Funding Public Health: Who Pays for Pandemics?

July 7th, 2016 by Trudy Henson

by Trudy Henson, CHHS Public Health Program Manager

As the world continues to watch the Zika virus epidemic unfold—Spain recorded its first case of sexually-transmitted Zika virus this week—and Congress attempts to pass a $1.1 billion dollar bill to help fund the fight against Zika, people are increasingly asking: who pays for pandemics?

This week, two prominent articles sought to answer that question. In a paid post to The New York Times, the Bill and Melinda Gates Foundation wrote about the importance of preparing for pandemics. At the heart of that preparation—the “vital” key to everything from collaboration, research, and emergency preparedness—is financing. On July 1st, World Bank Group President Jim Yong Kim wrote that the Zika virus highlights how “the world remains ill-prepared for a fast-moving virus.” One reason behind that? Proper funding to stop the spread of a pandemic.

The issue of funding is critical. As Kim’s editorial points out, a number of large pandemics start in developing countries with “weaker health systems and a lack of investment in preparedness.” But as we’ve seen with a number of recent pandemics—from H1N1 to Ebola—that’s not where they end. As Kim states, “pandemics are a global security threat, and they demand a truly global response.”

One solution is the World Bank’s Pandemic Emergency Financing Facility—a newly-created entity that works closely with the World Health Organization to fill a “critical financing gap” and allow the world to “automatically send money, medical teams and lifesaving supplies to any of the 77 poorest countries to prevent a major outbreak from spreading and escalating.”

A quick response to an identified emerging disease is critical, but so is preparedness, which can also be costly. The Bill and Melinda Gates Foundation cites an estimated cost of $4.5 billion a year to properly protect against pandemics globally. However, even in the U.S., where public health preparedness and emergency planning is a national focus, “spending cuts have diminished the available resources.”

The alternative to not funding preparedness though, is even more costly, and not just in lives lost. As has been well-documented, the three Western African countries hit hardest by Ebola, were economically devastated by the outbreak and are still struggling to recover. Estimates for the global economic impact of an outbreak similar to the 1918 Spanish Influenza puts the global loss at $3 trillion. Even pandemics with lower mortality rates—such as SARS, MERS, or H1N1—can have a significant impact in developed countries. In the travel industry alone, Asia-Pacific and North American air carriers lost an estimated $7 billion during the 2003 SARS outbreak. The indirect costs of a pandemic—such as work absenteeism and productivity, especially if school closings are involved, can be difficult to measure. However, a 2009 Brookings Institute study estimated that closing schools for just two weeks—an oft considered measure for severe influenza or respiratory pandemics—could result “in between $5.2 billion and $23.6 billion in lost economic activity.”

Currently, the World Bank estimates Zika will globally cost $3.5 billion in 2016. That estimate does not include any of the downstream costs of the virus, such as the strain put on health systems and families from the severe impairment caused by microcephaly. (One source estimates this can cost a shocking $10 million over a lifetime; another estimates between $1 million and $10 million). Furthermore, with the virus’ rapid global spread and no vaccine readily available, such costs can be expected to continue in future years.

As Baltimore City Health Commissioner Dr. Leana Wen has said, “Zika virus is a disease of poverty,” affecting our most vulnerable populations. With an estimated 2,500 cases of Zika-caused microcephaly in Brazil this year alone, the cost of this pandemic is already high—not simply in terms of dollars, but in lives affected. Who pays for pandemics? Outbreak after outbreak has shown us that when we aren’t prepared, everyone does.

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