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OPINION

The China coronavirus will test the US, too

By TYLER COWEN | Bloomberg Opinion | Published: January 28, 2020

As the Wuhan coronavirus spreads to America, it now seems quite possible the United States will face some considerable logistical challenges. Even if the virus turns out not to be very deadly, or mutates into a safer form, the public will not know that for some time. In the meantime, a mix of justifiable risk-aversion and perhaps panic will strain U.S. institutions. It is worth thinking through what some of the major problems might be.

First, most emergency rooms are not equipped to handle a very high volume of cases, especially infectious diseases. It is not just a lack of beds and medical personnel. Imagine an emergency room crowded with people who had fever symptoms, whether from the coronavirus or not. Then imagine you injure yourself in some other manner and require immediate medical attention. How comfortable would you feel waiting in that room?

The general economic problem is that emergency rooms typically are not equipped with full surge capacity, nor are there enough emergency room add-ons or substitutes available on very short notice. Usually when there is a shortage, economists recommend raising the price to equilibrate supply and demand. Doing so in this case would be prevented by a mix of hospital regulation, anti-price gouging laws, and the public’s views on what is fair in times of crisis. If the virus gains any purchase in the U.S. at all, medical-care shortages are likely.

The good news is that most hospitals and emergency rooms do have contingency plans for such occurrences. The bad news (looking forward, though it is good news looking backward) is that those plans are largely untested by recent experience.

Very often, when a pandemic breaks out, talk turns to macro remedies such as air travel bans and quarantines, as China is instituting. Yet often the more important factor is the strength, resilience and flexibility of local public health institutions, and those qualities cannot be created overnight. Just as the Chinese health care system is undergoing a major test right now, there is a good chance that the U.S. will too.

An additional test could concern child care and telecommuting. Will U.S. schools need to be shut? At the very least it is something officials should have been planning for. Even if schools are not closed, some number of parents will keep their children at home, whether out of rational fear or not. Anti-vaccine sentiment is fairly high and rising, after all, and even the wisest parents will prefer to be safe than sorry.

Keeping one’s children at home means that fewer people will go to work. Even those with external child care options, such as day care, may be reluctant to leave their children outside the home for the same reasons they fear the schools. The new question then becomes how robust are work plans, and U.S. supply chains, to a higher than usual rate of workplace absenteeism. There also may be an especially high level in China, which could strain U.S. and other supply chains relying on Chinese producers. Many businesses may need to amend their plans on the fly.

Once again, pandemic preparation is about the flexibility of decentralized institutions. These are not problems that can be solved by top-down planning. Instead, they rely on long-standing institutional capacities, high levels of social trust and improvisational skill.

If and when a good vaccine becomes available for the virus, that will again be about the improvisation and flexibility that will allow for scalability and eventual production and distribution. It is usually difficult to solve such problems quickly, but still there is better and worse performance — and that can make a big difference.

The very first problem the U.S. is likely to face is one of risk communication. Of course the correct message will depend on how the data evolve, but in general there is tension between warnings that get people to take notice, and those that scare them underground or into counterproductive forms of panic.

If you tell people how terrible things are, they feel a loss of control. Many will retreat into conspiracy theories, spread mistrust of health care institutions, or withdraw altogether from social or professional activity. Those who are sick may be afraid to seek medical attention, of having their movements constrained, driving the disease further underground and distorting the data. Again, trust is of paramount importance.

For all the talk about the U.S. having evolved into a more polarized, lower-trust society, I am optimistic about its on-the-ground capabilities on these issues. Yes, they fall short of ideal — but with any luck, we will never find out how far.

Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and the author of “Big Business: A Love Letter to an American Anti-Hero.”

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