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This is how America gets its vaccines

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After just a week in office, the Biden administration is already under immense public pressure to fix America’s mangled vaccine rollout.

Operation Warp Speed injected enormous sums into developing vaccines but left most of the planning—and cost—of administering them to states, which are now having to cope with the fallout. The reliance on chronically underfunded health departments has exposed a threadbare digital ecosystem in which manual data entry, unscalable though it is, is often the fastest way to fix things that break.

Compounding the problem, local leaders have repeatedly complained about inconsistent vaccine supplies. The lack of top-down coordination and communication has led to thousands of appointment cancellations and countless doses tossed in the trash.

Biden’s newly released pandemic strategy is organized around a central goal: to oversee administration of 100 million vaccines in 100 days. To do it, he’ll have to fix the mess.

Some critics have called his plan too ambitious; others have said it’s not ambitious enough. It’s guaranteed to be an uphill battle. But before we get to the solutions, we need to understand how the system operates at the moment—and which aspects of it should be ditched, replaced, or retained.

From manufacturer to patient

At the federal level, two core systems sit between the vaccine factories and the clinics that will administer the shots: Tiberius, the Department of Health and Human Services’ vaccine allocation planning system, and VTrckS, the Centers for Disease Control and Prevention’s vaccine ordering portal. 

Tiberius takes data from dozens of mismatched sources and turns it into usable information to help state and federal agencies plan distribution. VTrckS is where states actually order and distribute shots.

The two are eons apart technologically. Whereas Palantir built Tiberius last summer using the latest available technology, VTrckS is a legacy system that has passed through multiple vendors over its 10-year existence. The two are largely tied together by people downloading files from one and uploading them to the other.

Dozens of other private, local, state, and federal systems are involved in allocating, distributing, tracking, and administering vaccines. Here’s a step-by-step explanation of the process.

Step one: Manufacturers produce the vaccine

HHS receives regular production updates from Pfizer and Moderna. The manufacturers communicate estimated volumes in advance to help HHS plan before confirming real production numbers, which are piped into Tiberius.

Both vaccines are made of messenger RNA, a biotechnology that’s never been produced at scale before, and they need to be kept extremely cold until just before they go into a needle: Moderna’s must be kept at -25 to 15 °C, while Pfizer’s requires even lower temperatures of -80 to -60 °C. In the fall, it became clear that manufacturers had overestimated how quickly they could distribute doses, according to Deacon Maddox, Operation Warp Speed’s chief of plans, operations, and analytics and a former MIT fellow.

“Manufacturing, especially of a nascent biological product, is very difficult to predict,” he says. “You can try, and of course everybody wants to you try, because everybody wants to know exactly how much they’re going to get. But it’s impossible.”

PFIZER

This led to some of the first stumbles in the rollout. While training the states on how to use Tiberius, Operation Warp Speed entered those inflated estimates into a “sandbox” version of the software so states could model different distribution strategies for planning purposes. When those numbers didn’t pan out in reality, there was confusion and anger.

“At the end of December, people were saying, ‘We were told we were going to get this and they cut it back.’ That was all because we put notional numbers into the exercise side, and folks assumed that was what they were going to get,” says Maddox. “Allocation numbers are highly charged. People get very emotional.”

Step two: The federal government sets vaccine allocations

Every week, HHS officials look at production estimates and inventory numbers and decide on the “big number”—how many doses of each vaccine will go out to states and territories in total. Lately, they’ve been sticking to roughly 4.3 million per week, which they’ve found “allows us to get through lows in manufacturing, and save through highs,” Maddox says.

That number goes into Tiberius, which divvies up vaccines on the basis of Census data. Both HHS and media reports have sometimes described this step as using an algorithm in Tiberius. This should not be confused with any kind of machine learning. It’s just simple math based on the allocation policy, Maddox says.

Thus far, the policy has been to distribute vaccines according to each jurisdiction’s adult (18+) population. Maddox says the logic in Tiberius could easily be updated should Biden decide to do it on another basis, such as elderly (65+) population.

Once Operation Warp Speed analysts confirm the official allocation numbers, Tiberius pushes the figures to jurisdictions within their version of the software. An HHS employee then downloads the same numbers in a file and sends them to the CDC, where a technician manually uploads it to set order limits in VTrckS. (You can think of VTrckS as something like an online store: when health departments go to order vaccines, they can only add so many to their cart.)

