To say that America has struggled to cope with the COVID-19 pandemic is something of an understatement. With well over 3 million infections and 130 thousand deaths – and the numbers continuing to rise – we’re unfortunately at the top of the league tables in terms of countries affected by the pandemic. Explanations for the poor response are plentiful and well-publicized. Leadership and messaging from the federal government has been generally judged to be poor, with President Trump seemingly more concerned about the economic impact of shutdowns than with health and safety. The decentralized system of government in the US – with authority for most decisions connected with pandemic response resting with local decision makers – makes it challenging to formulate and execute a cohesive response policy. These factors, combined with the fact that the country simply wasn’t well prepared to deal with a pathogenic threat of this nature, has resulted in the current predicament.
So now, five months into the pandemic, having absorbed a second wave of the virus that saw spiking infection rates in badly affected areas, such as California, Texas and Florida, what next? Certainly, there has been an acceptance (grudging, in some cases) of elevated caution levels throughout the country, as localities seek to avoid becoming the next hot spot. Two months ago, walking into the grocery store, it was rare to see people in masks. Now, most stores are requiring them. This of course is for the good, but there are two key unanswered questions that will determine the course of the disease in the next several months and the response to it. One, will younger Americans, seen by some as a key driver of spiking infections, change behavior and limit social interaction? And two, will the death rate spike (to-date, it has remained relatively muted during the second wave)?
And the impact? It likely means living in the ’90 percent’ economy for far longer than we thought or hoped. The prospects for a return to economic growth surely are far dimmer than they were just a month or two ago, as evidenced by the grim report of a 33% decline in year-on-year GDP in the second quarter. It will be harder for those who lost jobs to get rehired and many more may soon join the ranks of the unemployed. Moreover, daily lives will continue to be disrupted in ways we’re now pretty much used to, but certainly not enjoying – far less social activity, limited or no travel, disrupted schools for children. These are just some of the most notable impacts of the ongoing crisis. More than that though, at this point it seems that people are simply prepared to live in the new status quo indefinitely – fifty-odd thousand new cases a day, a thousand or more deaths – ho-hum, such is life now. It obviously begs the question of when will it end? A vaccine or therapeutic would be a game-changer, but in the near or even medium term the answer is not obvious.
Of course, there’s also been an impact on our healthcare system – including some good, though overall the impact has probably been negative. In terms of the good, we can at least say that the next time a pandemic comes around we won’t be caught so flat-footed. It’s a pity that it’s taken the deaths of over 150 thousand people, but the lessons learned this time will undoubtedly put us in a better position in terms of response and reaction if something similar occurs again. As for the bad, the impact has clearly been felt most acutely by providers across the spectrum. Not many people are thinking of putting their parents in a nursing home in the foreseeable future. Elective and other non-urgent surgical procedures or even visits to the doctor have pretty much all been put on hold. These are the money-makers for providers and volumes are down far enough to present an existential threat in some instances. While it’s true that certain hospitals that are operating near capacity because of Covid-19, such cases are more likely to be reimbursed through Medicare or Medicaid, or worse not at all. The biopharma sector has fared better. Prescription rates are down for medications that address non-urgent, non-chronic conditions, but it’s largely business as usual, except for those companies responding to the virus itself. Overall, it’s surely one of the sectors most immune to impact from the virus. Moreover, the industry has experienced something of a PR renaissance, as the media attention has shifted towards work to find effective therapeutics and vaccines and away from high prescription prices.
Lastly, it’s going to have an undeniable political impact, in this presidential election year. Prior to the pandemic the American economy was flying high and President Trump’s re-election prospects looked quite good, considering that no incumbent president has been voted out of office in the last 100 years while enjoying a buoyant economy. It’s too early to have a clear idea of the outcome of the election now, but few would deny that the pandemic, and what most people consider his administration’s poor response to it, have hurt his re-election chances, and will continue to be a yoke around his neck assuming the current status quo is maintained. More broadly, democrats will be looking to make gains in both houses of congress and gubernatorial races across the country as a result of virus responses, resultant economic downturns and incumbents readily available as scapegoats. Whether events play out the way they hope remains to be seen. Much can transpire in the next three months.