The havoc of COVID-19 is destroying the global economy. Last week, U.S. stocks plummeted into correction territory, obliterating an estimate of $7 trillion. The stocks’ fall, though, does not seem to reflect the disease situation in the U.S. Although the U.S. suspended flights from and to China, flights to major disease outbreak areas, including Italy, South Korea, and Japan, remain in operation.
The U.S. is theoretically not immune to the spread of COVID-19. However, as of March 2, there are at least 91 confirmed cases, of which 45 were expatriates from the Diamond princess – according to the Centers for Disease Control and Prevention. One possible reason for the low number is similar to that in Japan: fewer tests. Before CDC took the data down, only 445 concluded tests were performed so far.
What caused this low numbers of tests? It could be the CDC’s stringent testing criteria – many have reported delay of testing because the patient did not fit the criteria. Or, it is due to the cost. Although the COVID-19 test is free, Americans still have to pay something around $1,000 for hospital-related costs. This high cost undoubtedly stops potential patients from getting tested. We know the symptoms of COVID-19, but we do not know how long it takes for symptoms to show. The danger of untested individuals carrying COVID-19 is the alarming risk of spreading the disease in American communities without knowing. This fear of uncertainly is behind the fall of the U.S. stock market. Even though the U.S. GDP experiences steady growth at approximately 2% over the past quarters, COVID-19 threatens U.S. with zero GDP growth. The Fed might even need to further cut the benchmark rate to save the stock fall of more than 12%.
The fall of stocks is not only caused by the virus, but the political and economic environment in the U.S. makes its own contribution. U.S. economy is based on a capitalistic model that stimulates technology growth and labor productivity. In a long time, capitalism is the dominant political philosophy, and we are seeing its influence on healthcare. Big corporations made massive profits by moving the free market beyond goods to service, including health and education. Back in 1978, the winner of Nobel Prize in Economics Kennth Arrow described the failure of health care market was that those who need medical care the most are the least able to afford it. What we are seeing now in 2020 is the rich pays for a laundry list of services and the poor cannot afford their blood pressure medicine. The poor gets poorer from being sick, the sick gets sicker from being poor. The consequence of this is the lack of productivity, economic decline, and poor population health.
What COVID-19 exposes is not just that the poor cannot afford to be tested or stay home from work to self-quarantine. It shows us the disadvantages of the U.S. healthcare system: lack of preventative medicine, weak primary care system, and a shortage of health workforce.
Socialistic ideas of free healthcare and education seem to be easy solutions for these problems, but they are at the expense of the U.S. economy. When we cannot keep paying for it, will we fall back to leveraging commercial policies and stimulating domestic productivity, like capitalism?
The big picture seems to show a trade-off between economic prosperity and population health; however, these two are highly correlated. We always talk about disease prevention, primary care, and socioeconomic factors in health. None of them will sustain unless the U.S. experiences a cultural shift to address inequality and improve the quality of healthcare.
Is America ready for COVID-19 and the economic recession? It depends on the U.S. administration’s ability to tackle the vulnerability of health and social systems exposed by this pandemic.
Jon Zhou, Pharm.D. is a pharmacist and a Master of Public Health candidate at Yale School of Public Health.