Even that hasn’t been an exact science. Shortly before the inauguration, in a phone call with Connecticut governor Ned Lamont, outgoing HHS secretary Alex Azar promised to send the state 50,000 extra doses as a reward for administering vaccines efficiently. The doses arrived the next week.

The deal was representative of “the rather loose nature of the vaccine distribution process from the federal level,” Lamont’s press secretary, Max Reiss, told us in an email. 

Step three: States and territories distribute the vaccine locally

State and territory officials learn how many vaccines they’ve been allotted through their own version of Tiberius, where they can model different distribution strategies.

Tiberius lets officials put data overlays on a map of their jurisdiction to help them plan, including Census data on where elderly people and health-care workers are clustered; the CDC’s so-called social vulnerability index of different zip codes, which estimates disaster preparedness on the basis of factors like poverty and transportation access; and data on hospitalizations and other case metrics from Palantir’s covid surveillance system, HHS Protect. They can also enter and view their own data to see where vaccination clinics and ultra-cold freezers are located, how many doses different sites have requested, and where vaccines have already gone.

Once states decide how many doses of each vaccine they want to send to each site, they download a file with addresses and dose numbers. They upload it into VTrckS, which transmits it to the CDC, which sends it to manufacturers.

A Pfizer shipment

PFIZER

Last week, Palantir rolled out a new “marketplace exchange” feature, effectively giving states the option to barter vaccines. Since the feds divvy up both Moderna and Pfizer vaccines without regard to how many ultra-cold freezers states have, rural states may need to trade their Pfizer allotment for another state’s Moderna shots, Maddox says.

When thinking about the utility of the system, it’s worth noting that many health departments have a shallow bench of tech-savvy employees who can easily navigate data-heavy systems.

“It’s a rare person who knows technology and the health side,” says Craig Newman, who researches health system interoperability at the Altarum Institute. “Now you throw in large-scale epidemiology…it’s really hard to see the entire thing from A to Z.”

Step four: Manufacturers ship the vaccines

Somehow, shipping millions of vaccines to 64 different jurisdictions at -70 °C is the easy part.

The CDC sends states’ orders to Pfizer and to Moderna’s distribution partner McKesson. Pfizer ships orders directly to sites by FedEx and UPS; Moderna’s vaccines go first to McKesson hubs, which then hand them off to FedEx and UPS for shipping.

Tracking information is sent to Tiberius for every shipment so HHS can keep tabs on how deliveries are going.

Step five: Local pharmacies and clinics administer the vaccine

At this point, things really start to break down. 

With little federal guidance or money, jurisdictions are struggling with even the most basic requirements of mass immunization, including scheduling and keeping track of who’s been vaccinated.

Getting people into the clinic may intuitively seem easy, but it’s been a nightmare almost everywhere. Many hospital-based clinics are using their own systems; county and state clinics are using any number of public and private options, including Salesforce and Eventbrite. Online systems have become a huge stumbling block, especially for elderly people. Whenever jurisdictions set up hot lines for the technologically unsavvy, their call centers are immediately overwhelmed. 

Even within states, different vaccination sites are all piecing together their own hodgepodge solutions. To record who’s getting vaccines, many states have retrofitted existing systems for tracking children’s immunizations. Agencies managing those systems were already stretched thin trying to piece together messy data sources.

FedEx and UPS trucks depart from Pfizer.

PFIZER

It may not even be clear who’s in charge of allocating doses. Maddox described incidents when state officials contacted HHS to say their caps were too low in VTrckS, only to realize that someone else within their office had transferred doses to a federal program that distributes vaccines to long-term care homes, without telling other decision makers.

“Operation Warp Speed was an incredible effort to bring the vaccine to market quickly,” and get it to all 50 states, says Hana Schank, the director of strategy for public interest technology at the think tank New America. “All of that was done beautifully.” But, she says, the program paid little attention to how the vaccines would actually get to people.

Many doctors, frustrated by the rollout, agree with that sentiment. 

“How much money was put into the science of making the vaccine? How much money is being put into the distribution?” says Courtney Rowe, a pediatrician in Connecticut who’s been volunteering at her hospital’s vaccination clinic. “It doesn’t matter that you made it if you can’t distribute it.”

