Back-of-the-envelope low-quality musings: #takes

Longform stuff I've put time and thought into is at #effortposts.

To hear from academics and policymakers, #interviews.

Compiled scribbles on what I read can be found in #notes.

Topic-related tags include #economics, #coronavirus and #miscellaneous.

# The Medical Side of the Recovery

02 May 2020

Towards the end of March, I wrote about the immediate economic circumstances caused by COVID-19 - where we stood and what we needed to do. Much of this short-run work has been done by fiscal leaders and central bankers. What isn’t yet clear in the United Staes and the United Kingdom is the medium-run - how we envision our exit strategy from the medical side of the crisis. In the USA, significant number of states have begun reopening, with Florida, South Carolina and Georgia all opening up parks and beaches. A similar pushback towards the lockdown has begun appearing across the UK - even though public health experts and epidemiologists broadly agree that testing needs to be increased by a significant order of magnitude before that can occur. With the new coronavirus testing blueprint from the Trump administration offering little beyond calling on states to develop their own plans, what are the options available?

It is worth remembering that in the long-run, the only solution is herd immunity. Not in the rather cavalier sense the Johnson ministry seemed to support, but because the end goal is a world where a large enough proportion of the population is immune. Without that, multiple subsequent outbreaks are likely to occur. The best way to achieve said immunity is by the mass production of a vaccine. Insofar as it is impossible to guarantee this will occur, the alternative is to achieve this immunity naturally before the vaccine arrives (if it does arrive).

As such, the question is whether in the meantime, we’d like everyone to continue living as if nothing were wrong (thus leading to the overloading of the healthcare system and the deaths of many) or we’d rather everyone to engage in a indefinite lockdown (with great socio-economic cost). To be clear, the actual policy choice is not one of these two - instead it is finding somewhere in between. This sort of plan is crucial, because the comparative of no policy interventions could result in between 160 to 214 million people being infected in the USA, with as many as 1.7 million people dying (based on a CDC estimate).

Any feasible solution must therefore involve several stages. The first is widespread and unmitigated social distancing - this is required to flatten the curve because staying outside is too dangerous and could overload the healthcare system. This time should be spent building up healthcare capacity and ramping up investment in the R&D of a vaccine. The second is easing social distancing measures, while putting into place surveillance and contact tracing alongside social distancing for more vulnerable populations and restricting large gatherings. This selective isolation should be such that the improved healthcare system can manage the flow of patients. The third is the complete abolishment of social distancing when a vaccine has been sufficiently distributed or when herd immunity has been achieved otherwise.

Indeed, the four main plans proposed by the American Enterprise Institute, the Center for American Progress, the Safra Center for Ethics and Nobel Laureate Paul Romer all involve these three stages to some extent. Where they differ is in the second stage, with differing emphasis on using mobile surveillance, contact tracing and widespread testing. The AEI and CAP plans are most vanilla plans, following these three stages - although the CAP plan is more reliant on the use of a phone app to conduct contact tracing. The Safra plan has a particular emphasis on a national mobilisation, including a buildup of the healthcare workforce and the production of personal protection equipment. It also involves developing more digital infrastructure and elderly care capacity. The Romer plan stands out the most from the other three. Whereas the other three propose numbers between 750,000 tests a day to 3.8 million a day, Romer’s plan relies upon over 20 million tests a day. The idea is that testing everyone once or twice a fortnight would allow social distancing to be significantly lifted, since it would be possible to isolate the tiny fraction of the population that tested positive. All of these plans require a level of social distancing for quite a while, which is increasingly politically infeasible. Furthermore, they have significant practical obstacles in terms of building up medical, surveillance and testing capacity - not to mention the skepticism many may have for mass surveillance. These difficulties are especially the case for Romer’s plan, which he acknowledges will require scaling up testing to around 150 times the current capacity, a monumental task that is unlikely to occur in time.

Ultimately, it is unclear what a win-scenario looks like. All of these plans are difficult and imperfect. But if political capital is limited, the acceleration of testing capacity seems to be the best to pursue - as Romer observes, the $100 billion these tests might cost pale in comparison to the monthly losses in economic production of$350 billion. One could use the Defense Production Act and get a coordinated national system to improve tests and ramp up their production. Although the practical aspect of testing may appear difficult, Iceland has managed to test 10% of its population - and with the 3,000 counties in the USA being of a similar size to Iceland, providing funding to local leadership may be the most productive option. By combining new and improved test kits alongside serological tests that determine if people have immunity, we can get people back into society much quicker, speeding up the process of recovery.