By: Jessica Johnson
In addition to the tragic loss of life, the costs of health care treatment and prevention of disease outbreaks costs the global economy billions. For example, the Zika virus cost an estimated $3.5 billion, severe acute respiratory syndrome (SARS) cost an estimated $40 billion, and HIV/AIDS costs an estimated $563 billion.[1] Like previous public health emergencies, the coronavirus is already showing signs of these devastating collateral harms, which can make employees too sick to work, interrupt business operations, shrivel tourism revenues, disrupt markets, increase health care expenditures, and threaten the stability of governments.[2] Given the significant social and financial implications of public health emergencies, the public and private sectors must grapple not only with promoting public safety but also with how to finance and maintain economic stability.
What is the Coronavirus?
The coronavirus was first identified in the 1960s in humans.[3] Now there are seven known strains.[4] Four of the strains cause relatively benign symptoms similar to the “common cold,” such as mild fever, runny nose, cough, or headache.[5] Two strains — SARS and Middle East respiratory syndrome (MERS) — may cause severe illness and death.[6] The seventh strain of coronavirus was just discovered in Wuhan, China in December of 2019.[7] Symptoms resemble other coronavirus strains, causing “mild to severe respiratory illness with fever, cough, and difficulty breathing.”[8] As of February 9, 2020, there have been over 37,000 confirmed cases, with the majority occurring in China.[9] Of these 37,000 confirmed cases, over 800 people have died thus far.[10] The U.S. Centers of Disease Control and Prevention (CDC) predict that cases, and potentially the death toll, will continue to rise.[11]
Financial Impact of Public Health Emergencies
Given the devastation of many disease outbreaks, the CDC declared “[t]here is perhaps no greater investment toward protecting our physical, social, and economic wellbeing than global health security.”[12] Since the coronavirus outbreak, China’s socioeconomic wellbeing has gravely suffered. Chinese officials canceled many cities’ Lunar New Year celebration, which is the country’s largest holiday.[13] This celebration was expected to bring over 3 million travelers and generate $74.4 billion for the economy.[14] Instead of generating vast tourism revenue, China’s central bank spent $173 million dollars as a precautionary measure “to cushion the shock to financial markets from the outbreak of a new [corona]virus.”[15] Nevertheless, China’s stock market still plummeted 9.1% when markets reopened following the Lunar holiday shutdown.[16] Even with the central bank’s bailout, this was the market’s worst opening in 13 years.[17]
The negative impact on China’s economy has impacted U.S. businesses as well. Many companies that rely on Chinese manufacturing are experiencing product shortages.[18] For example, Under Armour reported a projected loss of $60 million as a result of the coronavirus outbreak.[19] Delta, United, and American Airlines have stopped commercial flights to China, and multiple pilot unions have procured agreements with FedEx and United Postal Service (UPS) to ensure pilots may decline to fly to China.[20] Disney’s closure of Chinese theme parks cost the company around $175 million.[21] Apple also fears supply chain disruptions, Hyundai has temporarily stopped production, luxury brands like Kate Spade, Coach, and Burberry expect losses, as do Starbucks, McDonalds, Ford, Tesla, and many other companies.[22] With our now globalized economy that features interdependent buyers and suppliers, an economic disruption as large as coronavirus will surely ripple around the world.
Public Health Emergencies in the U.S.: What Could the Government’s Economic Response Look Like?
On January 31, 2020, the Health and Human Services (HHS) Secretary, Alex Azar, declared the coronavirus a U.S. public health emergency.[23] This declaration granted him broad discretionary authority, under the Public Health Services Act (PHSA), to assist states, tribal governments, and even public and private health care entities, such as by grant making and supporting public and private research “into the cause, treatment, or prevention of the disease or disorder.”[24] The last public health emergency declared under the PHSA, before the coronavirus, was the opioid epidemic, which culminated in over $485 million in grants to the states and community groups to finance treatment and prevention.[25] Since this funding is highly discretionary, large sums went to help businesses develop a new workforce, such as by training new employees who struggled with opioid addiction.[26]
In addition to the PHSA, President Trump could issue a declaration under the National Emergencies Act (NEA).[27] While the NEA itself does not provide emergency powers, it permits the President to evoke emergency powers delineated in other statutes.[28] The last President to evoke the NEA was President Obama during the 2009 H1N1 outbreak in order to provide aid to states as the scope of the H1N1 virus would have likely overwhelmed their health care resources, requiring emergency federal aid to help finance treatment and prevention.[29] State and local government health departments and private health systems often lack the funding, expertise, and specially-skilled staff needed to handle large-scale epidemics.[30] If the coronavirus spreads on scale similar to H1N1, President Trump could foreseeably evoke the NEA to better coordinate and finance the response across public and private entities.