Theoretically, when patients do manage to get a shot, clinicians are supposed to log information about the appointment and send it to their jurisdiction’s immunization registry. Those registries are aggregated in a different federal system called the CDC Clearinghouse, which is supposed to de-identify the records and forward the data to yet another federal system, called the IZ Data Lake, according to Maddox. This software then feeds it back into Tiberius.

States and feds both use those numbers to track what proportion of vaccines received are actually being administered.

There are a couple of reasons not to trust that data. One is that states, and even individual vaccination sites, have widely varying rules around reporting vaccination data to the jurisdiction’s registry. Clinic workers in multiple states have found the new requirements so onerous they’ve started writing all the vaccination records on paper and entering them into the computer by hand when they have free time.

“There’s just a lot of manual stuff, so then you get a delay in the data,” said Brendan Babb, the chief innovation officer of Anchorage, Alaska, during a January 25 press call with New America. “As much as that can be glued together, it’ll free time up for people and you’ll get more real-time data of where vaccines are at.”

Where do we go from here?

While much criticism has been directed to federal tech systems during the rollout, it seems they are in fact largely working. Maddox says without Tiberius, things could get far worse. “We would have to fall back on very old-fashioned ways,” he says. “We would need a lot more people, and we would need access to systems that would take us some time to recover from, and it would not be integrated.”

Experts say the bigger challenge, however, was Trump’s decision to leave vaccine administration to the states. This put significant strain on local governments, which are often understaffed, have limited technical capabilities, and must deal with outdated tech systems.

During the New America press call, several speakers emphasized that the federal government needs to take greater initiative to do things like supply states with better technology options.

Latanya Sweeney, a professor of government and technology at Harvard University, said Biden could set up a federal tech team to create better appointment scheduling software and provide it to states as an easily accessible alternative. This would not only help states save resources but offer a better user experience for those trying to book appointments, especially elderly people and immigrants.

“There are rumors that the United States Digital Service might take this on … so there is hope,” says Schank. “National coordination will be a game-changer.”

Patient receives Covid-19 vaccine shot.

STEVEN CORNFIELD/UNSPLASH

Some steps are being taken in the right direction. December’s stimulus package included $9 billion to help state vaccine campaigns. HHS also recently announced $20 million will go to modernizing immunization registries, though it’s a fraction of the $500 million state public health officials estimate they will need to update aging, often non-interoperable systems. (Many systems can’t talk to each other, and often rely on employees to compensate for incompatible medical record systems. Some still accept records by fax.)

Biden’s covid plan says the administration will work with the CDC and states to “bolster” state IT systems and improve data transparency for vaccination efforts across the board, though they have yet to release a budget.

The most recent federal stimulus bill allocated over $100 billion to help jurisdictions’ vaccination campaigns, and Biden’s plan includes an additional $350 billion. And while the vaccine has always been free for jurisdictions, the rest of the bill has been on states and vaccination sites. Biden’s plan argues the federal government should pay for it all.

All of this presents an opportunity to fix a fundamental part of our safety net, one that’s been ignored for decades, according to Newman of the Altarum Institute. 

“It’s really important that public health has stable resources,” he says. “They can make long term plans and not worry–nine months from now, is this going to drop off everyone’s radar? Is the funding going to evaporate?”

The bottom line, says Schank, is that Operation Warp Speed met its own goal. Now that part is over, she says, “so somebody has to pick that up.”

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Gillmor Gang: Win Win

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Just finished a Twitter Spaces session. It is an engaging platform, somewhat clunky in feature set but easily a tie overall with Clubhouse. I don’t see this as a horse race, however, more as cooperating teams fleshing out a platform where both will be major players. Like notifications in iOS and Android, the feature set is a push and pull motion where Android delivers deep functionality and Apple alternately pulls ahead and consolidates gains. Though the details can vary, the combined energy of effectively 100 percent of the consumer base mandates best practices and opportunities for innovation.

Something similar is going on in Washington as the Democrats test out their majority of none on the pandemic stimulus bill. The headline in the Times says bipartisanship is dead, but the subheading is the real story. The battle for control of the Senate is closing in on the arcane gerrymandering of the filibuster, or what passes for it after Republican whittling of the original talk ’til you drop croaking of Jimmy Stewart as in Mr. Smith Goes to Washington.

