COVID-19: General Orientation

Emerging patterns

1. Immediate test and trace: S. E. Asia

Act immediately, even before there are cases, to test and trace, isolate carriers and introduce social distancing. The number of cases grows linearly and quickly peaks at a low level. The healthcare system can cope and there is then little if any disruption to society and the economy.

This was done with great rigour in Singapore and also in Hong Kong, Taiwan and South Korea and appears to have been successful. The key was early action based on good information.

However, as they had experienced other outbreaks like SARS, these countries were very well prepared, and this approach was not open to most others. Even if they had run simulations, as the UK has done, a pandemic seemed a remote possibility and not a lot was done.

2. Rapid lockdown: China

If carriers cannot be identified, the only alternative is to assume that everybody is a carrier and the only way to contain its spread is to introduce lockdown.

Because its authoritarian government initially chose to suppress the bad news China did not do so immediately cases were identified. This was only done in Wuhan on January 23rd and other major cities in China followed on January 24th, but then it was done rigorously and tightly enforced. Cases peaked after 12 days, and fell to zero by mid-March when economic activity slowly picked up. Chinese experience suggests that a rigorously enforced lockdown has to last for about 8 weeks.

3. Late lockdown: Europe

If that is not done rapidly and there is little or no testing, lockdown will eventually be introduced but only after a large but unknown number of people have been infecting an average of 2-3 others every time they contact them. That will lead to exponential growth in the number of cases, the healthcare system will be overwhelmed, and large numbers will die. To prevent that, society stops functioning and the economy grinds to a halt.

That is happening across Europe, with Italy in the lead, followed by Spain and France. The UK is now following, about 2 weeks behind Italy, so experience in Italy, Spain and France is the best leading indicator we have of the consequences. So far, the UK is tracking them fairly closely.

4. Herd immunity

This was the approach the UK was about to adopt when the Imperial College paper put an end to it. It was made public as a ‘mitigation’ option on March 13th, the paper appeared on the 16th and the government backed off.

The herd immunity approach is very controversial among scientists, but so is the Imperial College paper.

Sweden is the only country to be following this kind of approach, allowing the infection to spread among the young and healthy whilst protecting high risk groups. Swedish schools are still open. This makes the country an outlier, but events there should be followed for that reason.

The worst approach is to vacillate, doing nothing for a long time and then introducing very severe lockdown. That way you give the virus plenty of time to spread, leading to a high number of cases the healthcare system cannot cope with, and also cripple the economy.

The US may have followed this path. Denial persisted until recently, then there was a sudden swing. There has been almost no testing and the late reaction is driven by a blustering buffoon.

It currently seems likely that the entire US healthcare system will follow New York and be overwhelmed and the that US economy will suffer a disaster. How its deeply divided society will react remains to be seen, but the reaction is unlikely to be rational. Individual states are taking matters into their own hands, which might mitigate the scale of the disaster to come.

What is going on in Russia is unclear. It appears to still be in denial, but it may be following a deliberate ‘do nothing’ policy. It is possible that Putin wants to minimise the economic impact and is willing to take casualties to do so. Indifference to casualties would be consistent with how Russia has responded to other crises, such as the German invasion of 1941 or the French invasion of 1812.


Prospects for Europe

If China is the base case, we can expect social activity to be disrupted and the economy to be seized up for about 8 weeks. However, China reacted faster than Europe, and its measures were more rigorous. It therefore probably represents the optimistic scenario unless there is a policy change to accepting casualties in order to limit the social and economic damage.

Italian experience will be the first real indicator of what we can expect in Europe. As of today – lockdown +17 – the rate of increase in new cases has slowed. In Hubei the number of official new cases started to decline on lockdown +12. This suggests that containment will take longer in Italy than in Hubei. The Chinese intend to keep lockdown in place till April 9th, which is about ten weeks. Despite this, the Italian government is suggesting it will lift or at least loosen lockdown on April 3rd, which is less than four weeks after it was imposed. This is either a deliberate change in policy or wishful thinking.

Lockdown simply limits further spread. We have no idea what percentage of the population are already infected and without testing the only way we will find out is when people present with symptoms.

The later a country introduced lockdown, the more cases there will be. In Europe, Italy was first on 9th March and the UK brought up the rear on 23rd March. National death rates will be a function of the age structure of the population and ICU capacity as a percentage of severe cases. Unless ICU capacity grows as fast as the number of severe cases there will have to be some sort of triage. That will make healthcare services like battlefield hospitals.

Governments are facing a looming choice: to keep lockdown going and face economic disaster or to relax it and face more deaths. At some point economic contraction will itself lead to deaths, so the extent of contraction is one way of setting a limiting point for when lockdown will end.

In the UK, the government seems to be using NHS capacity as the decision criterion. The key bottlenecks are ventilator and ICU capacity. The longer lockdown lasts, the more can be produced and therefore the more patients can be handled when it is lifted. However, we cannot build new hospitals in the way the Chinese did. If, as is likely, the healthcare system cannot cope even with a ‘flattened curve’, (see below) lockdown might be partially lifted in order to keep society functioning. Politics usually involves compromise, so that could be the base scenario.


Key variables to track

How long lockdown lasts is probably dependent on:

Whether new cases peak after 12 days, as they did in China. Italy went into lockdown on 9th March. As of 25th March, which is lockdown +16, cases are still rising. This might suggest that the longer you wait the more the virus spreads (exponentially, meaning that every day of delay has an enormous effect), and therefore the longer it takes for cases to peak. In theory, actual infections will have reached their maximum at lockdown and as the virus can take up to 14 days to incubate peak new cases should peak at lockdown +14. If lockdown works 100% there should be no new cases after that, but in practice of course it does not completely stop infection. The shape of the downward trend in new cases after the peak is a measure of the effectiveness of lockdown. The less rigorous it is, the longer it will last;

Ventilator and ICU capacity, which means not just the equipment but the staff with the special skills to run it. This is rising fast but not exponentially. The UK has about 4,000 ICU’s of which about 3,400 are for adults, the rest being dedicated to natal care. Over 80% of these are normally occupied, leaving about 680 free. Current data suggests about 5% of cases need intensive care. As of 26th March the number of confirmed cases in the UK is just under 10,000. The actual number of cases is of course unknown, but much larger. The confirmed cases alone mean an additional 500 ICU’s are needed. That means that capacity is almost maxed out now. The implication is that the NHS will be overwhelmed next week and have to introduce triage.

The introduction of testing and tracing. Though it is probably too late for that to have much immediate effect in Europe and the US, if carried out at sufficient scale it offers an exit strategy – which reaction 3 currently lacks – as a way to lift lockdown.

The severity of the economic contraction, which might form a boundary condition for policy.


Key unknowns

Whether being infected gives immunity.

The effects of mutations and the emergence of a second wave, as happened in 1918.

The political and social effects of not being able to treat severe cases.


Action on the question of timing

The above is just background but understanding the context is important for orientation.

We must not waste time trying to second guess government policy or decide what the correct policy is (though this is very tempting).

We should however, set up a small group to create scenarios, focusing for now on determining the boundaries of the range of plausible futures. Everyone wants to know how long this will go on. Predicting that is impossible. Setting upper and lower limits is less challenging and we should start to do that.



Stephen Bungay, 26th March 2020

Director, Ashridge Strategic Management Centre

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