If only we knew . . .

Here are ten quotes and headlines from the past three months:

1. “[COVID-19] isn't something the American public need to worry about...It’s a very, very low risk to the United States...But it’s something that we as public health officials need to take very seriously... It isn’t something the American public needs to worry about or be frightened about. Because we have ways of preparing and screening of people coming in [from China]. And we have ways of responding - like we did with this one case in Seattle, Washington, who had traveled to China and brought back the infection.” -- Dr. Anthony Fauci, radio interview, Jan 26, 2020.
2. Who Says It’s Not Safe to Travel to China? - The coronavirus travel ban is unjust and doesn’t work anyway. -- Rosie Spinks, NY Times Op Ed, February 5, 2020.
3. U.S. Economy Added 225,000 Jobs in January - Robust payroll gain points to continued healthy labor market; jobless rate was 3.6%. -- Headline, Wall Street Journal, February 7, 2020.
4. "WHO says coronavirus death rate is 3.4% globally, higher than previously thought..."-- CNBC news headline, quoting WHO Director-General Tedros Adhanom Ghebreyesus, March 3, 2020.
5. “In total, in an unmitigated epidemic, we would predict approximately 510,000 deaths in GB and 2.2 million in the US, not accounting for the potential negative effects of health systems being overwhelmed on mortality.” -- Neil M. Ferguson, et al., Report of the Imperial College COVID Response Team, March 16, 2020.
6. “We're going to take it to the ultimate step which is we're going to close the valve. All right? Because the rate of increase in the number of cases portends a total overwhelming of our hospital system . . . “This is about saving lives and if everything we do saves just one life, I'll be happy.” -- NY Governor Andrew Cuomo, daily press briefing, March 20, 2020.
7. “We think it [the UK COIVD-19 death toll] could be anywhere between about 7,000 or so up to a little over 20,000.” -- Neil M. Ferguson, BBC interview, April 5, 2020.
8. “The Santa Clara team estimated an IFR for the county of 0.1–0.2%, which would equate to about 100 deaths in 48,000-82,000 infections. As of 10 April, the county's official death count was 50 people. The study's IFR is lower than the IFR used in models by researchers at Imperial College London, which estimated an IFR for Great Britain on the basis of data from China to be 0.9%. In another study, the same group estimated an IFR for China of 0.66%, and a study of deaths on the Diamond Princess cruise ship estimated an IFR of 0.5%.” -- Smriti Mallapaty, Antibody tests suggest that coronavirus infections vastly exceed official counts, Nature, April 17, 2020.
9. “Inflation-adjusted gross domestic product (real GDP) is expected to decline by about 12 percent during the second quarter, equivalent to a decline at an annual rate of 40 percent for that quarter.” -- US Congressional Budget Office, Projections of Output, Employment, and Interest Rates, April 24, 2020.
10. “We see an unemployment rate that approaches rates we saw during the Great Depression. During the Great Recession we lost 8.7 million jobs in the whole thing. Now we’re losing that many every 10 days, so the lift for economic policy makers is an extraordinary one. . . . [The coronavirus shutdown is] the biggest negative shock that our economy I think has ever seen.” -- Kevin Hassett, White House Economic Advisor, ABC television interview, April 26, 2020.

The purpose of rehearsing these items is not to disparage the opinions or competence of any of the actors in key roles of advice or authority over the course of this crisis. I suppose we could debate that for any individual, but for the purposes of my argument here, let’s stipulate the goodwill and competence of everyone who made the decisions that brought us to our current pass and those who advised them. 

Instead, my point is that we have had to make decisions (1) of massive importance, (2) extremely rapidly, and (3) with very limited knowledge of either the disease itself or the full consequences of the actions we might take to limit its spread. Our initial complacence is understandable. The SARS, MERS, and Ebola epidemics had been covered broadly, but each burned out well below the worst case scenarios feared at their outset, and none had any significant effect on public health or the economy in Europe or North America. It was not unreasonable to believe that COVID would follow a similar or only slightly worse pattern. 

Over the course of late February and early March, it became clear that COVID would be different. By mid-March, case counts were growing across Europe and the US. Then came the bombshell of the Imperial College report which projected an overwhelmed medical infrastructure and millions of fatalities in the west. The fear – perfectly justifiable at the time – was that an exponentially growing pandemic would tear through a large majority of a population with no natural immunity. The result – foreshadowed by the experience in northern Italy - would be hospitals choked with patients requiring extremely intensive medical care (including especially mechanical ventilation). Unable to cope with the volume, doctors (at least those not felled by the disease themselves) would have to ration care and choose who lived and died. Based on case fatality rates to date, perhaps 2-3% of those infected and maybe 1% of the general population might die. Faced with this prospect, policy makers made the decision to implement lockdowns to enforce social distancing. The concomitant shutdown of the global economy would certainly cause a deep recession and entail unforeseeable risk. But we might hope for a V-shaped recovery, and in any event, if the worst-case epidemiological scenario were to play out, then we would suffer both the death toll and an economic disaster. Information was still poor, but based on what we knew then, the balance of risks had shifted enough to justify the lockdowns.

