Season Flu vs. COVID-19

As humans, when facing something new, we tend to compare against things we are familiar with to draw parallels and establish expectations. The COVID-19 pandemic is no exception. Unfortunately, there are few historical precedents for this kind of event or its impact on the modern economy.

Very few people are infectious disease experts or epidemiologists. These professionals understand the important nuances and why “this is different.” For the rest of us, we’re on our own as we try to assess the risk of the disease itself, how policy makers should address it, and the very tough balancing act between protecting public health and the broader economy. 

Naturally, one of the most common comparisons of COVID-19 is against the seasonal flu. The entire world deals with it annually without major disruptions despite it killing a significant number of people. The Centers for Disease Control and Prevention estimate that 63,000 Americans died during the most recent flu season. But is the seasonal flu a good comparison for what we’re currently dealing with?

Wall Street Journal writer, Jo Craven McGinty, addressed the flu vs. COVID-19 comparison in a striking article today titled, Why Doesn’t the Flu Tank Economy Like Covid-19?  I’d highly recommend reading it for yourself if you’re interested in understanding this important contrast. 

Here are some key of the key points:

• “Covid-19 differs from the flu in how quickly it spreads, the length and severity of the illness, and the unusual demands a contagion with no cure places on medical staff and facilities.”
• The hospitalization rate for COVID-19 is over TEN TIMES higher than seasonal flu (roughly 12% vs. 1%).
• The median hospital stay for COVID-19 is around 12 days vs. 3.6 days for the flu.
• The fatality rate may be as high as 3.59% compared to 0.11% for the flu. (Note – I’ve seen wildly different estimates of the fatality rate. Some suggest in the developed world it is <1%. Either way, the death rate is multitudes higher than seasonal influenza.)

The other major problem with this disease is how contagious it is. Seasonal flu tends to be spread out over many months. As we’ve witnessed in European countries, and now in places like New York, COVID-19 can spread in an explosive manner over days and weeks. Add to that a hospitalization rate that is over 10 times the seasonal flu and it’s easy to see how this outbreak can blow up a healthcare system very rapidly. 

Another point that struck me was the fact that no one has immunity. From the WSJ article, “most people have some immunity to the flu, either from vaccines or previous exposure, and nearly all health care workers are protected by the flu shot.” The last part about healthcare workers is especially important. Because no one is immune, everyone in healthcare settings is now forced to use protective equipment (gloves, masks, etc.). Add consumer hoarding to this increase in demand and you get massive supply shortages.  

The number of estimated deaths in the United States is a moving target. In early April, one widely cited estimate suggested the US would experience 100,000-240,000 deaths. That has since been revised downward to under 100,000 which makes it appear closer to a normal flu season. But that has to be looked at in the context of shutting down the entire country for months. Imagine where we would be currently if no containment measures had been taken.  

The good news is the efforts to slow the spread appear to be working. Also, although the numbers change daily, this week I read that Minnesota had the lowest confirmed COVID-19 cases on a per capita basis across all 50 states. 

Without any doubt, this is a crisis for which the modern world has never seen. In terms of reopening the economy, we can look to Asian countries for guidance as they are weeks to months ahead of the western world in this pandemic. What appears to be working is a gradual reopening with extremely aggressive testing measures so that new cases can be quickly identified and outbreaks contained. But no one will be able to return to “normal” until a vaccine is developed. Fortunately, the entire globe is working on this simultaneously. Everything I read suggests a vaccine will ultimately be available. The big question is when. 

Although the seasonal flu is not a good comparison in many respects, there does appear to be hope that COVID-19, like many other viruses, may weaken with warmer weather. The hope is this buys the world time to prepare for future outbreaks and ultimately come up with a vaccine that is widely distributable.  

Disclosure
Advisory services offered through Trott Brook Financial Inc. a registered investment advisor.  Securities offered through LaSalle St. Securities, LLC, a FINRA/SIPC member broker/dealer.  Trott Brook Financial Inc. and LaSalle St. Securities, LLC are unaffiliated separate legal entities.