paying dividends as well in terms of our evacuation efforts. 14 shelters now fully operational, about 848 people in these congregate shelters. So you’re seeing a decline in the total population in the congregate, you’re seeing an increase in the non congregate, the hotel rooms, which is encouraging particularly again from a health and safety perspective in a COVID environment. Here’s where we are in terms of the environment, the mitigation and the spread of COVID-19 transmission rates based upon tests. We had a tougher testing number that came in yesterday, a little over 70,000.

It brought down our total average test. Again, you can chalk that directly to the impact. Some of our testing sites, I think I mentioned Monday about 11 sites, at least over the weekend were down. We’re updating those numbers, those [inaudible 00:35:57] sites because of the heat wave and the smoke issues as well-

… heat wave and the smoke issues, as well as the fire danger and the evacuations. So that’s impacted our total number of tests. But we, nonetheless, are still seeing, despite case numbers of 6,004, we’re seeing the seven day average continue to climb in a favorable way. You can see that exampled here, not just as a seven day average, which is 5.8%, which is our positivity rate over a seven day period, but this is the positivity rate over a 14 day period, a slide many of you are familiar with. So the positivity rate dropping 6.564. We’re seeing that 14 day now decline, 6.1. Again, 5.8 on the seven day.

Hospitalizations continuing to trend in a very positive direction. 17% decrease over the last 14 days. You’re seeing the same things, about 18% on ICU admissions. We’re now down about 16% of our total COVID positive patients in ICUs in terms of our ICU capacity. It’s dropped from 23% down to 16%. But again, hospitalizations, ICUs tracking in an encouraging and favorable direction.

Not surprisingly, based upon all of this, the county monitoring list, which again, is a dynamic list. People come on, people come off, you see these numbers change on a consistent basis. You see 34 counties now, not the 35. Here are the ones that were removed, Amador and Glenn. We added Tehama County to the list. I’ll remind you, as we close on Friday, we’ll be putting out the new sectoral guidelines, our new framework based upon experiences, best practices, and expressed concerns and input that we’ve received over the course of the last many weeks and months, particularly over the last many days as we’re working with local health officials on augmenting and addressing their concerns, augmenting those guidelines based upon those concerns addressed or insight that they’re providing. And so Friday, expect that list, expect some other announcements on Friday.

But we, again, today really wanted to highlight what is a predicate for any sustainable reopening, safely reopen in a sustainable way. We have to improve the testing protocols. Can’t happen soon enough. Again, eight to ten weeks to get that moving and operationalized. It’s additive, we’re not taking away anything that already exists. We’ll be additive to those efforts, but it will allow us more flexibility, again, more reliability. And, I believe, will have an impact not just on the state in terms of driving down costs to test, but I hope can enliven people across this country to cut down the cost of this test. If you are fiscally conservative, then you should be demanding the federal government use its marketing power to drive down the cost of tests in the state of California. We are doing our part and we’re hoping this can inspire others to do the same. And we hope to leverage these efforts. And we’re also working outside the state potentially to include other states in these broader protocols and efforts if, indeed, that avails itself in terms of the success of this new partnership that we have formed.

Always, and forgive me, but as they say, repetition is the mother of skill, wear a mask please. Physically distance where you can. Continue to practice the kind of hygiene that you all know from your early years when your mother and grandmother were admonishing you for not washing your hands. That will protect you not only from spread of this virus or mitigate the spread, but also impact upcoming flu season in a meaningful way. And you’ll see on Friday on the issue of minimizing mixing, we’ve got some new PSAs we’ll be putting out around the issue of mixing and where we’re seeing challenges. And so I cannot impress upon you more, though I will on Friday, the importance of doing what you can to minimize mixing when you’re outside of your cohort and outside of your household. Critical in terms of mitigating the spread.

So that’s the overview for today. A lot to share on wildfires, on the COVID updated numbers, previewing what we’ll put out Friday, continuing to work very close on evictions with the legislature, working with the legislature to get through this last week, this legislative session. A lot of moving parts, but progress in many of these areas. And again, partnerships that are proving effective. And again, I cannot be more grateful for the senator and the summit member for joining us here today in advancing that cause of partnership as well. With that, happy to take any questions.

Speaker 1: (40:58)
Phil Willon, LA Times.

