As Gov. Gavin Newsom navigates one of his most vexing problems during the pandemic, supplying the state with enough tests for COVID-19, he has relied heavily on a single company: insurance giant Blue Shield of California, a generous campaign contributor and supporter.

Nearly half of the leadership positions on Newsom’s high-priority task force on coronavirus testing are filled with Blue Shield executives. Its CEO, Paul Markovich, is the co-lead, alongside the assistant director of the state Department of Public Health.

All told, employees of the insurance company make up 22 percent of the 68-position team. The company, based in Oakland, has more members on the task force than all of the other private-sector representatives combined.

Blue Shield’s role on the task force is to help the state with the time-intensive work needed to ramp up testing, not to craft policy, said Dr. Charity Dean, assistant director at the California Department of Public Health. Its work is “based on science,” she said.

“The Blue Shield staff do a lot of the phone calls and heavy lifting,” said Dean, who leads the task force with Markovich. “The state of California is always the one to make decisions, but we’re informed by really smart people on the task force.”

In addition to spending nearly $1 million lobbying on nearly four dozen bills this legislative cycle, including on hospital billing and drug pricing, the company has contributed $200,000 to Newsom’s political efforts. That includes his reelection effort and his failed campaign to pass a school bond in the March primary.

During the last election cycle, it spent about $1 million to elect Newsom as governor.

Blue Shield’s outsized influence on the testing task force is raising concerns about what the insurance giant stands to gain from a blossoming partnership with the governor during a crisis that has upended health care for the foreseeable future.

Wendell Potter, a former Cigna insurance company executive turned industry critic, said Blue Shield’s disproportionate representation on the task force was “baffling.”

“What Blue Shield ultimately will gain from this, I don’t know. But I think it bears scrutiny,” Potter said.

From the start of the coronavirus outbreak in California, testing has been Newsom’s most stubborn problem. He first identified it as his “top priority” in February, when he announced the state lacked adequate supplies and was counting on the federal government. More than a month later, the feds hadn’t delivered, and California was still short on swabs, chemicals and other materials needed to test people for the COVID-19.

He turned to Blue Shield of California for help. The Newsom administration looked to the company as it ramped up the California COVID-19 Testing Task Force, which has grown to include 11 subcommittees.

State task forces that draw from the private sector are often designed to make sure everyone has a seat at the table.

In California, testing task force leaders say the group is composed differently because it was formed under unusual circumstances that forced quick action during an escalating crisis. As a result, Blue Shield looked in-house.

“The easiest thing for me to do was to recruit inside of Blue Shield,” Markovich said in an interview with The Sacramento Bee. “We are a resource to the state. We are volunteers to the state. We are not decision makers, we are not lobbyists. It’s not a policy-making group.”

Markovich said prior to joining the task force he had already assembled a team within the company to address supply shortages hampering testing. He said he reached out to Dr. Mark Ghaly, California’s Secretary of Health and Human Services, and Ghaly responded by asking him to help lead a governmental task force on testing.

The California Department of Public Health employs nearly 4,000 people and has a budget of $3.2 billion.

But Markovich says state and local health departments don’t have the staff or the resources to ramp up testing on a pandemic scale. He saw an opportunity to help solve that problem by providing private-sector personnel to do the legwork the government couldn’t do on its own.

A large cohort from one insurance company on a high-profile task force isn’t necessarily suspicious, said Art Caplan, director of the medical ethics program at New York University’s Langone Medical Center.

It could come down to an “ongoing relationship” between the insurance industry and elected officials who value the experience.

Staffing it with your colleagues could just be a matter of convenience. But Caplan was still puzzled by the arrangement.

“That does strike me as odd,” he said. “Insurance people would not be useless. I just wouldn’t think you would need a lot of them.”

‘We want to save lives’

The task force’s goals include finding ways to test more people who aren’t showing signs of COVID-19 and ensuring 90 percent of Californians are within an hour’s drive of a testing site, according to the Newsom administration.

Newsom has also charged the team with accelerating turnaround time for results, evaluating new types of tests and ensuring there are enough workers to conduct them.

Markovich says the task force increased testing by coordinating supply chain logistics – determining which testing sites had shortages of equipment like swabs and finding equipment for them. Now that the state’s capacity has increased, the task force is working to encourage more people to get tested and make sure people know that tests are no longer just reserved for sick people and essential workers, although those groups are still prioritized.

The task force aims to average more than 60,000 tests per day by the end of the month, Dean said. Doctors are well-represented on the task force and said tapping private sector expertise was essential given the magnitude of the problem, Dean said.

“This wasn’t something government could solve alone,” she said.

