Why we needs to rethink our approach to Coronavirus

Originally published: 3/23/2020

First off, some ground rules.

• This is not a professional article and therefore has not been professionally edited for spelling,  grammer, etc. I suck at these anyway, so forgive me if I make some mistakes throughout. 
• I am talking about the US only in this scenario, and assuming that all actions taken are to minimize the impact on the US as a country. 
• Please understand that these ideas are with the best intentions – we all want the same thing – to minimize the number of deaths and economic impact of coronavirus on the US.
• I’m open to having a conversation around any and all these ideas, and I’m open to changing my opinion. I’m not open to discourse with people who are not willing to listen or discuss civilly. 
• Please read the entire post if you wish to discuss, as reading only any one portion can cause a misunderstanding of my underlying point

I’ve heard many people complaining about the current situation of the world without presenting answers, or independent thoughts of their own. So here’s an attempt to communicate where I stand on the US response to the COVID-19 pandemic and some thoughts around an alternative approach. 

Also, I get it. I am not a medical expert, an economist or an epidemiologist. But that’s the problem I think – I’m hearing a lot of “let’s listen to the medical experts”. Correct! Agreed 100%. What I’m not hearing is “Let’s also listen to the economists” … Why not?? This is an existential threat potentially greater than the immediate effects of Coronavirus. We should be listening to medical experts when it comes to the medicine, for our personal health AND we should be listening to the economic experts when it comes to the economy. 

Again, I’m neither an economist nor a medical expert. I’ve simply been putting a decent amount of thought into the problem that we are currently facing with Coronavirus (as many people have), and thinking about it’s impact on the economy as well as the health of America. 

The situation I lay out here is simply where I’ve arrived based on the facts I’ve heard so far. I welcome feedback or challenges to any of my underlying assumptions, logic or anything else. If I’ve applied incorrect logic, mis-used an assumptions, or taken something out of context, please tell me. I’m trying to understand the best solution to this problem, same as everyone.

The Problem

It’s obvious that the threat of Coronavirus is real, despite the ongoing memes and jokes about it (for real tho, thank God for the memers savings us right now). It’s a threat to the lives of potentially millions of human beings all over the world, and at this point, we just need to stop the bleeding. That said, my POV as of now based on the following argument is that the way the US, and most of the world is handling this problem via blanket quarantine is overly simplistic in the medium to long term. We need a new solution to combat this thing if we want to not only minimize the number of deaths, but also maintain a strong economy and lower the very serious threat of the US weakening its position as a world superpower. 

The US (along with many other countries in the world) are taking a brute force approach to trying to slow the spread of coronavirus, which I actually believe was the right decision at the outset. In fact I think we waited far too long to take this approach and did not take the threat seriously. We needed (still need) to flatten the curve in the short run to allow for the healthcare system to build up the supply to treat the demand. So to be 100% clear. I am in full agreement with the actions taken by state governments to require quarantine and we should all be following them 100% by staying in our homes. Beyond the fact  that it was the right move to give us time to think of a longer term situation, we should follow the direction of the state governments in a time like this. If we don’t then the whole thing fails. Regardless of whether we agree with the policy or not, we should follow it given the circumstances and the risk of lives that are at hand.

My argument here is that we cannot sit in quarantine for weeks on end, with no end in sight while our economy is brought to its knees. While human lives are at stake, there is so much more at stake than just human lives – the consequences will have both economic and social implications for the country. 

The effects of total quarantine have already  been staggering. The stock market has already dropped drastically – the NASDAQ is down 30% since Feb 4th. The unemployment rate, currently at 3.5%, the lowest it’s been since 1969 is expected to rise rapidly, and is predicted it could increase to as much as 30%. 

Let me quickly run through the economics as I understand it. Probably missing a lot of key points here, but you’ll get the idea: 

Economic impact of Full Quarantine:

• Quarantine means that people cannot leave their houses and restaurants are shut down 
• Local stores, many of which who are operating on the margins, are forced to close, cutting off virtually all revenue for them
• Most local business cannot afford to pay their employees with no revenue coming in the door 
• People working at those businesses either 1) lose their job or 2) receive paid sick leave (*who will ultimately pay for this is another issue) 
• If #1, unemployment will rise and people will stop spending over the long term not just short term. This has huge long term effects for the US economy
• If #2, we still suffer in the short term because people aren’t spending the money they receive, and if they do, they are spending it online or at larger stores that can afford to stay open during this time. Also gov’t has to find this money somewhere – more on that below.
• For those businesses that can pay for medical leave (or receive govt aid), their margins drops, decreasing their ability to re-invest and grow
• Many businesses that cannot sustain $0 in revenue for months on end close indefinitely due to fixed costs being too high.
• The small business category as a whole suffer, competition drops → which causes product quality to suffer and prices to rise over the long term
• If the government steps in and provides aid, this is potentially okay in the short term – they can sell bonds or other treasury securities. However, this causes more problems.
• The first problem is that the government is already $23 Trillion in debt, the deficit is increasing, and borrowing is not free. 
• Second, if the government borrows money to provide aid the question comes, who do we borrow from? Well mostly like we will borrow from China, who already owns most of the US foreign debt in the country.  
• Third, the gov’t can only provide aid for so long before the bonds we are selling start looking unattractive to buy. After all, who wants to buy bonds in a country whose debt is increasing, and whose economy is tanking? I think a country who wants to surpass the US as the world’s most powerful economy would … yes, we know who. China gains leverage, buying American debt and further driving our reliance on them

