Month: April 2020
Is there a Hawaii heterogeneity?
Via Michael A. Alcorn, the vertical axis refers to new cases, here is the underlying code. Or if you care about text:
Hawaii Department of Health officials said today that the state’s tally of coronavirus cases has risen to 553, up 12 from Thursday.
Of all the confirmed cases in Hawaii since the start of the outbreak, 48 have required hospitalizations, with three new cases reported today, health officials said.
The state’s coronavirus death toll stands at nine, unchanged from Thursday. Six of the deaths were on Oahu, while three were in Maui.
The population of Hawaii is about 1.4 million. Three days ago, Hawaii was the lowest infection rate in the United States, but of course more and better data are needed. We’ll see, with the passage of time, if this remains a true heterogeneity. But do note this:
It is also noteworthy that Hawaii tests for coronavirus at a considerably higher rate than most states. According to data compiled by Vox, Hawaii continues to rank among the top 10 states for testing per capita, which suggests Hawaii’s infection rate may be more accurate than rates reported by some other states.
Developing…
What I’ve been reading
1. Elizabeth A. Fenn, Pox Americana: The Great Smallpox Epidemic of 1775-82, quite a good book.
2. Louis Galambos with Jane Eliot Sewell, Networks of Innovation: Vaccine Development at Merck, Sharp and Dohme, and Mulford, 1895-1995. Imagine a book with both Vannevar Bush and Maurice Hilleman as leading and indeed intersecting characters. How is this for a sentence?: “Hilleman had spent his boyhood on a farm on which the German-American tradition was to “work like hell and live by the tenets of Martin Luther.””
3. John Duffy, The Sanitarians: A History of American Public Health. A little boring, and not conceptual enough, but is anything on this topic entirely boring at the current moment in time? Nonetheless this is a very useful overview and survey of public health issues in American history, and so I do not hesitate to recommend it.
4. Robert P. Saldin and Steven M. Teles, Never Trump: The Revolt of the Conservative Elites. Remarkably fair-minded and substantive, here is my blurb: “”Who are the Never Trumpers, what do they want, and what are their stories? Robert P. Saldin and Steven Teles have produced the go-to work on a movement that will likely prove of enduring influence in American politics.” Here is a relevant Atlantic article by Saldin and Teles. Recommended.
5. Anne Enright, Actress: A Novel. A subtle Irish story of a woman telling the tale of her now-departed famous, charismatic mother and her career in the theater. Unpeels like an onion as you read it, and reveals successively deeper layers of the story, it would make my “favorite fiction of the year” list pretty much any year. But please note it has not have the “upfront attention-grabbing style” that many of us have been trained to enjoy.
Peer Review of “COVID-19 Antibody Seroprevalence in Santa Clara County, California”
Here are 2300 words from Balaji, self-recommending. Here is the original piece. Balaji starts with:
The high reported positive rate in this serosurvey may be explained by the false positive rate of the test and/or by sample recruitment issues.
I look forward to posting more on this.
Ahem
A widely followed model for projecting Covid-19 deaths in the U.S. is producing results that have been bouncing up and down like an unpredictable fever, and now epidemiologists are criticizing it as flawed and misleading for both the public and policy makers. In particular, they warn against relying on it as the basis for government decision-making, including on “re-opening America.”
“It’s not a model that most of us in the infectious disease epidemiology field think is well suited” to projecting Covid-19 deaths, epidemiologist Marc Lipsitch of the Harvard T.H. Chan School of Public Health told reporters this week, referring to projections by the Institute for Health Metrics and Evaluation at the University of Washington.
Others experts, including some colleagues of the model-makers, are even harsher. “That the IHME model keeps changing is evidence of its lack of reliability as a predictive tool,” said epidemiologist Ruth Etzioni of the Fred Hutchinson Cancer Center, home to several of the researchers who created the model, and who has served on a search committee for IHME. “That it is being used for policy decisions and its results interpreted wrongly is a travesty unfolding before our eyes.”
