June 12, 2020
The Shutdowns Worked
Three months into the widespread shutdown of the global economy, there has been debate as to whether these drastic and dramatic steps have been necessary. The economic damage has been immense, with tens of millions unemployed in the US alone, and dramatic declines in economic activity.
Two new studies, done independently and using different methods, provide an answer. The shutdowns were extremely successful in suppressing the virus and sparing millions from severe and often fatal illness. In the US alone, 60 million infections were prevented, 5 million of those would have been serious cases with roughly 600,000 deaths. In fact, the death toll would have been even higher, because with those numbers the healthcare system would have fallen apart, and large numbers of patients would have died that a functioning system with enough capacity would have saved. Over the last three months, about 150,000 Americans have died from COVID-19, and likely about 15 million got infected, so the shutdowns cut the disease burden by 80%.
Looking across the world, the studies found dramatic changes in Europe and Asia too. 285 million cases in China were prevented, likely sparing 3 million or more from dying, and in Europe, the estimates are that 3 million deaths were averted, including 500,000 in the UK alone.
It turns out that even without an effective treatment or vaccine, our understanding of viral transmission allowed us to stop a massive epidemic. With the virus suppressed in most advanced nations, countries are starting to reopen their businesses and workplaces and schools. One interesting finding in these studies is that closing schools did not play a big role, suggesting allowing children to attend school is probably not going to reignite an epidemic. We now need to move to a strategy that keeps the virus suppressed while allowing us to return to as much of a normal life as possible. The key elements to do that are public mask-wearing, maintaining social distancing in public spaces, widespread testing and contact tracing to allow us to quarantine infected and exposed people, and avoiding large public gatherings. Sporting events and cruises will stay shuttered. Travel and tourism are going to be minimal. But airplane travel, with a mask, is reasonably safe at this point. Outdoor risk appears minimal, unless there is a lot of crowding and shouting or singing occurring.
A number of countries have been able to get the active number of cases down to a minimum. This is true in East Asia and New Zealand, but is also now true in Spain and Italy, two countries that were initially devastated. Unfortunately, the US has been a laggard. The viral suppression strategy here has been haphazard and piecemeal, run at the state level. The Federal government has failed to provide national guidance and leadership. Some states have been very aggressive, while others have been lax. Caseloads in the US remain much higher than in Europe with much higher rates of new infections. While the US has avoided a catastrophe, it is still suffering 500 deaths or more per day. We will likely see a low grade persistent burden of virus for the next several months.
One other ray of hope is that medical treatment for this virus is improving. An effective antiviral drug, remdesivir, has become widely available at most major hospitals, and ample supplies should be available by August. Convalescent plasma is another treatment option that is available, though its effectiveness is uncertain and more research is needed. We have also learned a lot about the role of steroids and of blood-thinners in improving outcomes. Hopefully, the mortality rate can be pushed down from 1% to less than 0.5% with these interventions.
In crass dollars and cents terms, have the shutdowns been worth the cost of lost economic activity? That is hard to answer, because what is the value of a human life? While every life is precious, it does turn out the government has long put a dollar value on lifesaving interventions. How much can we spend on road improvement per life saved, or on a new pollution regulation or workplace regulation? The US government uses a benchmark figure of about 10 million dollars as a reasonable amount to invest to save a life. If the shutdowns prevented 500,000 deaths so far in the US, that would be worth about 5 trillion dollars, or about 25% of GDP. In actual fact, the shutdowns this year will likely cost about 10% of GDP in lost economic activity, much of that will show up as additions to the national debt, as the government is spending money to keep households and companies financially afloat. One could argue that in this case, the value of a life is less than 10 million, as many of the deaths are in older people, but on the other hand, an unchecked epidemic would have overwhelmed the system and resulted in an even higher death toll. On balance, the shutdowns have been worth it, both medically and financially.
The goal now is to keep the virus suppressed for another 6-9 months and hope by then we have a vaccine. With a vaccine we can finally get out from under this and return to normal. That is something we are all looking forward to.