The telltale giveaway is Senator Lindsay Graham, who complains bitterly that the Democrats are steamrolling the COVID Rescue Bill without Republican votes “because they can.” The actual bipartisanship is between the progressives and moderates in the Democratic Party, as the Senator from West Virginia moderates one aspect of the bill to gain the prize of something the President can sign. Not only does it establish Biden’s power to govern but it also provides a roadmap for justifying the necessity of altering the filibuster equation.

Notice how Biden changed the subject from bipartisan negotiations to the power play it turned into. He used the polls to squeeze the Republican moderates where they fear most, the primary battles for control of the House in the midterms. The wave of vaccines are making it almost impossible to put up a political firewall; the anti-mask mandates seem like clueless floundering as people begin to have hope of an exit from the gridlock of partisan obstructionism. It will be hard to run on a platform of denial and death as we reach the end of May.

Governing by success undercuts the argument that government doesn’t work. Breaking the back of the filibuster requires the framing of the issue as finding a way to let government keep working in a bipartisan way. That brings us back to changing the definition of bipartisan as evidenced in the technology arena. In the Apple/Android example, two viable entities bring different strengths to insuring the ability to survive long enough to govern. Google’s lock on the network effect in advertising and “free” services may be challenged by Apple’s focus on privacy and a hardware revenue base, but the net effect is to cancel each other’s vulnerabilities due to the market force of their positions. The bipartisan finesse is that each platform has the other as a dominant customer.

In the same vein, Twitter v. Clubhouse is really not the point. Certainly we can cherrypick the battle as startup v. incumbent: Clubhouse filled with unicorn celebrities and rockstar investors and a builtin tension with the media, Twitter protectively fast following with its natural social graph advantages and struggling with scalability and the fear they’ve sown of abandoning projects before they can thrive. The question begged: what is the nature of the bipartisan compromise that will ensure both end up winners?

The answer is how to make each player the best customer of the other. Twitter’s problem is focus, and harnessing the power of users to hack the system to both theirs and the company’s advantage. The @mention spawned the retweet, providing the analytics that drive Twitter’s indelible social graph. Instagram may be Facebook’s best attempt so far at challenging the fundamental strategic value that the former president used to dominate, but Clubhouse promises to go one big step better with its hybrid of mainstream media and a Warholesque factory engine that creates new stars and the media they generate. This in turn migrates through the entertainment disruption led by the streaming realignment. What exactly is this NFT thing really about?

So Clubhouse has to open up its ability to multitask with Twitter and other curated social graphs. Facebook as a source for Clubhouse notifications and suggested conversations is different than Twitter’s But patching into the sharing icon on iOS will offer substantial access to blunt Twitter’s native integration in Spaces. On the flip side, Twitter’s Revue newsletter tools present an opportunity to mine the burgeoning newsletter surge, using its drag and drop tools to bring not just default social network citations but the implicit social graph of curated editorial rockstars. Not only is the influencer audience rich in signal for advertisers, but these same brands will prove most attractive to Clubhouse listeners looking for value. Win win.

from the Gillmor Gang Newsletter

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The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary and Steve Gillmor. Recorded live Friday, March 5, 2021.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

Subscribe to the new Gillmor Gang Newsletter and join the backchannel here on Telegram.

The Gillmor Gang on Facebook … and here’s our sister show G3 on Facebook.

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The iMac Pro is being discontinued

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Chalk this up to inevitability. The iMac Pro is soon to be no more. First noted by 9to5Mac, TechCrunch has since confirmed with Apple that the company will stop selling the all-in-one once the current stock is depleted.

One configuration of the desktop is still available through Apple’s site, listed as “While Supplies Last” and priced at $5,000. Some other versions can also still be found from third-party retailers, as well, if you’re so inclined.

The space gray version of the popular system was initially introduced in 2017, ahead of the company’s long-awaited revamp of the Mac Pro. Matthew called it a “love letter to developers” at the time, though that particular letter seems to have run its course.

Since then, Apple has revamped the standard iMac, focusing the 27-inch model at those same users. The company notes that the model is currently the most popular iMac among professional users. The system has essentially made the Pro mostly redundant, prefiguring its sunsetting. Of course, there’s also the new Mac Pro at the high end of Apple’s offerings.

And let us not forget that the Apple silicon-powered iMacs should be on the way, as well. Thus far the company has revamped the MacBook, MacBook Air and Mac Mini with its proprietary chips. New versions of the 21.5-inch and 27-inch desktop are rumored for arrival later this year, sporting a long-awaited redesign to boot.

