The lack of US preparedness for the coronavirus pandemic has been shameful and unnerving. On the policy side, it started with Trump ignoring plans given to him during his transition in 2016 for upgrading the US stockpile of PPE (personal protective equipment) and hospital ventilators. He then went on in 2018 to disband the National Security Council’s pandemic preparedness unit, and when the pandemic actually did arrive, he finally ignored the CDC’s Pandemic Contingency Plan (https://www.cdc.gov/flu/pandemic-resources/planning-preparedness/national-strategy-planning.html ). He also cut the CDC’s annual budget from $12 Billion in 2018 to a requested $6.6 Billion in 2020. There are no excuses for any of this from the strongest country in the world.
On the “hardware” side, the US has failed miserably, and at the cost of lives, to ensure an adequate supply of PPE, ventilators, and testing. There are no excuses for this from the richest country in the world.
What is the cost of preparedness? We might answer this in retrospect to see how we squandered our good fortune, while we must answer this prospectively to ensure it never happens again. The question is a bit difficult to answer, however, since we don’t know what the next pandemic will be (e.g., respiratory or something else), nor do we know how many people will be affected. We can get a sense of it, however, by making a few assumptions. First, assume the next pandemic could be either respiratory or something else, such as blood trauma, digestive-, or organ-attacking. Second, assume it will affect about 10% of the population, 30 million people. For comparison, as of mid-April 2020, 85 days after the first US case, the coronavirus has affected about 1 million people in the US, considering documented and possible undocumented, asymptomatic cases.
What will we need? The list below is for the things we need now along with an estimate of their cost (probably overestimated costs if better discounts can be gained by bulk-buying):
- N95 masks – $0.15 each
- Surgical gowns – $2 each (real ones, not NY Yankees rain ponchos)
- Ventilators – $17,000 each
- Tamiflu (a placeholder for antiviral therapy) – $50 for a 5-day course
- Testing – For the current coronavirus, this number is all over the place because it depends on test type (genome vs serology), contains many elements (swab kits, lab costs, sampler costs, machine costs, other equipment costs, etc.), and it is evolving in chaos. Medicare reimburses labs $36 for the genome test. Abbot Labs serology test kits (not the machine itself) cost $88 each. The internet tells you genome tests “can cost” $100 each, and serology (e.g., antibody) tests can cost $10 each. To consider preparedness, assume 2 types of costs for more involved testing for the virus itself (e.g., genome)– infrastructure (e.g., machines, etc.) and unit (e.g., sampling kits), and a single unit cost for simpler, antibody serology tests performed “at home” similar to pregnancy testing. For preparedness consideration, assume a $100 million research program will refine 2 types of test kits: genome, $50 each when refined and serology, $1 each along with a general (because it is currently undefinable) infrastructure cost of $5/person (might include machines, nose swabs, etc.)
Let’s add it up, so far. For 30 million sick people, the total cost for the above items would be $8.2 billion, assuming the following:
- Each person is sick for 20 days and needs 1 medical caregiver with a new gown and mask each day (likely and underestimate).
- 250,000 new ventilators bought for stockpiling
- Antiviral treatment stockpiling for half the sick (15 million people)
- Testing equipment/kits after $100 million of research for testing 10% of the population once with the genomic test ($50) and 5 times with the serology test ($1) along with that $5/person of general testing infrastructure cost.
Now let’s think about that $8.2 billion. Gowns and masks are likely underestimated by an order of magnitude if each sick person needs to be visited several times a day by caregivers and each caregiver deserves new PPE each time, but the units might not be as expensive as assumed when buying in such bulk, and every sick person might not be hospitalized for 20 days. Furthermore, we might need to stockpile less than 250,000 new ventilators, but we might need to stockpile other equipment in case the next pandemic is not respiratory. Finally, even though the testing bill, above, is a large estimate of $1.9 billion, this number could be low. At least it’s a decent placeholder. It assumes that 10% of the population will need to be tested and retested as a matter of diagnosis and infection control with trace-testing being an additional cost, but not a “stockpilable” cost.
To put this $8.2 billion in perspective, it is 0.04% of GDP, perhaps 0.1% of the wealth lost in the stockmarket (that number keeps changing), 0.4% of the recent federal bailout, the cost of 50 F22 Raptor fighter jets, and 1% of the US defense budget. As a margin of safety, let’s round it to $10 billion. Is it worth it?