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First published March 29, 2020. Last updated March 29, 2020.

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PHASE 1 [P1]

Characterized by: The number of new cases per day is rising. See Note 1.
Goal: Stop the number of new cases from rising as soon as possible. Governments should do “whatever it takes” (within reason) to make P1 as short as possible. See Note 2.
How to achieve the goal: Implement social distancing rules and ratchet up the restrictions every few days until the number of new cases per day starts falling. See Note 3.
Economic consequences: Economic activity will fall. See Note 4.

Note 1:

Governments do NOT have control of the virus if the number of new cases per day is rising.
It’s impossible to accurately predict when the number of new cases will stop rising.
Governments do not know the magnitude of the problem until this critical milestone is reached and P1 ends.

Note 2:

The number of days a community spends in P1 needs to be minimized.
Death rate: The more time spent in P1, the higher the death rate (not just the number of deaths) because the total number of cases that require medical care (specifically – hospital bed, ventilator, trained healthcare worker that has protective equipment) will exceed the available capacity.
Economic activity: Economic activity will contract further and further each week. Each week spent in P1 creates more economic damage and increases both the time required to recover and the amount of government stimulus required to resume pre P1 economic activity.

Note 3:

The amount of time spent in P1 can be minimized by implementing more aggressive social distancing rules or implementing them earlier or both. Isolation and testing is most important. Isolation stops people from spreading the virus and “random representative testing” is the only true measure of the penetration of the virus within the community. Decisions are only as good as the information used to make them. Governments need to know the percentage of the population (in all major population centers) that are infected with C19 in order to make a long list of critical decisions.

Note 4:

During restrictive social distancing, society will function more effectively and in a more orderly manner if people adopt a constructive attitude like “we are all in this together”. This means that governments and the media need to clearly refute flawed theories that may be circulating in the general public discussion about how to handle the situation. For example:

Strong social distancing is an overreaction. If social distancing restrictions are implemented early when there is a tiny number of cases and deaths, many people will say: “We lose more people to car accidents, suicide, the flu, etc. This is an overreaction”. The same people will say that “the cure is worse than the problem”, meaning that the economic damage is worse than the (relatively) small number of deaths that have occurred at that point in time. This thinking is flawed because car accidents, suicide, and the flu do not have the ability to grow in number by doubling every 2-5 days. If a highly infectious disease (C19 is approximately 2 times more infectious than the flu – no definite data available) is left to spread then the majority of the population could be infected within weeks or months. This short time frame of “weeks or months” matters because, during P1 & P2, there is no vaccine or therapeutic so the only way to treat people that have developed severe symptoms is with ventilators in the healthcare system. In this scenario, the number of cases requiring hospitalization will far exceed the capacity of the healthcare system and that leads to mass deaths. The number of cases requiring hospitalization in Italy exceeded the capacity of the healthcare system and the death rate is 11% (10,000 dead from 90,000 cases as at March 29, 2020). It’s easy to quantify the possible consequences for a country or region of 25 million people like Australia. If 50% of the population test positive: 50% x population x death rate of 11% = 1,375,000 deaths. By comparison, the flu kills 3,000 people a year in Australia (according to health.gov.au). Therefore, the simple conclusion is: do you prefer 1,375,000 deaths or a bad recession?
Young people have nothing to worry about. In the United States, an early report from CDC indicated that, of more than 500 people known to be hospitalized after testing positive for C19, 18% were 45-54 years and 20% were aged 20-44 years. Of those admitted to intensive care, 36% were aged 45-64 years and 12% were aged 20-44 years. (https://www.cdc.gov/mmwr/volumes/69/wr/mm6912e2.htm?s_cid=mm6912e2_w). The simple message for young people is this: If you are young and test positive for C19, the chances of dying are low but you still have a 1 in 5 chance of being hospitalized and a 1 in 10 chance of ending up in an intensive care unit.

PHASE 2 [P2]

Characterized by: The number of new cases is flat or falling
Goal: Buy time until vaccine / therapeutic is available (Phase 3)
How to achieve the goal:
- Harden healthcare system (expand capacity and resources). See Note 1
- Understand the virus. See Note 2.
- Develop vaccines and therapeutics. See Note 3.
- Relax social restrictions in increments but not completely. See Note 4.
Economic consequences:
- Economic activity will stop contracting but not return to normal. A “U” shaped recovery is more likely than a “V” shaped recovery. See Note 5

Note 1

Expand healthcare capacity and resources. In order for a patient to be successfully treated they will need a specific combination of resources. In this case, it is a hospital bed, ventilator, trained healthcare worker and Personal protective equipment (PPE) for the healthcare worker. Successful outcomes cannot be achieved with one of these items – they are all required. The healthcare system is only as strong as its weakest link.

This combination of items can be considered to be one C19 ‘healthcare unit’. Local health organizations need to determine precisely what constitutes a ‘healthcare unit’ and start building as many as required. The number of ‘healthcare units’ needs to exceed the number of anticipated hospitalizations.

Note 2

Understand the virus. The government and healthcare systems need more information about the virus itself in order to make better decisions. For example, a more accurate understanding of symptoms, level of immunity achieved after testing positive, impact on specific health conditions, impact based on age, impact based on race.

