The indirect costs of the lockdown are seldom discussed in New Zealand. You will not hear the Government talk about it much. These costs need to be weighed against the benefits of a strict Level 4 lockdown. Or, to put it another way, each strategy has costs.
It is not “lives v the economy” but “lives v lives”.
L4 lockdown will cause deaths (total unknown) in the near and not-so-near future (call this “X”)
Why?
Isolation, bankrupt businesses, ruined livelihoods, higher unemployment, etc., induce depression, despair and other psychosocial malaises and thereafter lead to suicide. Meanwhile, and less remotely in terms of the time frame, non-urgent or non-essential operations, treatments and tests are postponed and the importune candidates deteriorate and die.
Economic decline reduces the wealth of the nation (even putting aside the massive $12.1b rescue package… and how will that be paid for?) and reduces the tax revenue to fund hospitals, medicines, medical research and so on. The diminished economic prosperity leads to reduced governmental (and private sector) ability to sustain life.
L4 Lockdown has saved lives (total unknown) and has curtailed the spread of the Wuhan Virus and its various non-fatal disease effects (e.g. time spent sick) (call these benefits “Y”)
A mitigation strategy (say Lockdown Level 2) would also result in immediate deaths (a greater number, one presumes, than for the L4 strategy), but a much lower number of future deaths than X, due to the less restrictive effects upon the economy and the mental health of society etc. Call this "Z".
Is X greater than Y?
Is X greater than Z?
All this is very difficult, perhaps impossible, to assess with any accuracy since the variables (e.g. number of lives saved) are unknown and can only be estimated. What is the mortality rate? 3 % (as WHO speculated initially) or something like realistic such as 0.1 or 0.2 %? More testing is needed: we do not have the data yet.
Furthermore, the causation process is slippery. Do we know that taking actions A and B led to (i.e., caused) outcome T or W? If we did not do A and B would outcomes T or W have still occurred, or by the same magnitude?
The broad point is that the L4 lockdown cost (X) needs to be weighed against the benefits of this strict lockdown (Y).
And the L4 lockdown cost (X) needs to be compared to the costs of a more focused mitigation strategy (Z), a path NZ did not take.
It is hard (especially for politicians) to ignore present deaths against the desire to prevent an unknown number of future deaths, but rational policy requires us to do so.
Health authorities have been making these sorts of calculations for decades and use something called a cost per QALY (Quality Adjusted Life Year) approach. How much should we spend to gain one year of completely healthy life (one QALY). For spending $1b dollars how any QALYs could we gain? A very recent cost/ benefit study of the NZ’s Covid-19 L4 strategy by economist, Dr Martin Lally, utilizes this concept.
Lally notes that in NZ the cost per QALY is put at approximately $45,000 (£30,000 in the UK, according to Kendrick). Dr Lally concluded:
“World-wide, many governments are urging citizens to stay home or shuttering particular businesses, in order to reduce the death toll from Covid-19. This paper considers the effect of a China style suppression policy versus a milder mitigation policy. In the case of New Zealand, if the cost of the suppression policy were even a loss of 10% of one year’s GDP [approximately $33b] , the cost per QALY saved would be about $800,000, which is 18 times the currently used value for a QALY of $45,000.”
On other words, if I have understood it correctly, we would be spending 18 times what we would spend for health improvements for other diseases to cure this disease (and give the Covid 19 patients additional QALYs). Dr Malcolm Kendrick, an English GP, put it this way:
”Are we paying too much to lock-down Covid? The answer from most people may well be that ‘I don’t care, we need to spend as much as it takes.’ My fear is that, if we are not very careful, the actions we are taking will result in significantly more deaths than we are trying to prevent.
Even if we restrict the analysis purely to the cost per QALY and narrow the ‘health’ analysis purely to Covid, and deaths from Covid, it remains difficult to justify spending £350 billion [$12.1b in NZ] to control a single disease.”
Kendrick estimates (given assumptions that lean in favour of a very high mortality rate) that the costs per QALY in the UK would be £194,000 or about 6 times what would be spent on other diseases.
One might accuse me (and Lally and Kendrick) of taking a cold-hearted, callous, almost inhumane approach (‘if it was your father or grandfather’). I suggest such charges are misplaced.
I heard the PM (more than once on the daily TV briefing---I cannot recall the exact dates) say (words to effect): Get the Covid 19 eliminated and that is the best economic stance/ strategy; Ensure the virus is squashed and we can then address the economy. Were it that simple.
I hope we get down to Level 2 as soon as possible. The growth factor (rate of new cases) of Covid 19 is very promising.
Below 1 is good (showing the number of new cases is going down) and our recent GF is 19/34 = 0.55. But I am not holding my breath. The Government will, as they see it, err on the side of caution.
In this brief comment I have talked about the cost of L4 lockdown in terms of lives. I have not talked about the severe restriction upon our civil liberties and fundamental freedoms, nor the effective abdication of political decision-making to scientists, especially, medical experts, epidemiologists, virologists, and so on. As for the former, emergency restrictions have a habit of stubbornly remaining and the level of civic freedoms often does not return to what it was.
As for government by unelected medical experts and bureaucrats, this is a myopic and anti-democratic way of governing. But these concerns must await further comment.