Only saving lives will save livelihoods
The right way to understand pandemic economics
By Rajeev Cherukupalli and Tom Frieden
THE novel coronavirus has spread widely around the world, overwhelming health-care systems and killing hundreds of thousands of people. But fatigue with stay-at-home orders and the consequences of a sudden freeze in economic activity have brought diminished focus on the human cost of the disease. Even worse, impatience has reinforced a widespread misconception: that saving fewer lives will be worth it if economic activity is restored quickly. Pandemic economics doesn’t work that way, and neither can pandemic response. Only action that places people’s health at its center will enable an economic recovery.
Individuals’ perceptions of safety will drive consumer and business decisions in the coming months. If governments fail to save lives, people afraid of the virus will not resume shopping, traveling, or dining out. This will hinder economic recovery, lockdown or no lockdown. Accordingly, only investing in strategies that protect health will allow the economy to rebound; holding back on such spending will mean more outbreaks, more lives lost, and protracted economic suffering.
In the United States, consumer spending—the biggest driver of economic growth—fell even before most states mandated lockdowns, and it is nowhere near normal even in partially reopened states.
Sweden’s lighter approach to a lockdown has not prevented its economy from shrinking and appears to be associated with higher death rates. China’s recovery will depend on revived domestic and global demand. Countries and states that have reopened before meeting the threshold of consistent declines in infections risk new outbreaks, higher death rates, and prolonged economic disruption.
Public finance tradeoffs typically involve competing priorities and limited resources—guns or butter, hospitals or highways. But it would be a mistake to apply that framework to confronting the Covid-19 pandemic, because governments face a fundamentally different choice.
Saving lives is instrumental to restoring economic activity, not opposed to it.
Saving lives will require massive government investment in improving public health and health-care systems to meet both immediate and future needs. The goal must be to control spread of the virus, protect health workers, and create surge capacity at health facilities—while keeping non-Covid-19 health care going. Primary care, such as vaccination, treatment of chronic diseases, and the routine lifesaving procedures and treatments that keep a population healthy, can wait for only so long. The focus should not be simply reducing avoidable deaths from Covid-19 but preventing as many deaths as possible, Covid-19 or not, which will mean preserving or even enhancing non-Covid-19 care
When Covid-19 is spreading widely, disruptive but essential stay-at-home practices are the only way to tamp down explosive growth. Lockdowns are a blunt but effective instrument. They can end, allowing people to emerge safely, only when four essential practices are in place: widespread testing, isolation of those infected, contact tracing, and quarantine of those contacts.
These four practices (a strategy that Resolve to Save Lives calls “Box It In”) depend on substantial investments of both financial and human resources. In the United States, ramping up testing (at least 400 000 tests a day are needed just for the highest-priority groups) and other interventions will cost billions of dollars. And putting in place a thorough contact-tracing system could entail employing and training at least 100 000 and as many as 300 000 people. Shoe-leather contact tracing is expensive, time-consuming, and labor-intensive, since it requires working quickly and building trust while respecting privacy.
But it is necessary to control the spread of the virus. (Many governments in low-income countries perform contact tracing routinely.)
Lockdowns can end only when four essential practices are in place: widespread testing, isolation of those infected, contact tracing, and quarantine of those contacts
Meanwhile, isolating patients who are infected and quarantining those who have come into contact with them will require significant additional investment. Isolating patients, in order to prevent spread in hospitals and health centers (as well as nursing homes, homeless shelters, and correctional facilities, which have some of the highest infection and fatality rates), requires redesigned facilities and health-care practices and adequate supplies of protective equipment. Municipal and state authorities may also have to use facilities such as hotels and motels to separate and shelter people who are ill or exposed and cannot be cared for and isolated safely in their current locations. Countries that have already invested in such temporary facilities, including Germany and South Korea, have saved lives and avoided the worst economic effects of the pandemic.
Ultimately, nothing will allow people to get back to a pre-Covid-19 normal except a vaccine. Governments and private companies must invest in testing and distributing a vaccine as soon as possible, recognising that even once a vaccine is developed, getting it to all who need it will be a massive undertaking.
Treatments will also help, possibly substantially, and should be available sooner. But they are unlikely to be the game-changer that a safe and effective vaccine would be.