Note 3

Develop vaccines and therapeutics (a drug that successfully treats the symptoms or a cure). The time frames for developing vaccines and therapeutics will be subject to the regulations of the country in which they are developed and the country which will buy them. These time frames are typically very long and should be ‘fast-tracked’ in an emergency. However, the time required to develop, test, get multiple approvals, produce on a massive scale and distribute on a massive scale to multiple countries cannot unfold in weeks. It will take many months at best.

Note 4

Relax social restrictions in increments but not completely. If social restrictions are relaxed completely in the absence of a vaccine or therapeutic the number of new daily cases will resume rising. The only scenario where the new cases will not resume rising is where there are no new infections for an extended period of time (and no inbound travel is permitted) or there is a vaccine or therapeutic. Therefore, it’s important to clarify that social distancing is critical but it’s not a solution. Its purpose is to prevent the disease from spreading and buy time until a vaccine or therapeutic is developed.

Governments should clearly communicate (to the general population) that the relaxation of social restrictions will be incremental AND on a trial and error basis and therefore members of the public should plan accordingly. If social restrictions are relaxed and the number of new daily cases resumes rising, social restrictions will need to be tightened again.

As of the date of this article, countries that have moved into phase 2 (like China) have NOT removed all social restrictions. They are doing it incrementally and the results should be monitored by all other countries. Hong Kong recently relaxed the social restriction rules too much and had to resume tighter restrictions.

“Random representative testing” of the population should be used to determine the true penetration of the virus in the population (the percentage of the general population that is infected with the virus) as opposed to just testing people that have developed symptoms and decided to visit a doctor. Governments should not relax social distancing until after they know the penetration rate of the virus in their communities.

Economic activity stops falling during P2 but may not grow significantly. The economy is not likely to resume meaningful growth because the economy is in a ‘holding pattern’ while waiting for Phase 3 (a vaccine or therapeutic). A portion of the population will resume regular activity but it will be nowhere near 100%. The “average monthly income” per person has fallen during P1 so the average person has less money to spend. Further, the confidence of the average person in the short and medium-term is low so they will spend a smaller portion of their smaller “average monthly income”. Many people and businesses will not resume regular economic activity until they have the confidence that comes from being in Phase 3 or beyond.

Note 5

P2 makes it impossible for there to be a V-shaped recovery. It will be a U shaped recovery. The time spent in the horizontal part of the U depends on how quickly vaccines and therapeutics can be widely available and the effectiveness of the government stimulus and the government’s ability to maintain confidence in the outcome for their communities. The countries and regions that have to deal with pandemic first will have a long horizontal line in their “U” recovery because they have to wait for vaccines and therapeutics to be developed while they are already in P1 or P2. Countries that face the pandemic later will benefit from learning from the countries before them as well as having access to the vaccines and therapeutics within a shorter time frame.

PHASE 3

Characterized by: Vaccine or therapeutic is available.
Goal: Resume resume pre P1 economic activity as soon as possible.
How to achieve the goal: Relax social restrictions even further (in increments concurrent with random testing) until they are completely removed. See Note 1.
Economic consequences:
- P3 is NOT 100% back to normal. See Note 2.

Note 1

Relax social restrictions even further in increments (trial and error) and return to normal, however, imported cases still need to be managed so travel restrictions will remain. Governments will need to continue to restrict inbound travel by people that have visited another state, region or country within the previous 30 days that is still in P1 or P2 (otherwise imported cases will rise).

Note 2

Why is P3 not 100% back to normal?

The travel restrictions mentioned above will continue to have an adverse impact on the travel industry.
Even though approved vaccines and therapeutics exist, they may not work 100% of the time for 100% of people and they will not be readily available to the entire population of all countries that need them on day 1 of P3.
100% of the jobs that were lost in P1 and P2 have not been replaced. There is increased economic uncertainty arising from the increase in the national debt that was used to fund various stimulus packages during all phases as well as the “headline risk” created after several months of public announcements about hardship and mass bankruptcies for individuals and businesses during P2.
All sectors of the economy will recover on a “different timetable”. There is no such thing as “everything will be back to normal on date X”.
It’s also likely that some global trading partners will still be in P1 or P2 and will have diminished economic activity so they will not be spending money on goods and services at pre P1 levels from your country even if your country is in P3. In simple terms – the economy is made up of millions of interconnected pieces that interact with each other. The action taken in P1 has “disconnected a big portion of these pieces” and they will not all automatically reconnect themselves just because the government has announced the availability of a vaccine or therapeutic. It’s impossible to identify all of the disconnected pieces and manually reconnect them. Many of them will have to reconnect organically over time.
Rich countries have a massive responsibility to get this under control. The number of deaths resulting from C19 infections in poorer countries could be massive and those numbers are heavily influenced by what rich countries do now. Rich countries may need to consider helping poorer countries to cope with C19 in order to avoid an unprecedented crisis. Many of these poorer also happen to be some of the highest growth economies in the world so slower growth in those economies will also have a negative impact on the global economy.

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