By: The Avalon Health Economics Team
March 13, 2020
Within a few months we’ve gone from worrying about holiday shopping to worrying about global pandemics and watching the world shut down around us. It started with news from China on the rapid spread of an insidious virus initially called a coronavirus. Once the virus was better understood it became known as COVID-19. The disease that began through animal-to-person contact (initially originating from bats) broke out in Wuhan, Hubei Province, China before spreading to at least 82 other countries . According to the Center for Disease Control (CDC), there have been 125,048 confirmed cases and 4,613 deaths worldwide since the primary outbreak of the disease . The spread has been faster than expected– initial logistic and SIR epidemiological models of the virus estimated the number of cases to reach approximately 85,000 cases. However, an updated analysis estimated over 2 million cases before the predicted mid-March demise of the disease . Meanwhile, the attending physician of Congress and the U.S. Supreme Court, Dr. Brian Monahan, said to expect 70 to 100 million COVID-19 infections in the United States, and rate of diagnosis continues to grow .
 According to the U.S. CDC, “Coronaviruses are named for the crown-like spikes on their surface. There are four main sub-groupings of coronaviruses, known as alpha, beta, gamma, and delta. Human coronaviruses were first identified in the mid-1960s. The seven coronaviruses that can infect people are: 229E (alpha coronavirus), NL63 (alpha coronavirus), OC43 (beta coronavirus), HKU1 (beta coronavirus). Other human coronaviruses include MERS-CoV (the beta coronavirus that causes Middle East Respiratory Syndrome, or MERS), SARS-CoV (the beta coronavirus that causes severe acute respiratory syndrome, or SARS), and SARS-CoV-2 (the novel coronavirus that causes coronavirus disease 2019, or COVID-19). People around the world commonly get infected with human coronaviruses 229E, NL63, OC43, and HKU1. Sometimes coronaviruses that infect animals can evolve and make people sick and become a new human coronavirus. Three recent examples of this are 2019-nCoV, SARS-CoV, and MERS-CoV.”  These counts were gathered from the CDC Situation Report 52 posted on March 12th.
The sudden and rapid spread of the coronavirus in combination with recent viral outbreaks, such as Ebola and Zika, have made researchers keenly aware of the need for, and value in, modeling. Infectious disease modeler Caitlyn Rivers says, “modeling plays a really important role in understanding how an outbreak is unfolding, where it might be going, and what we should be thinking through.” Utilization of technological advances has also been suggested to prevent any delays in research and data gathering at the onset of a new infectious disease and give the public access to infection information. Mathematical computational epidemiologist Sara Del Valle has supported the creation of a global center to constantly collect and release information about circulating infections illnesses.
Currently, in terms of infectious disease there is somewhat of a global shift from disease prevention to instead favoring “containing and curing.” The World Health Organization (WHO) has shipped supplies to 57 countries and has received pledges of approximately $300 million to its Strategic Preparedness and Response Plan from various countries . Italy alone has set aside €25 billion ($28.6 billion) to combat the disease. The entire country has been put on lockdown: schools have closed, public events have been banned, and any open restaurants are operating on limited hours .
In the United States, at the time of this writing, there have been 1,629 confirmed Coronavirus cases, with 41 associated deaths. The subsequent societal impact has been monumental. A panic reflecting those seen in Italy and China has prompted numerous preventative measures, ranging from avoiding handshakes to postponing major events like sporting events, conferences, and even Coachella. The NCAA has banned fans from attending games for the rest of the tournament. The NBA has put a hold on the season until further notice.
 These counts were last updated at 12 PM on March 13th. Although COVID-19 appears to be substantially less lethal in the healthy, non-elderly population (the death rate for patients aged 80+ is approximately 22%, compared to <1% for patients under 40) , the average mortality rate of 3.4% presents a much greater concern than normal seasonal flu (which leads to death in less than 1% of patients). The high threat of disease outbreak is due primarily to the rapid transmission of disease (it is substantially more contagious than normal seasonal flu) coupled with the fact that coronaviruses can remain infectious on inanimate surfaces at room temperature for up to 9 days.
Although the containment of the disease remains the primary focus of health agencies, it is impossible to ignore the likely impact of the disease on the global economy, which some economists estimate to be in excess of $2.7 trillion. There are numerous drivers of this economic impact, including (but not limited to) things like productivity slowdowns (sick employees; team separations from work-from home—e.g., Google’s 100,000 U.S. employees were recently banned from offices), quarantines, supply chain disruptions, travel restrictions, and cancellations of large events (sporting events, conferences, etc.) Moreover, the individual burden on patients can be massive, especially among lower-skilled factory workers and hospitality industry workers, many of whom in the U.S. are under-insured or uninsured. Uninsured patients may pay up to $1,000 to be tested for COVID-19, and a positive diagnosis can lead to a costly $75,000, 10-day hospital stay. About one quarter of working Americans do not receive sick leave, while approximately 28 million non-elderly Americans were uninsured in 2018. Further, the impact on the at-risk elderly population can be staggering as many retirees rely on their investment portfolios for income. The federal government has dedicated $8.3 billion dollars for coronavirus spending, and stated that possible relief through payroll tax cuts or paid sick leave will soon be enacted. Meanwhile, individual companies are taking action; Uber and Lyft will compensate affected drivers for up to 2 weeks, while Postmates and DoorDash are enabling no-contact food delivery to lessen the decline in orders from fear of contact.
Although the global and U.S. economy will surely take a hit, there is also a good chance that coronavirus “runs its course” by the start of the summer, and countries can begin resuming normal social and economic activity. For stronger economies, recovery is likely to be fairly rapid. The duration will depend largely on the effectiveness of state and local containment efforts, which in China and South Korea have been remarkably effective, but in the U.S. and Italy much less so.
In the meantime, how concerned should we be about COVID-19? As we’ve stated above, COVID-19 is substantially more contagious and substantially more lethal than the seasonal flu that most of us have suffered through in the past. Making matters worse, it appears to be able to survive on surfaces for longer periods of time. This a dangerous mix of characteristics that make the containment efforts probably worth it. Keep in mind that even the most fast-tracked clinical trials will delay a vaccine for another 9 months to a year, and by then it will have likely run its course. In the meantime, it is wise to take the threat seriously and stick to the CDC recommended actions, which include washing hands, covering your coughs, avoiding touching your mouth, nose and eyes, disinfect surfaces at home and work, and avoid contact with sick people. And don’t rely on politicians for your news updates—for reasons that are difficult to understand there is already a lot of misinformation circulating. Check for updates from the CDC and the WHO. Our staff even recommends doing some travel bargain hunting (for future trips, once the air clears) from the comfort of your quarantine bed.
 For example, the S&P 500 fund is down 19% as of 3/9/2020 from its recent high.
New Jersey declares state of emergency as coronavirus cases surged in tri-state area, Italy extends its quarantine to the entire country. Health and Science, 2020.