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IBX's spit test processing facility in Oakdale, Minnesota. Photo: Glen Stubbe/Star Tribune via Getty Images

A new investigation is raising questions about Minnesota's COVID-19 testing program, the pricey contracts it awarded to private companies as the pandemic raged and how much of those costs will be passed on to taxpayers.

What's new: APM Reports dug through droves of public records and found that the state "relied on no-bid contracts for companies backed by private equity, regulatory shortcuts, and a complicated payment structure" to get the program off the ground.

Why it matters: The program was expensive, totaling $130 million so far, and the two private companies that secured most of that funding — Vault Health and IBX — faced no competition or public vetting before the contracts were inked.

  • The deals they struck with the state "will eventually pass tens of millions of dollars in testing costs on to the public, either through tax hikes or higher health insurance costs," APM notes.

Reality check: Widespread access to testing was essential to tracking the virus' spread and saving lives.

  • Many public health experts have lauded Minnesota's testing effort as an overall success, and a number of other states scrambled to expand capacity through similar avenues.

Yes, but: The emergency agreements made it difficult to track how much the companies are actually billing, especially to private insurers.

  • And a decision to skip federal authorization for IBX's spit tests means there isn't good public data about how accurate they are at identifying asymptomatic cases.

What they're saying: State officials and company representatives defended the contracts to APM, arguing that they allowed Minnesota to significantly increase its testing capacity at a crucial time.

  • They noted that the decisions were made as states rushed to launch mass testing programs without much federal coordination or support.

The other side: Republican state Sen. Michelle Benson, who has previously raised questions about the agreement, said the report "makes it clear that something needs to change about the way we as a State handle these types of contracts."

  • "We must take accusations of price-gouging very seriously because ultimately those excess costs will be shifted to consumers," she added.

The bottom line: Sixteen months later, and we still have no idea how much the testing really costs — or how accurate the spit tests are for asymptomatic carriers.

  • Costs, and stakes, could rise heading into the fall, as Delta and other variants threaten to drive a surge in cases.

Go deeper with the full investigation.

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Go deeper

Felix Salmon, author of Capital
Jul 21, 2021 - Economy & Business

Nasdaq gets serious about private-company share trading

Photo: Pablo Monsalve/VIEWpress via Getty

It's one of the biggest competitions out there: Who will be the go-to platform for buying and selling stock in private companies? A consortium of giant banks is now teaming up with Nasdaq to try to ensure that the answer is to be found on Wall Street, rather than in Silicon Valley.

Why it matters: No matter how many companies go public, the total valuation of private companies only ever seems to go up rather than down. Which means there's big money to be made in trading stakes in those companies.

Bezos beats Branson in space billionaires' battle for attention

Photo illustration: Aïda Amer/Axios. Photo: Imtiyaz Shaikh (Anadolu Agency), Drew Angerer/Getty Images

Jeff Bezos' flight into space generated more interest from the public than Richard Branson's, and both billionaires overshadowed their respective space companies.

Why it matters: Data shows an outsized public interest in the personalities at the center of the space trips, compared to the companies behind them — which could reinforce public suspicion that the ventures were partly vanity plays.

Updated 5 hours ago - Sports

Swimmer Chase Kalisz first American to win Olympics gold medal

Chase Kalisz of Team United States celebrates after winning the Men's 400m Individual Medley Final on day two of the Tokyo 2020 Olympic Games at Tokyo Aquatics Centre in Tokyo, Japan. Photo: Al Bello/Getty Images

Swimmer Chase Kalisz became on Sunday the first Team USA Olympian to win gold at the Tokyo Games.

The big picture: The Rio 2016 silver medalist's winning time in the men's 400 meters Individual Medley Final was 4 minutes 9.42 seconds. His teammate Jay Litherland took silver .86 seconds later.