…The chief reason the IHME projections worry some experts, Etzioni said, is that “the fact that they overshot” — initially projecting up to 240,000 U.S. deaths, compared with fewer than 70,000 now — “will be used to suggest that the government response prevented an even greater catastrophe, when in fact the predictions were shaky in the first place.”
Here is the full story, from StatNews, by Sharon Begley with assistance from Helen Branswell, two very good and knowledgeable sources. Via Matt Yglesias.
To be clear, I am (and always have been) fully aware that there are more nuanced epidemiological models “sitting on on the shelf,” just as is true for macroeconomics and many other areas. But I ask you, where are the numerous cases of leading epidemiologists screaming bloody murder to the press, or on their blogs, or in any other manner, that the most commonly used model for this all-important policy analysis is deeply wrong and in some regards close to a fraud? Yes I know you can point to a few tweets from the more serious people, but where has the profession as a whole been? Who organized the protest letter and petition to The Wall Street Journal?
And to be clear, I have heard this model cited and discussed in many (off the record) policy discussions, this is not just something you can pin on the Trump administration narrowly construed (though they are at fault as well).
Friday assorted links
1. Trying to re-open a restaurant in Wuhan (Bloomberg). And why is there less panic in China? And the coronavirus culture that is Maryland.
2. Covid-19 occupational risk scores (not sure how much information those are based on).
3. Patrick Wolff and Jason Tepperman on macroprudential business interruption insurance.
4. Why isn’t India doing worse?
5. The virus chasers of Massachusetts (NYT).
6. Profile of Alex Berenson, contrarian.
7. Positive Remdesivir results. And criticism of said report.
8. Is the golden age of TV over, and if so why? (FT)
9. The “implicit temporary deregulation” of OSHA — good or bad? What would gdp be if OSHA were right now exercising its intended powers?
10. How the wealthy are making do without staff, including a cameo by Martha Stewart (WSJ).
11. Some skeptical results on BCG vaccines.
12. New estimates on population prevalence, much higher than reported cases.
13. ““Just realised my soap wasn’t working because it’s literally a block of cheese,” she wrote.”
What should I ask Glen Weyl?
I will be doing a Conversation with him, mostly about his ideas on Covid-19 response and testing, though we will cover other topics as well. So what should I ask him?
“Social Distancing is Working so Well!”
How do you feel about that statement? I take this as one psychometric test.
If your reaction is: “My goodness, these are tragic times but it is splendid and noble how we all can come together and sacrifice for a common endeavor!”…well…
…you have failed my test and I will suspect a wee bit of mood affiliation. Most likely it is bad news if the relative safety (for some) of the current moment comes from social distancing. Because at some point social distancing must end, or at least be significantly curtailed, and then a higher danger level may well reemerge.
Possibly you have inside information that a cure will be ready next week, but somehow I doubt it. You are happy because you like something about the process.
Alternatively, if you hear “social distancing is working so well!” and immediately feel a deep sense of foreboding, and begin to calculate whether good short-term results are correlated with better or worse long-term results. And then you calculate how how long the distancing can last for, due to governmental budget constraints, and then try to figure out what kinds of progress we might make in the meantime while the distancing lasts, and then start worrying about how reliant on social distancing we are becoming…
…But then you undertake a second-order calculation about how the greater danger spurred by the forthcoming decline in social distancing also might spur innovation…
And then you think “would it not be better if the current progress came from a more sustainable source, what might that be, how about faster than expected herd immunity amongst a relatively small group of heterogeneous super-spreaders, now what is the chance of that?”…
…and finish your analysis confused…
Then you are my kind of weirdo.
We are living in a time of psychometric tests.
Devon Zuegel on togetherness
When we come out of this, I expect people will value in-person even more, but not in the sense that we’ll spend more time with each other in-person but rather that we put it on more of a pedestal. It’ll be treated with a lot more reverence and importance, which means it’ll be a strong signal to choose to spend time physically with someone when you could more easily spend time virtually. It’ll feel more important but also more scarce and special.
