Tuesday, December 04, 2007

Pricing A Pandemic

 

# 1315

 

 

This week more than 600 delegates are attending an International bird flu conference in New Delhi.   We can expect a steady stream of news reports, mostly rehashing things we already knew, to come from this conference. 

 

Case in point, this article today in the The Straits Times.

 

If the headline of a 2 Trillion dollar cost to a pandemic sounds familiar, it's because the World Bank released that estimate more than a  year ago.

 

After the article, a few comments on the numbers used.


 

Bird flu pandemic could cost US$2b dollars: World Bank

 

NEW DELHI - THE global cost of a possible bird flu pandemic could be up to two trillion dollars (S$2.9 billion), a top World Bank official said on Tuesday.

 

The risk of a pandemic was still as great as it was two years ago despite improvements in the capacity of many countries to respond to the infection, a joint report by the United Nations and World Bank warned last week.

 

'The global economic costs could be between 1.5 to two trillion dollars,' Peter Harrold, acting Vice President of the World Bank told an international conference on avian flu in New Delhi.

 

International donors had pledged 2.3 billion dollars to help countries combat the threat, and more than one billion dollars had been allocated to other groups involved in the fight, Mr Harrold said.

 

More than 600 delegates from 105 countries are in New Delhi to discuss preparedness and challenges in fighting avian flu at the three-day conference, which began Saturday.

 

Virus mutation

Experts fear a virus mutation that could result in severe and easily transmitted influenza in humans could create the next pandemic, with far-reaching consequences.

 

'About 20 per cent of the global population will be affected during the next pandemic,' Margaret Chan, director general of the World Health Organisation, told the gathering.

 

Ms Chan said 28 million people may need medical care over a relatively short period and worker absenteeism could reach 35 per cent of the work force.

 

 

First, the incongruity in the headline. 

 

While the article references 2 Trillion dollars, the headline says $2B.  

 

A trillion isn't a trillion the world around.  Some nations use the short scale, where a trillion is a 1 followed by 12 zeros, while others use the long scale where a billion is a 1 followed by 12 zeros.   The editor who wrote the headline apparently prefers the long scale.

 

For clarity, this article states a pandemic could cost $2,000,000,000,000

 

Of course, what's missing from this article are the assumptions used to reach this number.   While stated as if it were writ in stone, this $2 trillion dollar estimate is actually based on a specific scenario.  What, more than a year ago, the World Bank felt was a `worst case scenario'

 

 

The assumptions used were outlined in an article carried by Channel NewsAsia back in September of 2006.

 

In the worst-case scenario of a flu pandemic, 70 million people - or 1 percent of those infected - could die from it.

 

And the World Bank says developing countries would be worse hit - with mortality rates being double that of high-income countries.

 

Jim Adams, Head, World Bank Avian Flu Taskforce, said, "We estimate that a severe pandemic could now cost over 3 percent of the global economy's GNP, because of its impact on trade and economic activity.

 

"We estimate this could cost, in fact, certainly over $1 trillion and perhaps as high as $2 trillion in the worst-case scenario. So I think the threat, the economic threat, remains real and remains substantial."

 

Now, 70 million deaths isn't everyone's idea of a worst-case scenario. 

 

Many reputable scientists have spoken of numbers several times higher.  If the 1918 Spanish Flu claimed 50 million lives, then based on population increases alone  it is reasonable to assume a similar event today would claim 150 million lives. 

 

Double the `worst-case' assumption state above.  

 

So I would have to assume the cost would go up correspondingly.

 

 

 

I find the numbers from Ms. Chan equally suspect.  She states that 20% of the world's population could be affected, and 28 million could require medical care in a pandemic.

 

The operative word in both these statements is `could'. 

 

It also could be a lot higher.   Particularly the 28 million needing medical care.   That number makes little sense to me, and I wonder if it isn't taken out of context. 

 

To get to 28 million needing medical care you'd have to assume 20% of the world is stricken (1.3 billion people) and of those, just over 2% would need medical care.  

 

Now, if she meant that out of 1.3 billion people stricken, only 28 million are likely to receive medical care.  I might believe that one.

 

Of course, you hold an international conference, you have to give numbers.  People expect that, and need some sort of idea of costs and effects so they can do their own planning.   But when you see them, you always need to look for that pesky asterisk. 

 

The one that points to the assumptions used, and the inevitable disclaimers, usually buried deep at the end of a report.