Phil Willon: (41:01)
Hi, Governor. One thing I just want to clarify. The announcement you made today about the diagnostic testing, that’s separate than actually testing kits, is that correct? And I guess my question would be will the state have, I guess, upward of a quarter million of the capacity of a quarter million testing kits per day that can get processed? Number one. Number two is given some of the events today and the state legislature with some positive COVID tests, I’m just curious if you have been tested or members of your family have been tested as well as your senior staff? Thank you.

Yeah. I can’t speak to the contemporary nature of tests. But after, as you know, I visited prisons and felt it was appropriate, in the environment that we’re in, to get tested, I was tested. Tested negative. And that was a number of weeks back, candidly. And I hesitated, full disclosure. I was rarely consistent sharing this publicly to get tested until I felt everybody that needed a test was getting access to the test. I don’t want to put myself front of the line for many, many months. So I delayed that until a visit into prison where I felt it was appropriate around that time to do so. Accordingly, my family was tested in that capacity as well.

As it relates to the issue of the supply chain, all the reagents, all the fundamental ingredients, and again, there’s 20 component parts in these PCR tests that required, are part and parcel of this contract. And the reason we chose this particular company, not only is it a public company, not only have been partnered with this company for over three decades, not only is it very familiar with every parent out there that has one of those genetic tests that are mandated in the state of California for every newborn, we kicked the tires, all these other companies, and many of them had a lot of the components, but not all of the component parts to get us to where we are. Save the logistics, the third party billing, which is our responsibility, and some of the swabs and the viral transport media.

We currently have 13.8 million in our inventory. You can take a look at our dashboard that we put on the covid19.ca.gov website. You’ll see that 13.8 million on that dashboard. That’s our current inventory. We’re getting millions a month more new swabs and viral transport media. That will be on us to procure. And we have all the confidence in our capacity to do that as we are moving forward much more aggressively and much more effectively in that space and have already stockpiled millions and millions of swabs and the viral media for transport.

Speaker 1: (43:43)
Alexei Koseff, SF Chronicle.

Alexei Koseff: (43:48)
Hi Governor. You mentioned this would be dragging down the cost of testing. Is that because you have locked in this processing price that you mentioned through the contract? Or are you expecting federal aid that would further offset other costs that the aid is expected to pay? Can you clarify a little bit more about how this is driving down the cost of the testing?

It’s just using your market power, using your purchasing power, using businesslike approach to leverage that marketing power to drive down costs in a more effective and efficient manner. And so we negotiated, negotiated. And we had conversations with many, many different providers, but we negotiated best price here in favored nation status if indeed this contractor negotiates another group even lower prices, that we’ll get that same matched lower price. But this is a volume discount, is the best way I could describe it, based upon expectations in terms of total number of tests conducted. The more tests, and let me go to this slide, the new cost breakdown slide, you’ll see a slide, the more tests, lower the price. Less tests, a little bit higher price. But again, the price up to 40,000 tests is, again, a third of the lower end average cost of current tests. So it’s a substantial discount. And that will create savings for employers, for plans, for our Medi-Cal system, for as we’re all taxpayers for Medicare in terms of costs.

So we think it’s going to create a pricing and will have pricing impact that will transcend not only in this context, but have impact, more broadly, to the testing market because the scale and scope of California. So I don’t want to overstate things because when one does that, they usually get burned. But I don’t want to understate the significance of our capacity to drive down costs and the significance of the cost of testing. Again, it’s jaw-dropping. We’ve done 10.83 million tests in the state of California averaging $150 to $200. Literally, as I said, do the math on that. The costs are jaw dropping and they’re simply not sustainable. As we move into the prospect of a second wave and the likelihood in the spring of next year, even if there’s promising therapeutics and even if we see some immunization takes shape, that the distribution, the manufacturing, the supply chain to get these immunizations out at the scale that creates the kind of immunity that we’re looking for, that’s going to take some time.

And people start testing again across the state, you saw this a few weeks ago, when you started to see the flare ups in Florida and Nevada, now you’re seeing it in Iowa, you saw it obviously in Texas, Georgia, Louisiana, elsewhere, you saw then more people testing in those states finally, and putting pressure where we had those big delays in getting test results back. We can’t be victims of that inevitable fate. It’s likely to happen again during flu season. We just don’t want to be back in that place. And that’s why we want to control our own fate. Move the markets, reduce, create some more competition in terms of cost, ultimately bring down the cost for everybody. And we think this will improve innovation as well, as part of the larger thrust.