For much of the last two months, the refrain of pundits and policy makers has been, “If only.” If only we had known that the communicability of the virus (i.e., R0) was so much greater than that of SARS, or MERS, or the common flu, then we might have appreciated the threat. If only we had known about the extent of the outbreak in China earlier, we might have implemented stricter travel bans sooner. If only we had known that the virus was primarily transmitted by presymptomatic or asymptomatic carriers, we would have ordered aggressive social distancing earlier. If only we had more developed testing and contact tracing capabilities, we might have gotten out ahead of the virus to minimize infections without needing to resort to lockdowns. If only we had larger stockpiles of PPE, we might have been able to encourage mask wearing by the general public and lessen community spread. If only . . .

It’s easy enough for commentators to find fault with the decisions that have been taken in the past. But it’s not at all productive. At a tremendous cost, we have bought some time and likely saved many lives with our response to the virus over the past several weeks.  We still don’t know as much as we would like, but we have learned quite a lot. Rather than rigidly cleave to the tactic of enforced lockdowns – a tactic that was justified in part by our then-current lack of knowledge – we need to take stock of what we have learned to develop the supple agility necessary to course correct based on the knowledge we have bought at so dear a price in lives and treasure. 

So, let’s take an inventory of our lessons from the lockdowns:

1.      Transmissibility: If anything, the disease is more communicable than we feared. In a few weeks, 25% of NYC residents where infected; on the Diamond Princess, a fifth of the passengers and crew were infected in ~10 days.

2.      Lethality: High infection rates in the hard-hit areas are actually good news. They mean that the disease is much less lethal than feared. Infection fatality rates (IFRs) are almost certainly less than 1% on average, and perhaps as low as 0.4% or even 0.1%. 

3.      Variability in danger of infection: The average IFR applies to almost no meaningful subset of the population. That is, the skew in the degree of danger is very high and predictable. For healthy people under age 50, COVID is rarely more serious than the flu, and children appear susceptible to symptomatic infection to only an infinitesimally small degree. Nearly all the deaths have been among elderly and those with comorbidities, and the vast majority of those killed by COVID have been both aged and infirm. To date, we have failed to protect the most vulnerable: at least 25% and probably more than 50% of those killed by COVID in the US and Europe have been residents of nursing homes.

4.      The promise of vaccines: There are a handful of human trials underway, and Oxford University is trialing a vaccine that they think might be ready sometime this fall. This is by no means certain, though, and the best-informed guess for the timing of a broadly available vaccine is 12-24 months. It’s a distinct possibility though, that we will not ever have a vaccine, or that the high transmissibility will mean that we achieve herd immunity via infection, rather than vaccination. Given that the best-case scenario still is too drawn out to remain in lockdown (or rolling lockdowns) until we have a vaccine, we are probably going to need a re-opening strategy that does not rely on vaccination. 

5.      The promise of therapeutics: It is more likely that effective therapeutics will be available than vaccines in the near term, though a silver-bullet cure is not in the offing. Early excitement about hydroxychloroquine has faded, but recent RCTs for remdesivir show some promise. A consensus that has formed about the role of ACE2 receptors as the gateway for the virus suggests potential paths for treatment. And plasma treatments are being tested as well.

6.      The medical learning curve: Even absent a miracle drug treatment, doctors are quickly learning about the disease. It is now clear that there are multiple phenotypes of COVID pneumonia, and that the more common variation does not require medical ventilation (in fact, it is likely counterproductive). Proning of patients has been found to raise blood oxygen and improve outcomes. Insights such as these will drive down the IFRs via improved clinical outcomes. They also lower the required intensity of medical treatment/intervention, which in turn increases the capacity of the medical infrastructure to handle a greater number of cases at any given moment. 

7.      Medical infrastructure: The medical infrastructure has proved remarkably resilient. In the wave of infections that recently peaked, New York City was able to withstand 25% infection rates without breaking the medical infrastructure, despite having just a few weeks’ notice to add capacity. Domestic production of PPE and ventilators is ramping up in almost every developed country, and many field hospitals and other emergency capacity has turned out not to have been necessary.