I’ve seen a preview of this with my team, which was already almost all remote before this anyways. We spend less time physically with each other since we’re all working from different cities, but when we are together we are more focused on “making the most of it”. The one week every six months we’re together, we’re very careful to use the time to get to know each other, choosing to deprioritize real work those weeks. This means that the way we relate to each other is very intentional and self-conscious, rather than more of an organic growth of the relationship that happens by just having each other ambiently in the background all the time. It works well, and over the course of working with them over time I’ve come to feel extremely close to them. But it means that everything had to be much more explicit, and that we’ve had to do extra work to develop our own new norms rather than getting to default to what’s normal. That said, this has major perks too, because we get to reinvent as we go along!
Those are two paragraph from my email.
Will the coronavirus make the digital divide worse?
That is the topic of my latest Bloomberg column, here is one excerpt:
Now consider issues beyond specific user groups. The U.S. will almost certainly need to introduce a “track and trace” system, using information technology, preferably with privacy safeguards. One version of this idea uses geolocation methods, which tracks where people are in physical space and sends individuals a text message if they come into close contact with others diagnosed with Covid-19.
That technology requires participants to have a smartphone. The federal government probably will not mandate smartphone usage, which would both be politically unpopular and difficult to enforce. Nonetheless, businesses are likely to turn to such schemes to increase workplace safety. But again, exactly who already owns or afford a smartphone? Some of the jobs with the closest physical contact, such as service jobs, employ relatively low paid workers.
Companies may well decide to help workers buy smartphones, perhaps with government subsidies too. But that would then make having a smartphone a job requirement, including in the retail and public sectors.
This would create a new and in some ways more serious digital divide. Imagine you want to visit your local shopping mall. Its owners might require that you subscribe to one of the Covid-19 tracing apps. Or imagine not being able to get your license renewed without a smartphone certifying your health status.
All of a sudden the U.S. will have a new segregation — between those who have smartphones and those who don’t. If you’re on the wrong side of that divide, many places and services will be hard if not impossible to reach.
And to close:
It is plausible that the U.S. could end up with 10% or more of the population exiled from many key institutions of American life — simply because they lack the right kind of technology.
Don’t get me wrong; the digital divide deserves the additional attention soon to come its way. The trick will be ensuring that any proposed solutions don’t just trade one kind of divide for another.
I can’t even figure out how to work those parking spots that are “app only” for the parking meter. Pity me!
Fast Grants, a project of Emergent Ventures against Covid-19, status update
As you may recall, the goal of Fast Grants is to support biomedical research to fight back Covid-19, thus restoring prosperity and liberty.
Yesterday 40 awards were made, totaling about $7 million, and money is already going out the door with ongoing transfers today. Winners are from MIT, Harvard, Stanford, Rockefeller University, UCSF, UC Berkeley, Yale, Oxford, and other locales of note. The applications are of remarkably high quality.
Nearly 4000 applications have been turned down, and many others are being put in touch with other institutions for possible funding support, with that ancillary number set to top $5 million.
The project was announced April 8, 2020, only eight days ago. And Fast Grants was conceived of only about a week before that, and with zero dedicated funding at the time.
I wish to thank everyone who has worked so hard to make this a reality, including the very generous donors to the program, those at Stripe who contributed by writing new software, the quality-conscious and conscientious referees and academic panel members (about twenty of them), and my co-workers at Mercatus at George Mason University, which is home to Emergent Ventures.
I hope soon to give you an update on some of the supported projects.
Thursday assorted links
1. Nicaragua still has a full calendar of sports (NYT).
2. An alternating lockdown strategy.
3. Vox on the Watney Stapp Mercatus mask plan.
4. Derek Lowe on vaccine prospects.
5. Will coronavirus change the proper CPI bundle?
6. “This paper argues that daily ‘universal random testing’, as recently proposed by Paul Romer, is not likely to be an effective tool for reducing the spread of Covid-19 and resuming economic activity. We find that more than 21% of the population would need to be tested every day to reduce the Covid-19 reproduction rate (R’) to 0.75, as opposed to 7% as argued by Romer. We show this using a corrected method for calculating the impact of an infectious person on others, when testing and isolation takes place. Our calculation allows for asymptomatic cases. Instead we propose ‘stratified periodic testing’ as an alternative strategy.” Link here.
