Coronavirus Outbreak Could Slam The Economy In U.S., Oregon
Lawmakers opened Oregon’s coffers on Monday by approving $5 million in emergency funding to fight coronavirus. The Oregon Health Authority also expects to receive $20 million from the federal government as part of the $8.3 billion coronavirus package approved by Congress.
The outbreak could cost plenty. Gov. Kate Brown estimated last week that Oregon might need $7 million to $10 million a month for testing and treatment to fight the disease. The state needs more coronavirus tests and hundreds of thousands of pieces of medical equipment for health care workers.
Oregon has only tested about 230 people. So far, 14 people are known to have the virus, and two are hospitalized. No one has died. But the outbreak has only just begun in Oregon.
“In addition to these 14 cases, there are likely many more cases in the community that we haven’t identified,” Dr. Dean Sidelinger, the state epidemiologist, said at a press briefing on Monday.
No one knows how the outbreak will progress, but one thing is clear: The mood is grim. The stock market plunged on Monday. The Dow Jones Industrial Average fell nearly 8% or more than 2,000 points, the biggest point drop in history.
Economists are concerned.
“The bottom line to remember about all of this is that at the current time there is a tremendous amount of uncertainty about how bad this is going to get,” Rajiv Sharma, a Portland State University economist who studies the U.S. health care system, told The Lund Report.
Sharma has been studying the potential financial impact of the virus. His findings, based on projections about the severity of coronavirus cases and the spread of past epidemics, are sobering. An unchecked spread of the disease could infect roughly one-third of the population, with 80,000 Oregon cases severe enough to require extensive hospitalization. Caring for patients who need hospitalization could cost the state up to $8 billion.
Nationwide, the price tag could hit $600 billion, Sharma said. The level of spending required to stem an epidemic could equal nearly one-fifth of the $3.5 trillion the federal government spends on the health care system each year, he said.
“Looking at where we are right now in the U.S., the best-case scenario is that we have somewhere around 1,000 to 2,000 people who are infected, and mortality stays in the range of about 100 people,” Sharma said.
By Monday, the Centers for Disease Control and Prevention counted 423 cases in the United States, with the West Coast particularly hard hit. In Washington State, 162 people have been infected and 22 have died. California has 133 cases -- not including those on the Grand Princes cruise ship off the California coast -- and two deaths.
The World Health Organization estimates that coronavirus has a 3.4% death rate.
In terms of the economy, Josh Lehner, an economist with the Oregon Office of Economic Analysis, the agency responsible for delivering state economic and revenue forecasts, said the worst-case scenario would be a mass drop in consumer spending, sparked by fears over the health impact of the virus. That already has caused investors to pull back and could prompt employers to stop hiring, marking the catalyst for a recession-type of event.
But he noted that Oregon’s overall economic performance is strong, and the agency’s most recent data for the state, from January, showed solid growth.
Still, “the concerns are more domestic these days,” Lehner told The Lund Report. “It’s not just something happening in China.”
His agency will report February economic data for the state in the next few weeks and March data next month, which could help paint a clearer picture of early impacts of the coronavirus spread.
Last week, the Trump administration announced the availability of coronavirus testing for any patient who gets approval from a doctor. But Oregon, which received 1,500 tests to begin with, is rationing them by limiting testing to people who are sick and don’t have the flu.
Sidelinger said he expects the Oregon Health Authority to receive more tests from the CDC in coming days.
Dr. Jennifer Vines, lead health officer for Multnomah, Washington and Clackamas counties, said at the briefing that she’s not heard of any resource issues at Oregon hospitals. But that might not be the case if cases spike. The state has a total of 510 negative pressure rooms that are used for patients with an infectious disease. The rooms prevent infection from spreading to the rest of the hospital. Hospitals in the Portland metro area have about half the rooms in Oregon.
Sharma said medical providers in the U.S. are limited in their ability to manage an outbreak because of the structure of the health care system and the presence of so many uninsured and underinsured people.
“Beyond the cost angle, our health care system does not have the capacity to care for such a large number of extremely sick people,” he said. “We have 30 million people who are uninsured. We also have tens of millions more people who are underinsured, where they may have large deductibles and could easily end up with a bill of $1,000 to $3,000 if they go to the ER. People who should seek care may be reluctant to seek it, and that makes the U.S. health care system from the perspective of the financing side ill-prepared to deal with something like this.”
Lynne Terry contributed to this report.
You can reach Elon Glucklich at [email protected].