8.      Lockdowns and social distancing: Research from Oliver Wyman and elsewhere has demonstrated that transmission rates, high as they are, can be driven down by social distancing. They further show that that social distancing is happening both in jurisdictions where lockdowns have been severe and enforced (Spain and Italy, NY and Michigan) to those that have not mandated lockdowns (Sweden or South Dakota). In contrast, the evidence of the effectiveness of mandated and enforced lockdowns is much more mixed. Recent research seems to show that curve-flattening for infections and deaths is more likely to have been the result of voluntary changes in habits that preceded government lockdown orders, rather than by the lockdowns themselves. 

9.      The cost of lockdowns: If the epidemiological outcomes in the west’s first wave of infections has trended toward the best case scenarios from March and early April (excepting perhaps in Spain and northern Italy), the economic costs have crashed into the worst-case basement. The IMF predicts that 2020 will mark the worst economic downturn since the Great Depression, with negative growth for global GDP of -3%. With only half a month of lockdowns in the Q1 2020, US GDP shrank by nearly 5% on an annualized basis; the Congressional Budget Office predicts an annualized pull back of 40% for Q2. White House economic advisors are warning of unemployment at Great Depression levels, with lower-paid workers the most affected. The US budget deficit for 2020 is now projected to be $4.2TN. For perspective, total US federal outlays for 2019 were only (!) $4.45TN. Beyond the economics, the focus on COVID is crowding out other necessary medical treatments, including acute emergency care and testing and treatment for cancer, with an attendant human and economic cost. 

To Recap

We now know that we are facing a highly communicable disease that is extremely difficult to contain, at least in high-density population centers. It is highly dangerous to the old (especially 75+) and infirm (hypertension and obesity appear to be among the most dangerous comorbidities), but appears to be not at all dangerous to children (likely less than ordinary life perils) and not more dangerous than the flu to the healthy working-age population (under 60 or 65). The medical infrastructure has been shown to be able to cope with the sudden infection of 25% of the population of the US’s largest city without breaking, and improvements in the number of beds, treatment techniques, and therapeutics are increasing the effective capacity of the system by the week to withstand any further outbreak(s).  A vaccine will almost certainly not be available in 2020, and there is a chance it may never come (one never has for HIV/AIDS, despite decades of research and untold billions of investment). Voluntary social distancing likely does slow (but not stop) the spread of the virus, but the effect of enforced lockdowns and business closures is at best unclear. We do know that lockdowns have in six weeks wiped out more than 10 years of job growth, threatened a global depression, and inflicted nontrivial collateral damage to public health. 

In light of the above, ask yourself: If only we had known all of the above on March 15, do you think we would have chosen to institute massive blunt-instrument lockdowns of society and a shutdown of the global economy? 

Of course, we would not have. 

This is not to disparage the decision to implement lockdowns in the first place, or the leaders who made them. In the middle of March, we made decisions that could not be put off with the best information that we had at the time. Now we have more and better information, and it is time to change course, to reopen our economies,and to get our people back to work. We don’t need to be reckless in doing so, and even if government policy allowed for a free-for-all return to the pre-crisis status quo, private actors would be much more cautious. But we need to refocus our efforts away from scaring workers into their homes and toward encouraging them to come back to work. We can have a much greater impact on public health by focusing efforts (including social distancing measures) on the most vulnerable, with a special emphasis on the residents/patients and care givers in nursing homes and hospitals. 

The untold-trillion-dollar question is: Will we adjust our strategy in time to avoid permanent damage to our economy and society? 

My fear is that many of the policy makers who made the lockdown decisions in March have become invested in that strategy and are averse to the risk of being the first mover. It doesn’t help that the media that made daytime television celebrities of the governors who instituted lockdowns are currently portraying those who are reopening their economies as reckless and “anti-science”. [The latter criticism is especially ironic given that this is no historical precedent for lockdowns or scientific evidence of their effectiveness, and that the data that we do have appears to call into question the idea that they offer any net benefit.] Of course, there is risk in reopening, and there will certainly be a learning curve in that process, as there has been in the medical world. But rather than casting aspersions, we should be heralding the likes of Georgia and Texas as the brave expeditionary vanguard of our economic reopening. We will all benefit from their experience as we brave the necessarily risky path back to some semblance of economic normalcy.  

When I was a young partner at Oliver Wyman, the Chief Risk Officer of a major US financial institution said to me, “Experience is a hard teacher, because she gives the test first, and the lesson afterward.” We have just endured a very hard test indeed. Will we heed the lesson?

About this article

Like everyone, I am trying to make sense of the current situation. Since this started, I've been writing daily reflections to help myself and my colleagues make sense of an enormous amount of information and think beyond the day’s headlines. I now offer these thoughts to you in a series of articles aimed to provide perspective and help you navigate the rapidly evolving COVID-19 situation. I hope you find them useful and welcome your thoughts and comments. 

About me

Current President of Marsh Client Advisory Services. Former Oliver Wyman Partner. Avid writer and reader. Husband and father of three.