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Newsom last week credited the task force for increasing testing from about 2,000 tests per day in March to 41,000 tests as of Tuesday.

For California to continue reopening its economy, the state needs to test far more people, said Anthony Wright, director of advocacy group Health Access. Under the current, fragmented health system, insurance providers like Blue Shield are best positioned to coordinate the various segments of the industry needed to scale up testing, he said.

“I appreciate that Paul Markovich at Blue Shield volunteered for this position and brought some of his team with him to figure this out,” Wright said. “In the absence of having a more robust public health infrastructure, we need private plans to bring their knowledge, their relationships to bear on this fundamental problem.”

Most of the task force members are Newsom administration officials, primarily from the state’s public health department and the California Office of Emergency Services.

But Blue Shield employees make up the next largest group, with executives holding eight of the 17 leadership roles, including for testing sites, supplies, data and overall task force logistics. A ninth position is occupied by someone who recently left the insurance company for a job at the California Medical Association, a powerful lobbying group.

Markovich said about 30 Blue Shield employees have helped with the task force at some point, with a core group of about eight, including himself, spending more than half their time on the project.

“All of us are equally affected by the virus,” Markovich said. “We all have friends and families who have been affected by it. We want to save lives, not just livelihoods.”

Kaiser Permanente is represented on the task force by an infectious disease doctor. The California Hospital Association, Stanford University, University of California and a handful of other organizations and local governments are also members.

Asked about the sparse representation on the California’s testing task force, Kaiser Permanente said it was “pleased” to have a seat on the state task force and said it was working on other local, state and federal testing-related projects.

Insurance provider Health Net said it would “wish the task force success.”

A history with Newsom

Blue Shield is a frequent donor to political and philanthropic efforts by California politicians. It’s also a powerful lobbying force.

The trade group that represents Blue Shield, the California Association of Health Plans, has spent more than $1.4 million this legislative session lobbying lawmakers and the Newsom administration, including on COVID-19. That’s in addition to the nearly $1 million the company spent on lobbying since the start of the legislative session in January 2019.

In its filings with the Secretary of State, the insurance provider reported lobbying on 45 pieces of legislation, including high profile hospital billing and drug price bills. It also reported lobbying the governor’s office and health agency on prescription drug policy, Medi-Cal and mental health coverage.

Blue Shield’s history with Newsom dates back at least a decade.

The insurer sponsored Project Homeless Connect, one of Newsom’s hallmark achievements as San Francisco mayor. Markovich, then the company’s vice president, spoke glowingly about the outreach effort in 2010 and said Blue Shield was “proud to provide those in need with access to the necessary medical and social services to get back on their feet.”

Blue Shield, which reported $20.6 billion in revenue in 2018, in January said it would contribute $20 million to a fund for homeless aid that Newsom proposed in his now-defunct January budget plan. Newsom praised the effort and said the Blue Shield’s work and generosity should “serve as a model for others to follow.”

“It’s our collective responsibility to meet this moment with bold action and intentional leadership – and that’s exactly what Blue Shield’s leadership is doing,” Newsom said in a news release posted on the company’s website.

Blue Shield’s support of Newsom, and his support of the company, comes despite opposing his highest profile health care proposal to replace the current system of private and public insurance with a government-run system.

So-called single-payer health care threatens the existence of private health insurers like Blue Shield, which opposed a 2017 bill Newsom endorsed to create a single-payer system in California.

Since taking office, Newsom has not pushed the Legislature to take up another single-payer bill, drawing criticism from the nurses union, which also backed his gubernatorial campaign. Instead, he’s expanded access within the current healthcare system, drawing praise from Blue Shield.

And now, the nurse’s union is wary of the task force arrangement.

Stephanie Roberson, lobbyist for the California Nurses Association, said the task force should focus more on keeping people safe and less on reopening the economy. She described the task force roster as “shocking,” with not enough people representing labor and clinicians.

“As I look at this list, I don’t see any groups representing labor, I don’t see any advocacy groups,” she said. “This is obviously a move to get us back to work. … This is really bad.”

In addition to the time Blue Shield executives are donating to serve on the task force, the nonprofit insurance provider has also contributed to a fund Newsom established to help immigrants without legal status during the COVID-19 pandemic.

It’s also given hundreds of thousands of dollars to support Newsom’s Commission on the Future of Work and his inauguration fundraiser for fire victims.

Markovich in an interview with consulting firm McKinsey and Company about the testing task force said that he hopes public health and data infrastructure will see significant improvements after the crisis.

“I hope,” Markovich said, “that we learn deeply from this crisis and it accelerates some structural change that we need.”