Cost Of Avian Flu? A Decade Of Growth

My philosophy regarding the avian flu virus is not too panic, but to be prepared. Whether it’s a H5N1 virus or some other yet unknown strain, the world is overdue for another pandemic. It’s the same as being prepared for other possible emergencies such as earthquakes. I don’t live in fear of them everyday, but I do know that they can happen (having grown up in the San Francisco Bat Area and been in Kobe when the devastating earthquake hit out here) and thus take basic precautions on the off chance that it does happen while I’m in the area.

Money magazine has a Flu doomsday scenario for the world economy article currently up on its site. Some highlights:

Estimating how many (people) another pandemic could kill is fraught with difficulty. Calculating an overall economic impact is even trickier, given the potential for panic and indirect costs from a hiatus in travel and trade…

“We cannot begin to quantify the potential damage in terms of gross domestic product, but a realistic scenario might be GDP declines in the tens of percent,” said Carnell. “In the case of slower growing economies such as Europe or Japan, a decade’s economic growth could be wiped out.”

Note that the quote says “realistic scenario” meaning that the 10% decline in economic growth wouldn’t be a worst case scenario.

But even these direct cost estimates — which look at income and production lost from loss of life as well as the cost of vaccines and health care in the United States — run at least as high as August’s devastating hurricane Katrina.

A 1999 paper from the Centers for Disease Control and Prevention in Atlanta estimated an economic impact of between $71.3 billion and $166.5 billion from U.S. deaths of up to 207,000 and hospitalization of up to 734,000, “excluding disruptions to commerce and society.”

“In considering what planning there would have to be for the next pandemic, we thought — and still do — that the 1968 scenario is adequate,” Martin Meltzer, co-author of the report and a senior health economist at the CDC, told Reuters.

These numbers are based on the 1968 flu pandemic in which approximately 1 million people died of the “swine flu,” but was the least devastating of the three pandemics that occurred in the last century. The 1958 flu pandemic killed 2 million and the 1918 outbreak killed 50 – 100 million.

The most interesting part of the article was that while loss of life and illness would cause economic decline, it is likely that the way people react will have the largest effect:

“Substantial loss of life would obviously lead to a decline in economic output but we believe fear of infection, leading to drastically altered behavior, would result in the greatest economic damage,” said Rob Carnell, economist at ING bank.

I guess I am more cautious and have been following this more closely because of a conversation I had with my best friend from college who is in the medical field. He says that lab tests have shown that the current H5N1 virus can mutate into one spread by human to human contact in less than 10 generations. That is enough for me to be prepared:

“Recent clinical, epidemiological and laboratory evidence suggests that the impact of a pandemic caused by the current H5N1 strain would be similar to that of the 1918-19 pandemic,” Michael Osterholm, director of the Center for Infectious Disease Research and Policy, said in a recent paper.

Disruption to trade and travel from efforts to contain the virus would be incalculable, he said, adding global, regional and national economies would come to “an abrupt halt.”

One big fear about the reemergence of a 1918-type flu strain is that it killed millions of people in the most productive age groups — the 20- to 40-year-old bracket — as opposed to just preying on the very old and very young.

The last part is the most troubling. I think there is an assumption that only the young, old and those with weak immune systems die in pandemics which is not true. My advice – don’t obsess on it, but keep an eye on what is happening through the news, just as you would if there was a hurricane out at sea that had the potential to head your way.

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