States Experimenting – How Many Dollars Per COVID Death?

States Experimenting – How Many Dollars Per COVID Death?
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States Experimenting – How Many Dollars Per COVID Death? Risking a 200-Foot Sneeze, a Real 14-Foot Infection, and Inadequate Testing

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Q1 2020 hedge fund letters, conferences and more

WASHINGTON, D.C. (MAY 4, 2020) - Although many in the media are suggesting that we will soon learn whether or not the loosening of travel restrictions in almost three dozen states will result in more COVID-19 deaths, that's not the issue nor the answer experts are really seeking, although these life-and-death experiments will raise real questions which are even more important, says public interest law professor John Banzhaf.

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Loosing The Stay-At-Home Requirements

Virtually everyone, including those advocating for loosing the stay-at-home requirements, recognizes that reducing state restrictions will result in some increase in the spread of the coronavirus, and therefore a corresponding increase in the number of people with COVID-19 and the resulting deaths, because the virus is highly contagious.  Indeed, even if people do strictly maintain the recommended 6 feet of social distancing, the deadly virus will spread.

Despite conventional wisdom and medical advice that maintaining a separation of 6 feet is sufficient to prevent transmission of the coronavirus, reliable reports from a restaurant in China show that one infected diner was able - in a real life actual situation and not a model or projection - to transmit the virus, and the deadly COVID-19, to another diner some 4.5 meters [14.7 feet] away during the brief time it took to eat a meal.

Moreover, studies at MIT have shown that germs in a sneeze can travel some 200 feet, and another study suggests that a single passenger on an airplane with COVID-19 can infect more than a dozen other passengers several rows in front as well as behind him, despite the state-of-the-art HVAC systems on modern airplanes.

States Experimenting: How Much Will The Virus Spread?

The real question in these experiments in different states, says Banzhaf, is how much the virus will spread as each of separate restrictions is lifted or at least lessened, and in various states with different population densities and cultures.

Fortunately, our federal-state form of government should make it possible to obtain reasonably precise and granulated data on the effects quickly, says Banzhaf, who is also mathematician and game theorist, an engineer and inventor, a political scientist and public health activist, and a statistician and creator of the "Banzhaf Index."

Here the different states are able to act largely independently in their approach to the virus, in what Supreme Court Justice Louis Brandies called "Laboratories of Democracy," praising how under our federal-state form of government, a "state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country."

Any increase resulting from the changes in travel restrictions should show up quickly in hard reliable data, including the number of hospital admissions of confirmed COVID-19 cases, and the number of COVID-19 patients put on ventilators. Then we will probably see an increase in the number of COVID-19 deaths within a week or two; a lagging indicator because there is a lag in time between when COVID-19 patients first became infected, and when some of them die.

Handling COVID-19 Cases

Naturally we want to assure that the number of COVID-19 cases do not overwhelm the capacity of the local health care system to handle  the increased number of admissions - e.g., there should be enough isolation beds, ventilators, PPEs, etc. - and there must always be a margin or reserve since we never want hospitals to operate on the knife edge between just extremely busy and totally overwhelmed.

But, beyond that, what other limits are there, or should there be, on the increased number of COVID admissions and deaths resulting for a relaxation of a specific restriction?

As a counterbalancing factor, virtually everyone agrees the reducing the current severe restrictions on various activities will result in significant improvements in the local economy. Indeed, that's usually the major argument for taking these risks steps, since it arguably will let more people go back to work, have income, shop, enjoy services such as haircuts, pay bills, etc.

Fortunately, the amount of economic improvement, like the increase in medical problems, should also show up quickly in hard reliable data, including the number of people receiving unemployment compensation, sales tax and other revenue from businesses, etc., suggests Banzhaf.

But, assuming such data of medical harm and economic gain becomes available, and is generally accepted as reasonably reliable, how should governors weigh it in deciding how quickly, if at all, to relax restrictions?

Keeping The Virus Reproduction Rate Low

New York State Governor Andrew Cuomo has stressed the need to keep the virus reproduction rate below a certain target.  But experts seemingly agree that the actual rate at which the virus is spreading will not be known with any degree of accuracy until there is far more widespread testing - something which most agree is unlikely to happen, and to yield reliable data, for many weeks, if then.

So, in the meantime, suggests Banzhaf, governors and other decision makers will simply have to decide how many deaths they are willing to accept in return for how many dollars of increased economic activity - two metrics which should be known reliably within days of each change in restrictions.  In starkest terms, how many dollars for how many deaths.

If, for example, the number of new increased deaths is quite  low, society might be willing to accept these deaths as the unfortunate cost of increasing the economic benefit to many people.  But, if the number of new increased deaths is high, we would be less willing to accept the loosening of restrictions; i.e. the dollar v. death balance would have tipped the other way.

That, after all, is the concept behind cost-benefit analysis; a system of analysis used by virtually every federal agency in trying to decide thousands of different issues ranging from how much testing should be required before a drug may be put on the market to which city intersections should be selected for new traffic lights.

Balancing Lives Against Dollars

But balancing lives against dollars - how many deaths per dollar are we willing to tolerate - also involves issues of moral philosophy, as to which there can be few final answers since the issues are not amenable to the scientific method and the finding of measurable facts.

Such a balance may also be complicated by another consideration.  While all lives are precious, and no person should lose his life unnecessarily, many would agree that the adverse impact on society is far greater if a young and otherwise healthy breadwinner with children is killed by the virus than if it shortens the life by only a year or two of an elderly person with no dependents and various ailments who would likely have died within a few years anyway.

A classic way of taking some of this into consideration is to look at and compare not simply the number of increased deaths caused by a medical threat (e.g. AIDS, lung cancer from smoking, COVID-19) but rather at the years of estimated years of life lost to each.  By this measure, AIDS might be more serious compared with smoking than previously thought, because most who died from AIDS were young, and most who died from smoking-causes lung cancer tended to be much older.

So, in deciding whether or not to continue to relax restrictions, or possibly even reimpose some for a period of time, governors should be looking at deaths (with metrics including hospital admissions, ventilator use, and death certificates) balanced against dollars (unemployment claims, reported tax revenues, etc.), and perhaps the life expectancy of those who are killed by the virus (e.g. opening beaches is more likely to kill more young people, while opening beauty salons may tend to kill more older patrons). suggests Banzhaf.

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