Speaker 1: (47:27)
Elex Michaelson, Fox 11.

Elex Michaelson: (47:31)
Hi Governor. Since nobody has asked this yet, I will jump on the grenade on behalf of everybody.

You don’t have to, you don’t have to.

Elex Michaelson: (47:38)
I’m curious if you are watching the RNC and if you had a response to your ex-wife who said in prime time the other night that California is a land of discarded heroin needles in parks, riots in streets, and blackouts in homes.

This may leave you wanting, but let me first acknowledge that I appreciate you saying landing yourself on the grenade and let me just extend appreciation for your effort to get my response. And I respectfully defer to the next question.

Speaker 1: (48:09)
Rachel Bluth, Kaiser Health News.

Rachel Bluth: (48:13)
Thanks, Governor. The legislature is considering, obviously, a bunch of open end discussion right now. Bills on PPE and contact tracing have languished or died altogether. What would you like to see from them to get to your desk to deal with the pandemic in the next [inaudible 00:48:34]?

We’ve been working. Look, we’ve got hundreds of bills we’re currently in discussions and negotiation with with the legislature. On an hourly basis, not just a daily basis, the prospects of success with amendments, prospect of failure with the bills presents themselves. I’m not going to get in to the details of that. It wouldn’t be prudent at this stage. There’s so much that’s happening in real time. But we are advancing a collective cause, one that unites all of us across the spectrum, across both houses, the legislature. And that is to make sure that we’re more prepared going into the future, make sure that we replenish, not just replenish our stocks, that we set a new bar, a new standard in terms of where we are in terms of our preparedness going forward. We’re trying to find out where we land, what’s the appropriate level where we don’t overly indulge. A lot of these are perishable. A lot of these have end dates. We have to look at what’s feasible, what’s manageable, what’s appropriate. And so that’s the test of which we’re engaged, test to which we continue to dialogue. And progress is being made.

In many instances, there are a number of different bills, as you noted, just on PPE. There’s a number of bills more broadly across the spectrum related to this pandemic. And we continue to make progress in those conversations.

Speaker 1: (49:51)
Sophia Bollag, Sac Bee.

Sophia Bollag: (49:56)
Hi Governor. I’m hoping to get a little bit more clarity on the cost here for this contract or series of contracts. So the current average cost that you mentioned, that $150 to $200 per test, as I understand it, that includes not only just the lab costs, but also the costs for personnel who are conducting the tests, running that testing site, providing PPE for those people who are conducting the tests. So can you explain, does this contract cover all of those costs? And is that how you’re able to get a number that is comparable to that current overall cost that you mentioned? And can you also explain, it sounded like you might’ve been saying that this will lower costs for health plans. How does that work if this is a contract between a company and the state?

Perfect. Dr. Ghaly’s already out of his seat, moving in this direction, and could talk to you about how we’re responsible for logistics, which means transporting the tests. We’re responsible for building out the lab site and how we have assumed those costs and how we will get those costs reimbursed through these contracts, and what the assumed costs are specific to the cost breakdown that I provided for this new contract. He’ll break those down. And then he’ll more broadly describe who currently is paying for tests and why we believe this will lower the costs for employers, for the state, and for the plans.

Dr. Ghaly: (51:36)
Thank you, governor. And thanks for the question. Indeed, the costs that the governor mentioned today, what that captures is the entirety of the costs of running the tests. So when a specimen that’s been collected in the community, so in a clinic, at a mobile site, at one of the drive through sites, let’s say in a school one day or at a farm or another factory, once that specimen is collected, it goes to a lab for processing. And as soon as it hits the front door of that lab, the costs to get it processed and to get that result to our public health departments, to the patient person themselves, to the clinician who might’ve ordered the test, that’s what’s included in this price. So that includes the test kits, as we’ve talked about, reagents, all of the instruments that are required, the staffing, which is a very integral, important part of processing these tests, as well as the PPE for those staff to be able to run the test effectively. So all of that is what’s included in this price.

