Covid 19: Scenario Planning for the Future
Given that we have begun to think of re-opening the economy in the United States, I have been thinking of what the next few months and years would look like in terms of return to normalcy. I see two camps of people, one which is optimistic that things will return back to normalcy pretty soon. And, the other which thinks that things will never be the same as before.
The two major factors in terms of return to normalcy will be (1) how the governments, both at the federal and state level contain the health risks of the virus and thus, how they re-open the economy based on that, and (2) how consumer behavior changes in response to #1
I can think of 4 scenarios we may end up with, not all of which are mutually exclusive.
Scenario 1: Most optimistic, life goes back exactly how it was before covid-19
This would mean that people can move freely without elevated health risks, large gatherings can happen and international travel goes back to what it was before the pandemic. The two ways this scenario can happen are if
(1) A vaccine is developed and then administered to atleast all or most of the 330M people in the US and if we want international travel to resume, then most of the globe. This would require intensive vaccine research, which has already begun and simultaneously, scaling up production of the feasible vaccines so that we can get all of the global population vaccinated.
Timeframe: Most vaccine research takes atleast 12–18 months, and scaling up production is also a time-intensive task. Hence, optimistically, it would take atleast 2 years and maybe more.
(2) Herd immunity
Herd immunity acts very similarly to a vaccine, only that the immunity is gained organically by large swaths of the population contracting the virus over time. Given how contagious covid-19 is, the estimates suggest that 70% of the population would need to be immune for this to be effective. Given the positive rates in the US, this is unlikely to happen organically. Hence, the only way to gain herd immunity is to actually force it. One option could be the below
- Remove shelter-in-place in tranches, starting with the least vulnerable populations. For ex. allow only people in 20s to go back to school/work until that age range is all infected. Next allow people in 30s and so on.
- Ramp up care and hospital capacity based on the rate of infection expected for the age range that has shelter-in-place lifted for that age, so that mortality rate is contained
Timeframe: It depends on how long it takes to get the whole population infected and how aggressively the govt encourages it.
Forced herd immunity can be hard to execute well. Many people will be wary of getting infected despite being healthy and eligible and would stay indoors and not participate. Also, inevitably, this means many will die since the mortality rate is not 0 even for the less vulnerable age ranges. So, it seems highly unlikely that this can be a viable and humane option.
I do expect some countries would attain herd immunity not through enforcement but through inaction, where the virus just washes through the full population, and ends up resulting in the country becoming immune but at the cost of a high number of deaths. Countries with poor healthcare and governance will likely go down this path.
Scenario 2: Separate lives for those who are covid-19 infected and those who aren’t
People without the virus can return to a life that was normal before. People who have the virus are aggressively identified and isolated. This is fairly similar to how China and South Korea acted.
Imagine a world where every single person has a covid-19 kit at home, similar to a glucose monitor. Before you are allowed to buy a ticket for the basketball game, you have to upload your test results and only if you test negative, you are allowed to go to the game. The world is not the same in this scenario, even though this feels reasonable. A test result becomes the gatekeeper for you to participate in any kind of activity that involves interaction with other humans. Going to the mall? Show your covid test result for the day. Boarding a flight?Show your test result for the day. If you happen to test positive, you can not board the flight.
This would require that Covid-19 at-home test kits can be mass produced and provide near-instantaneous results. Aggressive health data and location data surveillance also would be required to prevent the infected from interacting with non-infected people in non-gated areas such as parks, neighborhoods etc. There are however, extensive privacy risks associated with tracking everyone’s health and location data. Whether we sacrifice privacy at the altar of health or build privacy-preserving solutions would depend on the government’s appetite to spend the energy to balance privacy and health/economy.
Timeframe: Kits like these are in active development, so it depends on how fast the production is ramped up. This could go live in the next few months, if test kits are available and a near-normal life could return. Process reorientation to ensure that test results are collected whenever gatherings of people happen would likely be the biggest bottle-neck but the incentives of re-opening the economy would likely accelerate businesses etc. to invest in these new processes.
Scenario 3: Separate lives for those with immunity and those without
People who have already been infected and survived will return to a normal life. Everybody else is sheltered. You will need to get a serological test done and get a certificate issued that you can use to return to work. Germany is already working on a concept like this.
This scenario is mostly a stop-gap measure while a country is easing off of a lockdown to gradually let people resume work in the economy. However, since the infection rates are still relatively small, it can never be a measure to reopen the full economy since only a small percentage of people have contracted the virus. The only other scenario where this could work is if there’s evidence of large percentage of the population being infected.
Similar to scenario 2, this would require scaling serological tests to identify those with antibodies for covid-19 . Serological tests can be produced at mass scale already, however, the major concern is their effectiveness.
Timeframe: Can begin in the next few months. Scenario 3 is worse than Scenario 2 since at this point, it would be a smaller percentage of the population. However, scaling tests to a smaller percentage of the population seems more likely than mass testing. Hence, I believe that this is much more likely in the next few months to gradually ease the lockdown.
Scenario 4 (Worst case): On and off lockdowns
In the absence of scaling testing and vaccines being available, this is the most likely scenario to be followed. This means that once cases reach some minimum threshold, the economy is reopened but with lots of restrictions to help contain the case count. If the case count increases significantly after re-opening , and risks inundating the healthcare system again, a shelter-in-place will be issued again to bring down the case count to manageable levels. This is what we are seeing in Singapore right now.
Timeframe: Likely to happen very soon (maybe a month or sooner) after economy is re-opened without scaled testing and contact tracing.
This will be the most disruptive scenario for the next year or so, since it’s the most unpredictable. The uncertainty will likely result in muted consumer demand, which will lead to a longer road to economic recovery.
Timeline of the various scenarios
Scenario 4-> Scenario 3-> Scenario 2 OR 1
I suspect all of these scenarios will play out in the next 2 years. We will likely start with scenario 4, moving onto scenario 3. Depending on how good we get with testing and the progress made on vaccines, we could either move to scenario 2 or jump ahead to scenario1.
So, when will life return to normal ?
Normal as we know it might shift depending on how further are scenarios 1 or 2 from here on. If we get to Scenario 1 or 2 pretty fast, people will bounce back. What we’ve seen is that people do crave human interaction. Not many like remote work. Not many of us know or like how to cook. We enjoy traveling. However, the longer it takes to get to scenario 1 or 2, the higher is the likelihood that many of our current behaviors will change — people might get used to remote work, social distancing/digital interactions could seem more convenient, self-sufficiency/autarky is the norm(cutting your own hair, growing your own vegetables, 3D printing your own items etc.), VR experiences etc.
Additionally, the economy itself will be reshaped where there will be significant re-allocation of wealth to new types of activities at the cost of old ones. For ex. eating out could vanish entirely, restaurants would go out of business entirely, retail will be wiped out, so by the time we do emerge out of the other scenarios into scenario 1/2, our lives will never go back to the old one since the institutions that supported the old life would have vanished.