Thursday, May 07, 2009

Pearls before Swine (flu)

Recent reports suggest that the threat of the swine flu pandemic is on the decline. There is also reason to suggest that swine flu is not as deadly as initially feared. Outside of Mexico, only 2 people have died from the virus. Most victims reportedly only suffered mild symptoms.

The measures by various governments to contain the outbreak, which were seen as prudent, now appear to be overreactions. The quarantine of the Metropark Hotel in Hong Kong, the cancellation of flights from Mexico in various countries, and even Singapore’s sudden imposition of visas on Mexican nationals.

I do not purport to question these difficult decisions, which were taken out without the luxury of complete information or much time.

Nonetheless, it may be time to carry out an analysis of costs and benefits of these actions, such that better decisions can be taken during future pandemic threats or other crises.

Let’s take a look at it from the Singapore perspective.

On the “cost” side, some items we should include would be:
- Cost of medical supplies (stockpile of Tamiflu, thermometers, masks etc)
- Screening measures (including thermal scanners at buildings & checkpoints)
- Quarantine-related costs (including cost of blocking the Aloha chalets)
- Costs of medical and security personnel
- Research into vaccines and screening kits
- Business continuity operations
- Other opportunity costs (time lost for above measures, loss of revenues from Mexican tourists etc)

On the “benefits” side, we would have:
- Saved X number of lives
- Prevented Y number of people from becoming ill (saving $Z in man hours)
- (Possibly) avoided Singapore becoming a “H1N1 affected” country and it implications on tourism/travel etc.

Taking the analysis down to its core elements, we spent a lot of money (say $50 million, a number pulled out of the hat) to save a small number of lives (say 5, now that it appears that the current strain of flu was not exactly lethal). Using these assumptions, one can say that we spent $10 million to save each live which swine flu would have taken.

Was it worth it?

From a moral/philosophical perspective, some would say that human lives are priceless.

But the reality is that resources are finite and like it or not, lives would be lost elsewhere for want of the $10 million spent on fighting swine flu. For example, spending $10 million on seat belts on buses used to ferry school children would likely save more than 1 live. What about an additional $10 million on kidney dialysis, or on cancer research?

A responsible government always needs to remain calm and methodically consider the costs and benefits of each move, even in the face of a crisis like the swine flu outbreak.

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