The Flu Normal

Dr Eric Crampton
28 February, 2020

It took a little while after the Christchurch earthquakes to wrap our heads around that a lot of the city would never be as it was. We had to adjust to the new normal.

Covid-19 (coronavirus) is almost certainly already in New Zealand and likely has been quietly circulating, presenting as a mild flu. One in twenty cases, or thereabouts, turn out to be very serious. Once those cases appear at hospitals, the patient’s contacts will be tracked down and tested, and New Zealand’s numbers will quickly jump from one to a dozen, to a couple of dozen.

The government has said little about what happens after that.

Existing influenza pandemic plans have provisions for school closures, social distancing recommendations and more stringent measures. The pandemic plan allows for strict controls on domestic travel, including forbidding travel from affected regions to unaffected regions and detention of those attempting to leave.

We could quickly face some surprises. It would be nice if the government were a bit more forthcoming about its plans for handling all this. If those kinds of measures were under potential consideration, knowing it earlier would give people and businesses a chance to prepare.

But I also worry we may be thinking about this outbreak as a one-off when it could instead be a new normal. The best response will surely depend on which of these scenarios is true.

Imagine that Covid-19 is a one-off. Those who’d catch it would be immune forever, the vaccine under development will be deployed broadly by the middle of next year, and if we just hunker down for a while we could all take a really big economic hit – but eventually it would be over.

In that situation, strict quarantines, school closures and even internal travel restrictions might make sense. The costs would be borne once, but the benefits of protecting people from the virus would extend over a long period. Temporary quarantine clinics for those with milder cases could be established. Elective surgery could be delayed until the crisis had passed as the hospitals in affected areas would be overwhelmed and staff may need to rotate in from other regions to help share the load.

If about 5% of cases wind up in the Intensive Care Unit, Wellington Hospital’s 29 ICU beds would serve only Covid-19 cases if 600 people in the region caught it. And remember, Italy went from 16 confirmed cases in Lombardy on 21 February, to 60 cases the next day, to 400 cases on the 26th.

The costs in the short term would be severe. In addition to the obvious difficulties facing the health system and the human tragedy of deaths and severe illness, tourism would collapse, regions dependent on tourism will falter, businesses would struggle with loss of staff when schools are closed along with loss of access to critical materials and affected universities would likely demand hefty bailouts.

But the threat would pass. The country could wear the short-term costs because the benefits would be substantial. If 2% of those catching the disease die and if every adult is susceptible, preventing it from spreading everywhere has enormous value.

For every million people protected against catching Covid-19, twenty thousand lives would be saved. And if you will forgive an economist for being gauche enough to put a dollar value on that, that’s about $87 billion, using standard New Zealand figures. Proper accounting would reduce the figure somewhat because of the age profile of those most affected by Covid-19, but even very costly measures can be justified on that kind of accounting.

This would change if Covid-19 instead is the flu normal. This week, James Hamblin warned in The Atlantic that epidemiologists are starting to see it as a fifth “endemic” coronavirus. Just as we have cold and flu seasons now, we could have a Covid-19 season. Future waves would likely be less fatal, as those most susceptible would tragically have died in earlier waves. But it would mean that measures taken this year would need to be repeated again, and again, and again.

And people who had been reported cleared of infection in Japan are catching it again; we don’t yet know what that means for the feasibility of vaccines.

Measures that would make a lot of sense if they are seen as saving twenty thousand lives full-stop would perhaps make less sense if they save twenty thousand lives for a year, and then need to be repeated. If Hamblin is right about the flu normal, the response might need to be different.

Rather than gearing up for an intense attempt at containment and setting temporary measures to help hospitals deal with the rush, the government would need to be thinking about the permanently higher need for beds in intensive care.

And it is difficult to tell just what the Ministry of Health and Cabinet are thinking about all of this. Hopefully we will learn more when the first case is announced.

Get ready. And let’s hope this isn’t the flu normal.


Dr Eric Crampton is Chief Economist with The New Zealand Initiative

Stay in the loop: Subscribe to updates