There is an undeniable and understandable rush to reopen economies. The coronavirus has taken a measurable toll on American life, with the human cost measured in the anguish of each victim’s family, and the economic cost measured in unemployment claims and the prospect of lower household income.
This has been an agonizing four months for employees and business owners who have lost their way of life. And there are so many unknowns regarding the virus and the unbearable risk of the loss of life that makes it nearly impossible to determine the appropriate timing and scope of reopening.
The seven-day moving average of cases is still on the rise, creating notable health risks around the reopening of the economy.
Excluding New York, the seven-day moving average of cases is still on the rise, creating notable health risks around the reopening of the economy. While daily positive cases of Covid-19 as a percentage of total daily tests continue to fall nationally, it is undeniable that decisions made in May will reverberate for years to come.
The vehement opposition by some to the economic lockdowns and social distancing requirements can be explained in part by what we know about the spread of the virus.
Two strains of the virus have attacked the United States. An Asian version landed in Washington State, causing the earliest infections and deaths. And the labs at Los Alamos have identified a second, more virulent strain that came out of Europe and landed in New York, causing the enormous outbreak there, with the spread of the virus now reaching outward toward the South and Midwest.
The experience of Washington State gives a blueprint for the rest of the states. There were single-digit identified cases by the first of March that rose to 100 cases per day by March 16 and to a peak of 500 cases per day by April 5, less than a month later.
Because there is no prior immunity to the virus, we can attribute the decline in new cases in Washington, to 150 per day by the end of April, only to the quick response of the government and public acceptance of social distancing.
But there has been a relapse, and new cases are now growing at a rate of 250 per day, which we would attribute not only to the relaxation of business lockdowns and social distancing, but also, and more important, to the spread of the virus outward from the original population centers.
New York’s outbreak began a few days after Washington’s, but because of the population density and some unfortunate gatherings, new cases were reported at a rate of 1,000 per day by March 20. That rate grew to a staggering 10,000 per day by April 11, although there is a strong likelihood of underestimation because of the capacity overload and the need to attend to patients rather than testing the hundreds of additional people who died at home each day.
New York at that point dominated the spread of the cases on a national level. So when the New York spread moved lower most days from mid-April to the present, thanks again to the acceptance of social distancing practices and the continued lockdown of non-essential business, the level of national cases moved lower as well.
(The response of New Yorkers is eerily similar to life after 9-11. Now, as then, commuters and residents have taken it upon themselves to help and respect our first responders and health care workers by staying home. It might be hyperbolic to say that no one in New York who has gone through this virus is promoting the early reopening of business or the abandonment of social distancing, but that’s what we’ll do. We ride the train and subways together and share the sidewalks with everyone. This is our city and this is our family.)
Infection in the rest of the states
The virus is now spreading from the population centers along the coasts to the states in the interior. As the figure below shows, the spread of the virus in all states excluding New York reached 1,000 per day on March 19. (That sum includes Washington State and hot spots in the New York metropolitan area that were directly a result of the original infections. But there are voices in those states that are just as eager to reopen as the governors of Georgia and Texas.)
The original spread in all other states is easily identifiable as exponential, with each infection spreading to multiple persons who, in turn, infect others. There was a plateauing of the growth rate from April 10 to 20, but the rate of cases gets pushed back higher with each meatpacking facility in its path.
The figure below compares the New York experience with social distancing with the rest of the states. Cases in New York and the rest of the states reached peaks on April 10. But instead of continuing to drop, cases in the rest of the states rose again and then plateaued. Cases in the rest of the states appear to be on an upward trend, however, as the virus moves from location to location.
A last point: Although Covid-19 deaths in New York were understated and then adjusted higher, the figure below shows similar increases in deaths in New York and the rest of the states until mid-April. While New York deaths are dropping, deaths in the rest of the states moved higher and have plateaued at best.
Concluding observations
There is reason to be optimistic. A group of young scientists at MIT have opened their patented findings to the entire scientific community in hopes of speeding the process for at-home testing. And the pharmaceutical industry is going all out to find a vaccine.
But that optimism should be laced with a dose of skepticism regarding the availability of a safe vaccine in the next few months, much less this month. As we’ve reported before, a more reasonable approach might be to isolate the segment of the population at greatest risk. This includes the immune-compromised community (e.g., diabetics) and older people in nursing homes and all those over 65 years old.
That would have to go along with a comprehensive testing program, allowing employees to return and remain at work only when they test negative at regular intervals.
The human cost of reopening without those safeguards far outweighs the cost to the economy of waiting for those safeguards to be implemented.
For more information on how the coronavirus is affecting midsize businesses, please visit the RSM Coronavirus Resource Center.