Along with the billions in outlays for a comprehensive Covid-19 response in the coming months, considerable additional investment will be necessary to reduce the risk of future pandemics. In the immediacy of pandemic response, it is easy to link actions to measurable consequences: sourcing more tests and protective equipment eases pressure on hospitals and reduces deaths, robust contact tracing reduces spread. But soon, governments will be tempted, as they are in normal circumstances, to underspend on health in the absence of such readily apparent consequences—one reason that investment in pandemic prevention has languished even as global trade and travel have grown.
CUSHIONING THE SHOCK
Efforts to slow and stop the spread of Covid-19 are necessarily disruptive and expensive, because they directly affect whether and how people can work. Governments need to invest in policies that reduce transmission, such as paid sick leave, and that help people retain or gain access to health care. But they also need to invest in policies that help cushion the economic shock, such as expanded unemployment insurance (more than 33 million Americans have filed initial unemployment claims since March), wage top-ups (for example, Canada plans to supplement the wages of frontline workers), and programmes that allow companies to retain workers. Such social protections are needed not only for the sake of economic relief in the face of a system wide shock but also for containing the pandemic: if people infected with the virus and their contacts can stay home without economic hardship, countries will be more likely to slow transmission and prevent their economies from crashing further.
Getting people back to work requires acknowledging that some people will remain too vulnerable to return to jobs that entail health risks and can’t be done remotely. Accordingly, governments might need to expand income support and provide broader disability insurance. This would reduce the risk of severe illness in the most vulnerable—especially low-income, immigrant, and minority communities, who have been hit the hardest by Covid-19—and thereby allow economic activities to continue.
There is a long and diverse list of jobs deemed essential that entail a high Covid-19 risk: not only healthcare workers but also bus drivers and meatpacking, warehouse, and grocery-store workers have little option but to continue to show up. Production lines in many industries—not just meatpacking, the subject of recent extensive outbreaks—involve physical proximity to other workers. Those who do return to these jobs need much better protection: frequent disinfection, new partitions, mandated hand sanitiser, increased physical distancing, keeping small groups of workers together as cohorts while excluding infected workers, and rapid recognition and investigation to stop outbreaks from spreading.
Such protection will work, however, only if employers receive and implement clear, evidence-based, authoritative guidance. Improving industry safety should be treated as a public good—one that requires effective oversight by federal and state governments. Without enforcement, individual businesses will be tempted to free-ride, with tragic results: if any one employer cuts corners to save money, infection can spread and undermine confidence in an entire industry (whether meatpacking plants or hotels). Private businesses have an interest in ensuring safety in order to prevent industry-wide shutdowns, but they cannot rely on self-policing. Government can help ensure public confidence the way it does with food safety: it imposes standards that reduce risk, and industry in turn finds cost-effective ways to meet those standards. Private businesses and government thus collaborate to reduce the cost of keeping everyone safe.
THE PRICE TAG
Finding practical, scalable ways to both protect people and persuade them to change personal behavior for the good of the community is the stock-in-trade of public health. In the current pandemic, despite some initial missteps, governments have by and large succeeded in persuading people to put the collective good above their own—whether by staying home or by wearing masks in public.
When public attention and energy are focused on a clear enemy, it’s relatively easy to convince governments to invest in public health measures, since they clearly reduce the death toll and speed recovery. The larger challenge going forward will be to persuade governments to fund programs that make the next pandemic less likely. In the United States, that calls for a substantial increase in funding for both domestic and global public health (and insulating that funding from shortsighted cuts in the future). The long-term lesson of Covid-19 should be clear: if governments don’t massively increase their investment in global health security, they will imperil both lives and livelihoods in the future.
Although the cost of both mitigating this pandemic and preventing the next one may seem steep, the price tag is an error of its economic benefit—a matter of spending billions to save trillions. Governments now face both human and economic costs unlike any faced for decades, and they will be judged on both—how many deaths they prevent and how completely they restore their economies. Taking half measures to control the pandemic and rushing to reopen too soon (and without regard to workplace safety) will increase the damage in terms of both lives and livelihoods. Leaders must recognise that what’s good for public health is also good for business.