Dr. Ghaly: (52:42)
There are some other components, as the governor described. There is the entirety of the specimen collection. So the responsibility that we’ve taken to partner with partners across the entire state to get swabs out to those test collection sites. In some cases, as we have with the OptumServe and Verily sites and many, many other sites where tests are collected, setting up those collection sites, working with partners across the state to get those set up, but really getting those swabs in the right quantity and numbers so they’re not a rate limiting step is one of the important factors that we continue to work on and get out there. The governor mentioned the number of swabs and transport media that we currently have and increasing that over time. There’s the entirety of moving the specimens to the lab location so they can be processed. That logistics contract is another part of it.

Dr. Ghaly: (53:36)
And then on the backend, that ability to bill our insurers. This is a price that California has locked in for California, but we had planned to extend that. These lower costs that will be reimbursed at a much lower rate compared to some of the other test reimbursement rates that the governor mentioned earlier. So together, these creates not just an opportunity to increase our-

Dr. Ghaly: (54:03)
… together. These creates not just an opportunity to increase our testing volume, not just an opportunity to get the per cost test down for all Californians, but we think really to give us, and emphasizing a point the governor made, the ability to deal with the disproportionate impact of COVID on communities that haven’t had as much access to testing, maybe don’t. Can’t take the day off of work so really need the testing site to come to their workplace to get tested. All of these opportunities are opened up in a way that they weren’t before. So really leading with this equity principle, looking at testing as an important tool to address disproportionate impacts among population, focusing on the volume, as the governor said, knowing that we have faced before the dependence on other… The level of testing and other states, deliver our own testing. This creates a degree of testing independence that we haven’t enjoyed until now. And then of course, the cost piece, which is wrapped up in the original part of your question on what drives these costs.

Dr. Ghaly: (55:03)
So we’ll be talking about this for days and weeks to come. Partnering with many Californians to get this to help us move not just schools, not just businesses, but really to create a level of insight into how the transmission of COVID-19 is moving in our state, allowing us to address some of the contact tracing opportunities to really reduce and tamping down transmission in places where we’re seeing hotspots today. And hopefully no more of those tomorrow.

Thank you, doctor. And look, the bottom line is, and you’ve seen that in some of the incredible quarterly profits. Some of these labs, I mean, we’re well past the point where we need to call the question and we need to do something to lower the costs to taxpayers, to employers, to others in this space. And that’s exactly what the State of California is doing.

Speaker 2: (56:04)
Stephanie Sierra, ABC 7.

Stephanie Sierra: (56:05)
Hi, Governor. The CDC is now saying there is no need to test, even if you’ve been in contact with someone infected with COVID-19. And we’ve heard Governor Cuomo criticize this change as part of President Trump’s policy of denying the problem and wanting fewer people to take the test. My questions are, do you agree with that? And what’s your response to this recent change in guidance?

I don’t agree with the new CDC guidance period, full stop, and it’s not the policy in the State of California. We will not be influenced by that change. We’re influenced by those that are experts in the field that feel very differently. And so with respect to the CDC, no, that is not the policy guideline that we want brace or adopt here in the State of California.

Speaker 2: (56:55)
Spencer Custodio, Voice of Orange County

Phil Willon: (56:59)
Hi, Governor. Thanks for taking our questions. In Orange County there’s at least five space testing sites. And you had earlier mentioned that there’s an average delay in tests from five to seven days. Is there any concern by you or Dr. Ghaly that maybe that has artificially lowered the cases per 100,000 residents and maybe move the county off the watch list a little sooner than it might’ve should’ve been?

Yeah. I want to be careful in the response. Let me ask Dr. Ghaly to come back up and he can talk more learnedly about what that delay may or may not have done as it relates to that monitoring list, the watch list and where particularly Orange County has been in that space.

Dr. Ghaly: (57:52)
Thanks again, Governor. Indeed, Orange County, all of the counties across the state have experienced delays in not just collecting tests, but getting those tests processed. Sometimes you’ll get the test back in 24 hours or less. Especially those who are quite ill with symptoms, we want to know right away and that’s still achievable. But when we were experiencing the longest turnaround time issues, we were seeing some tests returning two and a half, three weeks after they were collected. And indeed, not only is that really not a useful result to the person who was tested, to those doing contact tracing, but it does make tracking the data difficult. We have worked over the past many weeks to not just improve our ability to understand the data that’s coming to us, but really assign the test to the dates that it was collected, understanding when it’s reported and building our models around all of our calculations, whether it’s test positivity case rates per hundred thousand, around that detail.