Whether the U.S. responds to the threat of the
coronavirus solely through HHS under the PHSA, a combination of the PHSA and
the NEA, or even through additional Congressional legislation and
appropriations, it is clear that, if the coronavirus sweeps the nation, the
federal government will need to take emergency action to insure the long-term
viability of the people and the economy.
[1] CDC Shows the Economic Impact of GHSA, Centers for Disease Control and Prevention, (last visited Feb. 11, 2020), https://www.cdc.gov/globalhealth/security/ghsareport/2017/economic.html; Benjamin M. Adams; The Cost of Ignoring the Global HIV Epidemic Is Staggering, HIVPlusMag (Apr. 19, 2018) https://www.hivplusmag.com/treatment/2018/4/18/worldwide-neglect-hiv-has-come-huge-price (estimating the cost of HIV/AIDS between 2000 and 2015); Omar Saeed, Zika Virus Disease, Economic Impact of Zika Virus, Chapter 11 (Nov. 10, 2017) (estimating that the 2016 Zika virus cost the Caribbean and Latin American region an estimated $3.5 billion).
[2] CDC Shows the Economic Impact of GHSA, Centers for Disease Control and Prevention, (last visited Feb. 11, 2020), https://www.cdc.gov/globalhealth/security/ghsareport/2017/economic.html.
[3] Human Coronavirus Types, Centers for Disease Control and Prevention (last visited Feb. 11, 2020), https://www.cdc.gov/coronavirus/types.html.
[4] Id.
[5] Symptoms and Diagnosis, Centers for Disease Control and Prevention (last visited Feb. 11, 2020), https://www.cdc.gov/coronavirus/about/symptoms.html.
[6] See SARS Severe Acute Respiratory Syndrome, World Health Organization (last visited Feb. 11, 2020), (“Symptoms are influenza-like and include fever, malaise, myalgia, headache, diarrhea, and shivering (rigors). . .Cough (initially dry), shortness of breath, and diarrhea are present in the first and/or second week of illness. Severe cases often evolve rapidly, progressing to respiratory distress and requiring intensive care.”); Middle East respiratory syndrome (MERS-CoV), World Health Organization (last visited Feb. 11, 2020), (“A typical presentation of MERS-CoV disease is fever, cough and shortness of breath. Pneumonia is a common finding, but not always present. Gastrointestinal symptoms, including diarrhea, have also been reported. Severe illness can cause respiratory failure that requires mechanical ventilation and support in an intensive care unit . . Approximately 35% of patients with MERS have died, but this may be an overestimate of the true mortality rate.”).
[7] Anita Patel & Daniel B. Jernigan, Initial Public Health Response and Interim Clinical Guidance for the 2019 Novel Coronavirus Outbreak — United States, December 31, 2019–February 4, 2020, Centers for Disease Control and Prevention (February 7, 2020), https://www.cdc.gov/mmwr/volumes/69/wr/mm6905e1.html; Adam Rogers, Coronavirus Has a Name: The Deadly Disease Is Covid-19, Wired
[8] Frequently Asked Questions and Answers, Centers for Disease Control and Prevention (last visited Feb. 11, 2020), https://www.cdc.gov/coronavirus/2019-ncov/faq.html
[9] Situation Update – World Wide, European Centre for Disease Control and Prevention (last visited Feb. 11, 2020), https://www.ecdc.europa.eu/en/geographical-distribution-2019-ncov-cases (“Since 31 December 2019 and as of 9 February 2020, 37,564 laboratory-confirmed cases of novel coronavirus (2019-nCoV) infection have been reported, including 813 deaths.”).
[10] Id.
[11] 2019 Novel Coronavirus (2019-nCoV) Situation Summary, Centers for Disease Control and Prevention (last visited Feb. 11, 2020), https://www.cdc.gov/coronavirus/2019-nCoV/summary.html#risk-assessment (noting that the novel coronavirus meets the two criteria for a pandemic as the virus is 1. resulting in serious illness and death and 2. is continuing to spread person-to-person).
[12] CDC Shows the Economic Impact of GHSA, Centers for Disease Control and Prevention, (last visited Feb. 11, 2020), https://www.cdc.gov/globalhealth/security/ghsareport/2017/economic.html.