Social Impact of Full Quarantine

We are social creatures, we need human interaction. While we can go without it for a set amount of time (2 weeks? 3 weeks? A month even? But we will not be able to go without it for an indefinite amount of time with no end in sight. Eventually, people will start interacting again, deciding that the risk of contracting coronavirus is less bad, than having to socially distance indefinitely. My guess is that people will start self organizing events in houses, private places, etc. Maybe business will just open back up. What’s the worst that could happen? Their business gets penalties? They will just declare bankruptcy, which will happen anyway if they stay closed. What if the government increases the penalty? Jail time. How many people can the government really arrest for opening their stores before it becomes unsustainable? 

We are either going to be quarantined indefinitely, people start driving themselves up a wall. At best they start gathering on their own after several weeks and at worst who knows, maybe they start committing suiside from the impact of isolation (I have no data to back this up, just a thought). Inevitably the virus will spread. Or, the government can step in with a plan and present a better way. One that is organized, that allows people to have their needed social interactions in a way that is coordinated, thought out and intentional. I will get to this later. 

Impact of doing nothing
Yes , people need social interaction, but we cannot do nothing. If we look at Itay as a worst case scenario (although there are reasons to believe that the US would not get as bad a Italy – There is a theory that the cultural tendency of Italians to live with family across generations, including older parents / grandparents, significantly accelerated cases and serious cases) it potentially could. In fact Italy has more hospital beds per capita than the US (as of 2017). The worst case scenario I see as probable is up to 1.4M deaths in the US, 80% of which will be people over the age of 65, and the majority of which have underlying health conditions. This assumes that 70% of the people in the US get Coronavirus, with a death rate of about 0.5%. If we assume 30% of people get the disease, we see closer to 500k deaths. For comparison, there are ~100,000 deaths from the flu in any given year.

Here is the model and quick note on this: Yes, I realize it’s overly simplistic. This is on purpose first so that everyone can easily understand the calculation. Second, because the underlying assumptions around death rates and infection rates are not accurate / full enough to back up a proper model due to lack of testing, and problem with averages (you can’t apply an average death rate in NY to Indiana because there will be different death rates due to hospital and equipment availability). And lastly because I don’t want to spend another 5 hours trying to build a model that is wrong like I did last week. It’s just better to talk in terms of ranges rather than building in 100s of assumptions that could be wrong, following Occam’s Razor principle. 

We do know however that 40 percent of patients sick enough to be hospitalized were aged 20 to 54. When you look at the actual report you see that only 29% were 20-44. By the way 20-44 is a 24 year age range. Ideally we need to see the breakdown in 5 year increments to understand whether the majority of those hospitalized are on the older end, say 38+, which I would guess is the case. 

In any case, it’s very very clear that the risk of dying was significantly higher in older people. Also it’s important to note that the overwhelming majority of people dying from coronavirus are over 80 years old. 

As a quick reminder the average life expectancy in the US is 78.9. That means that most of the people dying from Coronavirus are already over the average life expectancy, and probably did not have many more years to live. I’m not saying that these unexpected, horrific deaths are not tragic for the victims and their families, they are. But they are not any more tragic than a heart attack which kills about ˜650,000 Americans per year. My point is that our bodies break down, and become fragile and susceptible to disease and failure. For many victims, tragically, the virus was simply the straw that broke the camel’s back. 

What should we do?

Now that we understand  the implications of doing “everything” and doing “nothing”. Let’s think about the implications of our decisions. We are now being faced with the decision of whether the jobs, and livelihoods of 10s of millions of Americans and the future of the US as a player as a world power is worth losing to save the lives of 10s of thousands to several million citizens.

I’m not saying it is, I’m not saying it isn’t. I’m saying that we need to think about that tradeoff when discussing policy. I am also saying that most people are taking a short term, personal, and  simplistic approach to a systems problem that will have unintended consequences if we don’t take it seriously. Human beings are great at being empathetic to other human beings (no one wants to see grandma die), but we’re not great at understanding the broader implications of our actions within a system (i.e the US economy) and the downstream impact those actions will have.