Dr. Ghaly: (58:54)
So within a great deal of contact with the counties, including Orange County, these conversations have given us a degree of confidence that the way we’re reporting and working with counties is appropriate. Again, we do always have an open door to hearing about different approaches. And we hear from our counties quite often about different ways to look at these numbers and the data. And when we continue to learn and evolve in that space, we share that with you and adjust our way of doing the calculations. But in our current approach, we feel confident that we’re doing it in a tried and true way and that counties that are on the monitoring list are there because we’ve reviewed their data. And those who come off are there for the same reason of review.

Next question.

Speaker 2: (59:50)
Adam Beam, Associated Press.

Adam Beam: (59:55)
Hi, Governor. The news release says that the state will be standing up a laboratory facility to process these tests. Does that mean the state’s going to be building a massive lab as part of this contract? And secondly, how do you think that all these new tests will impact tracing? I’m not sure how it’s working now. I mean, do you think we have enough to make it work with two and a half times as many tests?

Gov. Newsom: (01:00:20)
Yeah. We’ll substantially advance those efforts. I’ll have Dr. Ghaly come up in a moment and talk a little bit more specifically about how we believe this will substantially impact our ability in real time to do contact tracing and make it more meaningful because of the diagnostic time and the results will allow us more capacity from an epidemiological perspective to mitigate the transmission of disease and identify cohorts that may have been exposed to someone that has tested positive will help advance our efforts in schools. Help advance our efforts more broadly across the spectrum from the hospitals to skilled nursing facilities, including in private sector, sector by sector, industry by industry.

Gov. Newsom: (01:01:03)
Specifically though, let me take the first part of your question. And that is yes, we will build building out, and that’s the 8 to 10 week process. We’ll be building out that site using the state capacity to move quickly, to move efficiently and to build out. We’ve identified a specific site to develop this lab. We have the people, we have the expertise, we have the specs, and we’ll be moving forward very, very quickly. And that’s why we were very eager to make public this proposal and this announcement so that we can move forward to do just that. And again, very gratified by support of key members of the California Legislature. Specifically as it relates to that second part of your question, Dr. Ghaly can amplify a little bit more.

Dr. Ghaly: (01:01:53)
Yeah, thanks again. The governor’s right on with contact tracing approach. The availability of turnaround times of 24, 48 hours, our goal is to get it down to 24 hours, means that results get in the hands of counties, people doing disease investigation and contact tracing more quickly so that it’s more meaningful. They can reach out to those who are positive, identify their contacts and catch them at the point when they might be most infective to those that they’re around. So we believe that this ability to identify cases earlier, more quickly throughout this state will actually enhance our ability to put contact tracing, make it a more effective tool than it has been, especially in those weeks and days when we were experiencing very long turnaround times. And by the time you got the result, somebody’s already run through at least one full incubation period. And having them isolate at that point, or reaching out to their contacts may not be as high yield as it would be to reduce infections that come out of that initial case.

Speaker 2: (01:03:11)
Final question, David Baker, Bloomberg News.

David Baker: (01:03:16)
Yes. Governor, I wanted to ask essentially two natural disaster related questions. One, you touched on it earlier, do you indeed blame this current fire siege on global warming? And then two, thinking of a natural disaster half the country away. I know we did have some mutual aid people coming in to help us from Texas and I’m not sure about Louisiana, but there’s a good chance a lot of first responders are going to be pulled to the center of the country to respond to Hurricane Laura over the next 24 or 48 hours. Are we going to lose people to that effort? And if so, do we have a plan for replacing them?

Gov. Newsom: (01:03:54)
Yeah. Texas has provided mutual aid support. Louisiana has not. We believe under the circumstances we were tracking, Governor Abbott certainly has been tracking very closely the prospects, the impact of this hurricane. And the benefit, again, of a hurricane is through the capacity, incredible capacity of NOAA and others, to predict with a little bit more certainty when the impacts will begin to occur. They assess that. They made a determination of what assets they felt they can provide the state. And he under that circumstance, and we went back and forth, he felt that those assets were appropriate in terms of his total needs. Obviously, if the governor needs to take back those assets, we’ll provide them immediately. And the good news is, as an example, specific to your question. Just today, we got a word back from Washington State. They’re providing even more resources that will more than make up for any diminution of resources coming from Texas in particular. All the other states that have provided assets, we don’t think will have any direct impact from the hurricane.