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Investors still love software more than life

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Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

Despite some recent market volatility, the valuations that software companies have generally been able to command in recent quarters have been impressive. On Friday, we took a look into why that was the case, and where the valuations could be a bit more bubbly than others. Per a report written by few Battery Ventures investors, it stands to reason that the middle of the SaaS market could be where valuation inflation is at its peak.

Something to keep in mind if your startup’s growth rate is ticking lower. But today, instead of being an enormous bummer and making you worry, I have come with some historically notable data to show you how good modern software startups and their larger brethren have it today.

In case you are not 100% infatuated with tables, let me save you some time. In the upper right we can see that SaaS companies today that are growing at less than 10% yearly are trading for an average of 6.9x their next 12 months’ revenue.

Back in 2011, SaaS companies that were growing at 40% or more were trading at 6.0x their next 12 month’s revenue. Climate change, but for software valuations.

One more note from my chat with Battery. Its investor Brandon Gleklen riffed with The Exchange on the definition of ARR and its nuances in the modern market. As more SaaS companies swap traditional software-as-a-service pricing for its consumption-based equivalent, he declined to quibble on definitions of ARR, instead arguing that all that matters in software revenues is whether they are being retained and growing over the long term. This brings us to our next topic.

Consumption v. SaaS pricing

I’ve taken a number of earnings calls in the last few weeks with public software companies. One theme that’s come up time and again has been consumption pricing versus more traditional SaaS pricing. There is some data showing that consumption-priced software companies are trading at higher multiples than traditionally priced software companies, thanks to better-than-average retention numbers.

But there is more to the story than just that. Chatting with Fastly CEO Joshua Bixby after his company’s earnings report, we picked up an interesting and important market distinction between where consumption may be more attractive and where it may not be. Per Bixby, Fastly is seeing larger customers prefer consumption-based pricing because they can afford variability and prefer to have their bills tied more closely to revenue. Smaller customers, however, Bixby said, prefer SaaS billing because it has rock-solid predictability.

I brought the argument to Open View Partners Kyle Poyar, a venture denizen who has been writing on this topic for TechCrunch in recent weeks. He noted that in some cases the opposite can be true, that variably priced offerings can appeal to smaller companies because their developers can often test the product without making a large commitment.

So, perhaps we’re seeing the software market favoring SaaS pricing among smaller customers when they are certain of their need, and choosing consumption pricing when they want to experiment first. And larger companies, when their spend is tied to equivalent revenue changes, bias toward consumption pricing as well.

Evolution in SaaS pricing will be slow, and never complete. But folks really are thinking about it. Appian CEO Matt Calkins has a general pricing thesis that price should “hover” under value delivered. Asked about the consumption-versus-SaaS topic, he was a bit coy, but did note that he was not “entirely happy” with how pricing is executed today. He wants pricing that is a “better proxy for customer value,” though he declined to share much more.

If you aren’t thinking about this conversation and you run a startup, what’s up with that? More to come on this topic, including notes from an interview with the CEO of BigCommerce, who is betting on SaaS over the more consumption-driven Shopify.

Next Insurance, and its changing market

Next Insurance bought another company this week. This time it was AP Intego, which will bring integration into various payroll providers for the digital-first SMB insurance provider. Next Insurance should be familiar because TechCrunch has written about its growth a few times. The company doubled its premium run rate to $200 million in 2020, for example.

The AP Intego deal brings $185.1 million of active premium to Next Insurance, which means that the neo-insurance provider has grown sharply thus far in 2021, even without counting its organic expansion. But while the Next Insurance deal and the impending Hippo SPAC are neat notes from a hot private sector, insurtech has shed some of its public-market heat.

Stocks of public neo-insurance companies like Root, Lemonade and MetroMile have lost quite a lot of value in recent weeks. So, the exit landscape for companies like Next and Hippo — yet-private insurtech startups with lots of capital backing their rapid premium growth — is changing for the worse.

Hippo decided it will debut via a SPAC. But I doubt that Next Insurance will pursue a rapid ramp to the public markets until things smooth out. Not that it needs to go public quickly; it raised a quarter billion back in September of last year.

Various and Sundry

What else? Sisense, a $100 million ARR club member, hired a new CFO. So we expect them to go public inside the next four or five quarters.

And the following chart, which is via Deena Shakir of Lux Capital, via Nasdaq, via SPAC Alpha:

Alex

 

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