On New Year's Eve 2019, the World Health Organization's Country Office in the People's Republic of China was alerted to cases of "viral pneumonia" in Wuhan. This disease has since become known to everyone as COVID-19. As 2020 now ends, many countries are struggling to respond to a second wave (or even a third wave) of COVID-19 infections, through mandatory and voluntary social distancing measures, testing, contact tracing and isolation, border controls, and economic incentives and stimulus measures.
There is now enough evidence, collected across multiple countries, to show that the strategy that results in the lowest public health and economic costs when it comes to COVID-19 outbreaks in rich countries is to go early, go hard and go long enough to suppress infections, allowing testing and contact tracing to stop clusters of infections becoming major outbreaks.
Let's look at the difference between the responses in Australia, in particular Victoria, and western Europe.
In Victoria, social distancing recommenced in the second half of June in response to community transmission originating from a hotel quarantine breach. Widespread testing and contact tracing, the reintroduction of social distancing and the mandated use of masks outside slowed the growth rate of new infections. In August more stringent measures (including a curfew and travel-distance limits from home) were introduced, and all workplaces were closed except for essential activities.
Victorian COVID-19 fatalities peaked in early September. Most fatalities were among elderly people living in aged or retirement homes, as "group distancing" proved unsuccessful despite protocols on visiting the elderly in these homes. By mid-September there was a substantial fall in new daily cases, from a peak of 687 to less than 50, which was attributable to stringent restrictions. Social distancing measures were progressively relaxed according to a widely available "Roadmap for Reopening", predetermined by the 14-day Melbourne and state averages of new daily cases. On December 6 the state was declared "COVID normal", with no community transmission since the end of October (see our timeline graphic here).
The first wave of COVID-19 infections in western Europe was also effectively suppressed with stringent social distancing measures progressively introduced in March and April. These measures were incrementally relaxed in June and July, while new daily case numbers were still in the hundreds.
For effective contact tracing, each positive case, on average, requires over 30 contacts to be traced within 48 hours. Consequently, new daily cases in western Europe during the northern summer were such that testing and contact tracing were insufficient to effectively suppress infections. Exponential growth in infections resumed from late July to August, and new daily cases in large western European countries exceeded 10,000 per day by the end of October.
As of November 1, per capita new daily cases (averaged over seven days and per 1000 people) were as follows: France 0.7, Germany 0.2, Italy 0.5, Spain 0.4 and the United Kingdom 0.3. By comparison, at its peak, new daily infections during Victoria's second wave were less than 0.1 per thousand people (see our comparison graphic here). In response to the high and increasing new daily cases in western Europe, various forms of "stay-at-home" measures were instituted in France, Italy, Spain and the United Kingdom. Germany implemented a series of national social distancing measures and then a national lockdown that is still ongoing.
Another area of contrast between the Australian and western European response has been the issue of border controls. Early implementation of strong border controls, with 14 days of supervised hotel quarantine for all overseas travellers since March, helped Australia to successfully suppress its first wave. Within Australia, states which succeeded in eliminating community transmission subsequently implemented internal border controls to prevent reinfection from other states, including from Victoria during its second wave. By contrast, international and internal border controls in western Europe have been more relaxed, with little or no supervised quarantine.
Both jurisdictions also made some similar mistakes. While the Victorian Roadmap presented decision rules for relaxing social distancing, no such details were publicly provided for the introduction of Victoria's measures. By July 22, there was evidence that existing social distancing measures were insufficient to "flatten the curve", with the 14-day average of new daily cases at about 400. A delay in implementing sufficiently stringent social distancing measures in Victoria until early August, and in western Europe in September when government experts recommended immediate and more stringent measures, resulted in larger second waves that, in some countries such as the United Kingdom, have not yet been successfully suppressed.
So what do these contrasting results mean when it comes to the health and economic costs incurred by both jurisdictions?
Based on Australian Bureau of Statistics data at a Victorian level, we modelled the total economic costs of implementing social distancing. We estimated Victoria's economic costs of highly stringent social distancing from August 5 to October 27 at some $20 billion. Costs not included in our estimate are increased non-COVID-19 morbidities, associated welfare losses from social isolation (e.g. poor mental health) and a decline in worker skills and expertise from an extended period of unemployment.
However, the counterfactual to imposing sufficiently stringent social distancing measures to suppress COVID-19 infections is the economic losses and public health costs of inadequate suppression. Using epidemiological models we constructed, informed by Victorian data, we found that the economic costs of inadequate social distancing measures would have resulted in much larger economic costs of between $140 billion and $380 billion.
The economic benefits of successful COVID-19 control are shown in a cross-country comparison of the economy and public health costs, as measured by OECD data showing the change in quarterly GDP from the fourth quarter of 2019 to the end of the third quarter of 2020, and COVID-19 fatalities per million people (see our comparison chart here). For Australia, New Zealand and the five largest western European countries (France, Germany, Italy, Spain, and the United Kingdom) we find a strong negative relationship between the cumulative change in quarterly GDP and the cumulative COVID-19 fatality rate. This observation is supported by an estimate of a statistically significant and negative causal relationship between the quarterly fatality rate and quarterly GDP growth for these seven countries.
The Australian (including Victoria) and the western European responses to suppressing a second wave of COVID-19 provide important lessons. These include:
To read our full research paper, click here.
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