Gov. Newsom: (01:05:05)
So again, it’s part of a broader mutual aid system. I noted last week when I talked about the mutual aid system in the West coast, that many other states were also experiencing wildfires. And so there were constraints already in this space. But 90, 91 is the current cohort of engines that have come into the State of California. And we look forward to getting even more support from those states that have already provided it. And we also, as you know, have support coming from overseas. We’ll be making potentially some announcements tomorrow or the next day on a number of other countries that have expressed interest in supporting us and providing resources in real time. So that’s on the issue of mutual aid.

Gov. Newsom: (01:05:49)
On the issue of blame, I don’t cast or assign any blame. Each and every one of these fires is investigated. We have protocols and after action reports that are provided in each and every instance. We have an incident command strategy that requires a real adjudication of the facts on the ground. Let me just say this, for any of us to assert that they know exactly the cause of each and every fire, I think that is very misleading at this stage. One thing we do know, however, is we dealt with an unprecedented number of lightning strikes, some 14,000. What we do know is we dealt with unprecedented weather, heat dome on the West coast of the United States.

Gov. Newsom: (01:06:27)
What we do know is we had 130 degree weather here in the State of California, which arguably if it’s not a world record, it’s very close to being a world record. The hottest recorded temperature in modern world history. We do know that had an impact in terms of our capacity to even provide the energy needs, not only here in the state, but put pressure even outside the state. So that is somewhat anomalous. It’s anomalous in the context of what we grew up with decades ago. We experienced anomalies, but not as often as we now are experiencing. They’re almost becoming exceptions, more like the rule. And as a consequence, it begs the question, is what the scientists have been saying, 98 plus, 99% of them for decades taking shape?

Gov. Newsom: (01:07:19)
Is it in fact true that they no longer have asserted a point of view, they’ve proven their point of view? I would argue they have proven their point of view where the hots simply are getting hotter. That’s demonstrable. That’s evidenced based where the heat is such that we have fires, the likes of which we have never experienced in our lifetime. And that’s also demonstrable in terms of the total number of acres burned this year in contrast and comparison to previous years and in the fact that we’ve had some of the most ferocious and damaging wildfires in modern recorded history.

Gov. Newsom: (01:07:55)
I’m not naive. Not naive about forestry practices over the course of the last 100 years. I’m not naive about the impact of structures and the acuity of consciousness around these fires as a consequence to the structure and lives that are impacted by these fires. All of those things have to be considered as well. But I am not in denial about climate change. As I said the other day, mother nature has joined the conversation. It is overwhelming the evidence. If you don’t believe in climate change, I’ll repeat, please come to the State of California and we will reeducate you or ultimately enlighten you as to the consequences of the earth and its temperatures increasing and the consequences that are having in terms of droughts not just wildfires, as well as floods and as well as our seasons as we’ve come to know them that are substantially impacted. Shoulder seasons, wets getting wetter, not just the hots getting hotter. Snowpack impacts and the like. I can go on, but I’ve taken enough of your time.

Gov. Newsom: (01:09:02)
I want to just thank everybody for your time and let you know that it is about time for us to now move into a new phase. We look forward on Friday to illuminating you on what that phase will look like when we begin to move forward with some modified reopening in a much more prescribed way than we’ve seen in the past. In a different way than you’ve seen in the past with timelines, scope and expectations that will be set with we hope some real clarity and conviction as we announce those protocols on Friday. Now it’s new PSAs and now it’s a series of other steps and points of contact and access to information, new website, all again on Friday.

Gov. Newsom: (01:09:53)
I want to continue to remind everybody the importance of being vigilant, not only in terms of listening to those experts. If you’re being told to evacuate, take seriously those evacuation orders. Everybody continue to recognize that we need to reconcile the fact that the pandemic is still among us and transmission rates are still growing in the state. It’s nice to see that growth rate begin to decline, but growth none the less in terms of positive cases coming in every single day. Death numbers that continue to be too high. Mortality, morbidity rates that continue to sober the census and require us to take action. Nothing more impactful than wearing a face covering. Thank you. Look forward to catching up on Friday.

California Governor Gavin Newsom August 26 Press Conference Transcript

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