[13] Amanda Lee, Explained: The Economic Importance of China’s Lunar New Year as the Year of the Rat Begins, South China Morning Post (Jan. 25. 2020), https://www.scmp.com/economy/china-economy/article/3047282/explained-economic-importance-chinas-lunar-new-year-year-rat.
[14] Id.; See also, Maggie Hiufu Wong, 3 Billion Journeys: World’s Biggest Human Migration Begins in China, CNN (Jan. 10, 2020), https://edition.cnn.com/travel/article/chunyun-2020-lunar-new-year-travel-rush-china/index.html.
[15] China to Inject $173 Billion into Economy to Cushion Expected Stock Shock, MarketWatch (Feb. 2, 2020), https://www.marketwatch.com/story/china-to-inject-173-billion-into-economy-to-cushion-expected-stock-shock-2020-02-02.
[16] Id.
[17] Hudson Lockett, et al., Chinese Stocks Suffer Worst Day Since 2015 on Coronavirus Fears, Financial Times (Feb. 3, 2020), https://www.ft.com/content/14867176-461e-11ea-aeb3-955839e06441
[18] David Yaffe-Bellany, From Starbucks to FedEx, Coronavirus Upends Businesses That Depend on China, New York Times ( Feb. 10, 2020) https://www.nytimes.com/2020/02/07/business/coronavirus-business-impact.html
[19] Id.
[20] Id.
[21] Id.
[22] Id.
[23] Secretary Azar Declares Public Health Emergency for United States for 2019 Novel Coronavirus, Dep’t of Health and Human Services (last visited Feb. 11, 2020), https://www.hhs.gov/about/news/2020/01/31/secretary-azar-declares-public-health-emergency-us-2019-novel-coronavirus.html.
[24] 42 U.S.C. § 247; See also, Office of the Assistant Secretary for Preparedness and Response, Public Health Emergency Declaration Q&As, Dep’t of Health and Human Services (last visited Feb. 11, 2020) https://www.phe.gov/Preparedness/legal/Pages/phe-qa.aspx#faq1 (providing examples which include, among others,: waiving or modifying certain Medicare, Medicaid, Children’s Health Insurance Program (CHIP), and Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule requirements; adjusting Medicare reimbursement for certain Part B drugs; Modifying practice of telemedicine under the Ryan Haight Online Pharmacy; limiting liability of emergency response doctors; or waiving certain requirements of the Drug Supply Chain Security Act.”).
[25] Office of the Secretary, Determination That a Public Health Emergency Exists, Dep’t of Health and Human Services (last visited Feb. 11, 2020), https://www.cms.gov/About-CMS/Agency-Information/Emergency/Downloads/October_26_2017_Public_Health_Declaration_for_Opioids_Crisis.pdf; Ongoing Emergencies and Disasters, Centers for Medicare and Medicaid Services (last visited Feb. 11, 2020), https://www.cms.gov/About-CMS/Agency-Information/Emergency/EPRO/Current-Emergencies/Ongoing-emergencies; Office of the Secretary, Secretary Price Announces HHS Strategy for Fighting Opioid Crisis, Dep’t of Health and Human Services (last visited Feb. 11, 2020), https://www.hhs.gov/about/leadership/secretary/speeches/2017-speeches/secretary-price-announces-hhs-strategy-for-fighting-opioid-crisis/index.html
[26] Department of Labor, U.S. Department of Labor Announces Funding Opportunity to Support Communities Impacted by the Opioid Crisis https://www.dol.gov/newsroom/releases/eta/eta20191031-0
[27] 50 U.S.C. § 1601 et seq;
[28] Id. See also, National Emergencies Act, Sections 201 and 301, Fact Sheet, Association of State and Territory Health Officials (last visited Feb. 11, 2020), https://www.astho.org/Programs/Preparedness/Public-Health-Emergency-Law/Emergency-Authority-and-Immunity-Toolkit/National-Emergencies-Act,-Sections-201-and-301-Fact-Sheet/
[29] Id.
[30] Laurie Garrett, Trump Has Sabotaged America’s Coronavirus Response, Foreign Policy Analytics, (Jan. 31, 2020), https://foreignpolicy.com/2020/01/31/coronavirus-china-trump-united-states-public-health-emergency-response/ (noting that state and local governments tend to “struggl[e] with underfunded agencies, understaffing, and no genuine epidemic experience. Large and small, America’s localities rely in times of public health crisis on the federal government.”).