7. Why is Detroit worse than Baltimore? And is there also a Brazilian heterogeneity? (limited information, however)
8. JPMorgan reopening plan, involves building herd immunity among the young. This is where the discussion will be headed soon.
9. How well did Italy do lowering R0 through lockdown? An informal estimate, but very important and underdiscussed.
11. Ongoing chart of Covid-19 deaths in Sweden, also accounting for reporting delays.
12. Who is this helping? (NYT): “Amazon said Wednesday that it would temporarily halt its operations in France after a court ruled the company had failed to adequately protect warehouse workers against the threat of the coronavirus and that it must restrict deliveries to only food, hygiene and medical products until it addressed the issue.”
13. YouTube talk by Sweden’s chief epidemiologist (have not heard it yet).
When Will The Riots Begin?
I was surprised when Trump won. The economy was doing well, Trump had charisma but was erratic and made what seemed like many missteps (like disparaging people in the military) that it didn’t seem plausible he could win. Yet, he plowed through the Republican primaries and gathered such a large and powerful base of support that people like Ted Cruz and Lindsey Graham, who have good reasons to hate his guts, even they kowtowed. I don’t want to revisit the debates about why Trump won but one of the reasons was that his base felt disrespected by coastal and media elites–their religion, their guns, their political incorrectness, their patriotism, their education, their jobs–all disrespected.
And now maybe it is happening again. From the point of view of the non-elites, the elites with their models and data and projections have shut the economy down. The news is full of pleas for New York, which always seemed like a suspicious den of urban iniquity, but their hometown is doing fine. The church is closed, the bar is closed, the local plant is closed. Money is tight. Meanwhile the elites are laughing about binging Tiger King on Netflix. It doesn’t feel right. I can understand that or feel that I must try to understand that.
Here’s a picture from a protest in Ohio. It wasn’t a large protest, about 100 people, but they look pretty angry. They want to reopen the economy. 
Photo: Joshua Bickel.
Columbus Dispatch: Kevin Farmer of Cincinnati climbed to the top of the Statehouse steps with his bullhorn to lead the protesters in a series of chants.
“Some say that we’re actually causing havoc or putting lives in danger right now — but actually they’re putting my livelihood in danger and others because we’re laid off during this pandemic,” Farmer said to the crowd.
Farmer told The Dispatch that he has been laid off from his job at Cincinnati Metropolitan Housing, and said his employer will contact him when it is OK to return to work.
Farmer said he hoped DeWine would see the dissent caused by the demonstration, and allow Ohioans to get back to their jobs.
“Don’t Mike DeWine supposed to be a Republican (sic)? Don’t he believe in less government? Small government?” Farmer said.
“He has an obligated right to get us back to work, because if not, what do you think Americans are gonna go through?”
Farmer also led the demonstrators in a series of “When I say tyrant, you say Mike DeWine” chants, among others.
Another demonstrator, John Jenkins of Pleasantville, was bearing an upside down American flag, traditionally a distress signal.
“Ohio is currently under distress,” Jenkins said. “The United States is generally under distress.”
…Joe Marshall, who did not identify where he was from, said he was representing Anonymous Columbus Ohio.
Marshall said he chose to demonstrate against DeWine because he believes DeWine and Acton are being led astray by the World Health Organization, which he said is corrupt and peddling false information to local governments.
“Their numbers here are what these clowns are going by,” Marshall said. “Even if they are right, they don’t justify” enforcing a stay-at-home order.
“These are common sense things,” Marshall said. “The problem is, Mr. DeWine doesn’t want to do common sense things, he wants to listen to Amy [Ohio Health Director Dr. Amy Acton, AT], and Amy gets her orders from the World Health Organization.”