My most realistic proposal would be something like the following. Yes, there are holes, yes there are things that still need to be worked through. And yes I’m sure there are things that I’m missing. But I’m also confident that the worst case scenario of a plan like this is less bad than the US economy going into a recession. Here it is:

My Proposal

Every citizen should self categorize into one of three groups. Group A are those who have low likelihood of hospitalization (and therefore low likelihood of death) if they contract the virus. Group B would be those with high likelihood of hospitalization / death. Group C consists of those people who otherwise would be in group A, but cannot live without interacting with Group B people. Ex: people who live with their grandparents or workers at care homes. 

The world is obviously not binary, and there would need to be a scale defined. There are people much smarter than me that could come up with this scale. But for instance and for the sake of visualization, maybe the scale is 1-10 where 1 = low likelihood of death and 10 means that you will almost certainly die if you become infected. Where you fall on the scale depends on a number of factors such as age, BMI (although I have my issues with BMI), underlying health conditions such as asthma, etc. Idk exactly will need to leave this one to the experts. 

What could the official direction from the government be for each? 

Group A: Low likelihood of needing hospitalization / death

• If you are not showing symptoms: Continue living as normal
• If you start showing symptoms (or test positive): Self quarantine until you presumably recover. There will be a portion of these people who will require hospitalization, but perhaps they don’t require respirators or ECU machines and hopefully the load on healthcare workers will be smaller. 

Group B: High likelihood of Hospitalization / death 

• 100% quarantine which implies the following: 
  • Not leaving the house for 30 days (or however long it takes to) 
  • Social Distancing if they do leave the house (can assign special indicator to wear on the person’s wrist or next to indicate to others that they should social distance)
• Will be assigned a government worker (as needed) to help assist: this will ideally be someone who has already contracted coronavirus and can no longer be a carrier (not sure if this is true – need to validate) or otherwise the worker will be required to wear protective gear at all times. 

Group C: Cases where a person would  otherwise be in group A but their circumstances require that they interact with a Group B person. 

• These people can choose one of two options: 
  • Same a group B: Total Self Quarantine (ex: if a relative wants to stay with a grandparent or a self care worker wants to keep doing their work)
    • We could establish extra monetary incentives (from fed govt) for workers whose jobs it is to work with people of Group B
  • Apply for gov’t stipend (ex: $500/month) to stay at temporary housing to ensure no interaction with Group C relatives or people during the quarantine (job allowing)
    • Not sure how paid sick leave would work here

Finally, perhaps there can be some infrastructural changes made to help lower the risk of Group B and Group C people getting infected. This could include

• Daily quarantine hours where everyone (no matter the group) must be in quarantine in order to allow group B and C people to get out and get some air. 
• Others? 

The basic idea behind this plan is that the Group A (healthy people) who are at low risk for hospitalization live as normal, continue spending at local bars, restaurants, businesses, etc. to allow these businesses to stay open. They might (probably will) get sick, but they will be required to self quarantine while they are showing symptoms and this group will quickly develop herd immunity. Some will of course require hospitalization, but the vast majority will not. 

Those who fall into group B or C will need to take measures that drastically change their lifestyles. This is not ideal for them and sacrifices will need to be made. But these measures are potentially life saving, a prize worth almost anything. 

Of course all the while we should simultaneously work to build up the healthcare system to support a spike in hospitalizations. 

Because people are awesome, there will be support groups that pop up for Group B and Group C people: Support via social networks, potential – I believe that people are extremely generous, and endlessly creative, and that with the proper leadership, the country can rally around these people and help support them. 

Of course, there are problems with this plan – the main risk being that some people who think they are healthy enough to be in Group A, actually are not actually in Group A. They become infected, and end up needing to be hospitalized, thus further overwhelming the healthcare system. We would need to control for that somehow (I have some thoughts on this that are too detailed to get into here – and for that reason might not work). But theoretically, this would be offset by the drop in Group B and C folks being exposed from the extremely strict quarantine regulations for them.

The economy will still take a hit as spending as a whole will naturally go down. Of course, people will die, as some Group B and C people will not be able to completely insulate themselves from the world. This again is tragic. However, I don’t have any reason to believe that more lives would be lost under this plan vs. what’s happening today. 

It’s not perfect, in fact it’s highly flawed, but a plan like this could help minimize the number of deaths while also minimizing the impact on the economy and help prevent a recession and the long term economic impact and power re-balance that I fear could happen. We just need to put brains smarter than mine behind this problem and come up with a solution that helps both the economy and the health of the American people.  

What do you think? Why would this work? Why wouldn’t it? 

Thanks for reading!