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Get Rational with COVID-19

Jul 14-2020   



Public finance and social resources are likely to pour into healthcare in the wake of the pandemic, yet it’s pertinent to prevent such incremental resources from being siphoned off by large hospitals, said Prof. Liu Guoen of the NSD in a speech for a recent seminar by CWM50 (China Wealth Management 50). He’s also a member of the national COVID-19 expert group.

 

After presenting the pandemic’s impact on the society, economy and public healthcare system, he drew attention to the changes that have occurred to the relationship between the medical service system and the macro-economy and analyzed some ways to make more rational the government-led public policies and responses.

 

In previous economic crisis, the healthcare industry seemed to have escaped unscathed and its job creations showed no correlations to economic cycles. But the COVID-19 has proved different: in the US it had brought major markets to knees and concurrently the consumption of medical services had plummeted, to a low point in April before rebounding slightly of late.

 

The idiosyncratic effects of the pandemic manifest mainly in two ways: a sharp increase in people’s risk-averseness that has dealt a huge blow to industries relying on human contacts, with medical services bearing the brunt; the quarantine measures by governments that have reduced both supply and demand. As both individuals and governments are at play, the resultant economic crisis will vary in seriousness depending on the evolution of the pandemic as well as the rational level of coping measures.

 

Researches are generating more and more results that can be used in policy making, e.g. the impact of COVID-19 on the types of consumption goods (service!), death rate among different age groups (the older, the more vulnerable), and COVID-19’s likelihood to stay around for the long run (to consider: tradeoffs between health risks and economic activities).

 

Moreover, reams of scientific data are showing that COVID-19 differs from previous pandemics in two aspects: a high percentage of infected people do not demonstrate symptoms, and among those who do, 81% are of minor symptoms that do not need diagnosis in big hospitals but rather can be treated in community clinics and by home care.

 

Government-driven public policies and coping measures can become more rational by factoring in four issues: First, the long-term aspect of COVID-19 might necessitate normalized management with a long view; Second, the cost constraints entail that economy must develop to provide the financial war chest for fighting the pandemic – the at-all-cost mentality is neither rational nor realistic; Third, the foxy nature of COVID-19 means that public measure must be highly flexible and targeted; And lastly, community clinics should be developed as they are more cost-effective in treating patients of minor symptoms.

Get Rational with COVID-19

Jul 14-2020   



Public finance and social resources are likely to pour into healthcare in the wake of the pandemic, yet it’s pertinent to prevent such incremental resources from being siphoned off by large hospitals, said Prof. Liu Guoen of the NSD in a speech for a recent seminar by CWM50 (China Wealth Management 50). He’s also a member of the national COVID-19 expert group.

 

After presenting the pandemic’s impact on the society, economy and public healthcare system, he drew attention to the changes that have occurred to the relationship between the medical service system and the macro-economy and analyzed some ways to make more rational the government-led public policies and responses.

 

In previous economic crisis, the healthcare industry seemed to have escaped unscathed and its job creations showed no correlations to economic cycles. But the COVID-19 has proved different: in the US it had brought major markets to knees and concurrently the consumption of medical services had plummeted, to a low point in April before rebounding slightly of late.

 

The idiosyncratic effects of the pandemic manifest mainly in two ways: a sharp increase in people’s risk-averseness that has dealt a huge blow to industries relying on human contacts, with medical services bearing the brunt; the quarantine measures by governments that have reduced both supply and demand. As both individuals and governments are at play, the resultant economic crisis will vary in seriousness depending on the evolution of the pandemic as well as the rational level of coping measures.

 

Researches are generating more and more results that can be used in policy making, e.g. the impact of COVID-19 on the types of consumption goods (service!), death rate among different age groups (the older, the more vulnerable), and COVID-19’s likelihood to stay around for the long run (to consider: tradeoffs between health risks and economic activities).

 

Moreover, reams of scientific data are showing that COVID-19 differs from previous pandemics in two aspects: a high percentage of infected people do not demonstrate symptoms, and among those who do, 81% are of minor symptoms that do not need diagnosis in big hospitals but rather can be treated in community clinics and by home care.

 

Government-driven public policies and coping measures can become more rational by factoring in four issues: First, the long-term aspect of COVID-19 might necessitate normalized management with a long view; Second, the cost constraints entail that economy must develop to provide the financial war chest for fighting the pandemic – the at-all-cost mentality is neither rational nor realistic; Third, the foxy nature of COVID-19 means that public measure must be highly flexible and targeted; And lastly, community clinics should be developed as they are more cost-effective in treating patients of minor symptoms.