Even though the mysterious respiratory virus that has hit China is in its early stages, it is leaving a mounting human and economic toll. Already, six people have died and 291 have been infected by the coronavirus in China, many of them health workers caring for the sick. And on Monday, the Centers for Disease Control and Prevention reported the first case in the United States.
The Centers for Disease Control and Prevention reported the first case in the United States.
The specter of a repeat of the deadly SARS outbreak in 2002 and 2003 in China spooked investors, with the Chinese markets plunging as news of the virus spread.
For the American health care system and its workers, the speed of the virus’s spread and the memories of previous epidemics are warning signs that they need to be prepared to contend with a potentially deadly outbreak at home.
Investors in China grew increasingly nervous as the virus spread
Source: Bloomberg
To gauge just how costly an outbreak can be, consider the Ebola virus that spread through West Africa from 2014 to 2016, taking more than 11,000 lives and infecting more than 15,000 in confirmed cases. The virus eventually jumped to the United States as well, with 11 confirmed deaths as hospitals scrambled to contain its spread.
Along with the human toll, the economic fallout was significant. The World Bank estimated the Ebola outbreak decreased the gross domestic product of Sierra Leone, Guinea and Liberia by $2.2 billion in 2015. This decline equated to an approximate 15% decrease in per capita GDP. A similar decrease in Chinese GDP would be far higher — topping $2 trillion — and would undoubtedly affect U.S. trade with China.
But the economic damage was not limited to Africa. U.S. hospitals spent more than $360 million preparing for possible domestic Ebola cases, according to one study, with those hospitals designated as frontline centers bearing a disproportionate share of the costs. Such designations were based on local Ebola cases and how many travelers – primarily U.S. health care workers and tourists – were returning from West Africa.
This time around, the potential ripple effect is far greater.
An epidemic in a country like China, where foreign citizens are more likely to travel to the U.S. for leisure, only magnifies the problem. In fact, according to the U.S. government in 2015, the height of the Ebola epidemic, more than 2.6 million tourists from China visited the United States compared to a little more than 500,000 from all of Africa. And West Africa represents approximately 2% of the total African population.
While this new coronavirus outbreak is in its early stages, it has already spread to South Korea, Japan, Thailand and, now, the United States. The Chinese New Year starts on January 25, which means time off and a lot of travel for Chinese nationals.
U.S. providers, especially those in areas frequented by travelers from China and other Southeast Asian nations, need to be financially and operationally prepared to respond.