Another protestor from a follow-up:
Columbus Dispatch: “We have children to feed, businesses to run, employees to pay, and Ohio must end this shutdown now. Those with high-risk categories and compromised immune systems can shelter safely at home while the rest of us can exercise our constitutional liberties to work and take care of our businesses and children.
“Patriots who love and respect our liberties and the Constitution are sick and tired of the fear-mongering while the governor and (state Health Director) Dr. (Amy) Acton continue to hide the numbers from the public.”
As Tyler put it yesterday, “America is a democracy, and the median voter will not die of coronavirus.” Solve for the equilibrium.
Addendum: In an excellent historical piece, Jesse Walker at Reason notes that cholera riots were common in Europe in the 19th century. Respect also played a role:
The more high-handed the ruling classes were, the more likely they were to be targeted by rumors and revolt. The riots persisted longest, Cohn writes, “where elites continued to belittle the supposed ‘superstitions’ of villagers, minorities, and the poor, violated their burial customs and religious beliefs, and imposed stringent anti-cholera regulations even after most of them had been proven to be ineffectual. Moreover, ruling elites in these places addressed popular resistance with military force and brutal repression.
PPE Shortages and the Failure to Increase Prices
Ryan Peterson, Flexport Founder and CEO, has an excellent piece on Why There Aren’t Enough Masks, and How to Get More. One part of the problem is a lack of working capital brought about in part by a fear of raising prices:
Typically, buyers of PPE, whether hospitals or medical distributors, expect to place purchase orders and only pay for products upon delivery, or even later.
But when demand surges by 20x, vendors simply don’t have the money required to scale production. Factories need money to add production lines, buy raw materials, and hire workers. They need down payments so they can move.
Buyers prefer to pay upon receipt of goods for two reasons. The first is to ensure quality: They can refuse payment if the goods they receive don’t meet their standards. The second reason is they prefer to keep cash on their balance sheets, rather than paying vendors in advance.
In ordinary times, sellers will accept this. But with the entire world desperate to buy PPE, manufacturers know they can ask for a down payment and get it. Other more aggressive entities are paying down payments, so if US buyers won’t, they don’t get the supply.
American medical distributors, governments, and even hospital chains, by contrast, have been less willing, or less able, to adapt to the new reality of paying vendors upfront, at higher prices than they’d contracted.
At the same time, US distributors can’t pass higher prices through to hospitals in the midst of the crisis, for fear of being accused of profiteering. Foreign governments and healthcare systems have been less encumbered by this, showing a willingness to pay more and pay faster to get first in line.
There was a recent debate on twitter about so-called price-gouging. It was said that the argument for raising prices is weak when the elasticity of supply is low. That’s not necessarily true. First, in an emergency even a small increase in quantity can be very valuable so high prices can have high utility payoffs. Second, vendors face credit market frictions and capital constraints. Borrowing in an emergency is often not possible–this means that asset balances matter and transferring wealth from buyers to firms can ease financial constraints. Put another way, it’s the short run increase in price which allows long run elasticities to increase. Elasticity is endogenous to pricing.
Hat tip: Paul Graham.
One reason why food intended for restaurants is not reallocated to supermarkets
Nutrition labeling also frequently doesn’t comply with Agriculture Department and Food and Drug Administration guidelines for consumer sales, said Geoff Freeman, president and CEO of the Consumer Brands Association, a trade organization for the consumer packaged goods industry. A company that sold hamburger buns to major fast food outlets could try to pivot to retail, but that entails changing packaging on the fly, a relaxation of labeling requirements and new distribution contracts.
Here is a longer story, about how supermarkets are changing, by Laura Reiley, interesting throughout. I’ll say it again: America’s regulatory state is failing us.
Supply curves slope upward, Switzerland fact of the day, and how to get more tests done
Under Swiss law, every resident is required to purchase health insurance from one of several non-profit providers. Those on low incomes receive a subsidy for the cost of cover. As early as March 4, the federal health office announced that the cost of the test — CHF 180 ($189) — would be reimbursed for all policyholders.
Here is the article, that reimbursement is about 4x where U.S. levels had been. The semi-good news is that the payments to Abbott are going up:
The U.S. government will nearly double the amount it pays hospitals and medical centers to run Abbott Laboratories’ large-scale coronavirus tests, an incentive to get the facilities to hire more technicians and expand testing that has fallen significantly short of the machines’ potential.
Abbott’s m2000 machines, which can process up to 1 million tests per week, haven’t been fully used because not enough technicians have been hired to run them, according to a person familiar with the matter.
In other words, we have policymakers who do not know that supply curves slope upwards (who ever might have taught them that?).
The same person who sent me that Swiss link also sends along this advice, which I will not further indent:
“As you know, there are 3 main venues for diagnostic tests in the U.S., which are:
1. Centralized labs, dominated by Quest and LabCorp
2. Labs at hospitals and large clinics
3. Point-of-care tests
There is also the CDC, although my understanding is that its testing capacity is very limited. There may be reliability issues with POC tests, because apparently the most accurate test is derived from sticking a cotton swab far down in a patient’s nasal cavity. So I think this leaves centralized labs and hospital labs. Centralized labs perform lots of diagnostic tests in the U.S. and my understanding is this occurs because of their inherent lower costs structures compared to hospital labs. Hospital labs could conduct many diagnostic tests, but they choose not to because of their higher costs.
In this context, my assumption is that the relatively poor CMS reimbursement of COVID-19 tests of around $40 per test, means that only the centralized labs are able to test at volume and not lose money in the process. Even in the case of centralized labs, they may have issues, because I don’t think they are set up to test deadly infection diseases at volume. I’m guessing you read the NY Times article on New Jersey testing yesterday, and that made me aware that patients often sneeze when the cotton swab is inserted in their noses. Thus, it may be difficult to extract samples from suspected COVID-19 patients in a typical lab setting. This can be diligence easily by visiting a Quest or LabCorp facility. Thus, additional cost may be required to set up the infrastructure (e.g., testing tents in the parking lot?) to perform the sample extraction.
Thus, if I were testing czar, which I obviously am not, I would recommend the following steps to substantially ramp up U.S. testing:
1. Perform a rough and rapid diligence process lasting 2 or 3 days to validate the assumptions above and the approach described below, and specifically the $200 reimbursement number (see below). Importantly, estimate the amount of unused COVID-19 testing capacity that currently exists in U.S. hospitals, but is not being used because of a shortage of kits/reagents and because of low reimbursement. This number could be very low, very high or anywhere in between. I suspect it is high to very high, but I’m not sure.
2. Increase CMS reimbursement per COVID-19 tests from about $40 to about $200. Explain to whomever is necessary to convince (CMS?…Congress?…) why this dramatic increase is necessary, i.e., to offset higher costs for reagents, etc. and to fund necessary improvements in testing infrastructure, facilities and personnel. Explain that this increase is necessary so hospital labs to ramp up testing, and not lose money in the process. Explain how $200 is similar to what some other countries are paying (e.g., Switzerland at $189)
3. Make this higher reimbursement temporary, but through June 30, 2020. Hopefully testing expands by then, and whatever parties bring on additional testing by then have recouped their fixed costs.
4. If necessary, justify the math, i.e., $200 per test, multiplied by roughly 1 or 2 million tests per day (roughly the target) x 75 days equals $15 to $30 billion, which is probably a bargain in the circumstances.
5. Work with the centralized labs (e.g., Quest, LabCorp., etc.), hospitals and healthcare clinics and manufactures of testing equipment and reagents (e.g., ThermoFisher, Roche, Abbott, etc.) to hopefully accelerate the testing process.
6. Try to get other payors (e.g., HMOs, PPOs, etc.) to follow CMS lead on reimbursement. This should not be difficult as other payors often follow CMS lead.
Just my $0.02.”
TC again: Here is a Politico article on why testing growth has been slow.