What will be the actual cost of Ebola? ( Mike Stone/Getty Images)
Just some quick thoughts from my overactive mind.
We are about to enter flu season. This will test the public’s knowledge about viruses, specifically whether most of us will take a step back and remember the odds of catching the flu are thousands of times greater than contracting Ebola.
But maintaining balance, perspective and low-risk reality are becoming increasingly difficult for Americans to accept when the high-consequence part of the equation is so unsettling. A U.S. health care worker, Nina Pham, a nurse at Texas Health Presbyterian Dallas who was treating Thomas Eric Duncan on U.S. soil, has tested positive with Ebola. That was not supposed to happen.
Americans are struggling with mixed messages. The Centers for Disease Control and Prevention urges caution and says the virus is controllable in the U.S. Worldwide, the World Health Organization now predicts that there could be up to 10,000 news cases of Ebola per week in two months.
Yes, these are worldwide numbers and mostly from West Africa, but people already are calculating the economic and societal and political impacts.
The WHO warns that the spread of the virus could lead to failed states, adding that the cost of panic is “spreading faster than the virus”. Also, the Insurance Information Institute just published its best case/worst case scenarios to gameplay the potential ramifications the spread of Ebola might have for the insurance industry. Here are a few talking points for the United States through the eyes of insurers.
Even in the unlikely event that the Ebola virus spreads to infect tens of thousands of adults in the United States, the financial impact will likely be quite manageable. This is because perhaps one-third of adults in the U.S. have life insurance only through their employment, and the amount is typically equal to one year’s income. Another one-third have individual life insurance, with the average death benefit in the $200,000 range. In a typical year life insurers pay about 2 million death claims, so another 100,000 would be only 5 percent more than typical. Moreover, most life insurers are well capitalized, and even the largest life insurers have reinsurance to prevent a surge in death claims from imperiling their solvency, so that the net effect would likely be, at most, a reduction in the profit they would otherwise record.
The cost of caring for Ebola cases would likely be at the high end of health insurance claims, and the effect on health insurers would depend on the number of people suspected of being infected. Many people would need to be tested to see whether they have contracted the virus, and the cost of isolation of those affected could be substantial. Note that some individuals may have no health insurance, as was the case with the index (first) patient who died of Ebola at a Dallas hospital on October 8. In such cases, treatment costs will likely be borne outside the private health insurance system.
Still, this poses tough decisions for a medical community that has been raked over the coals for not immediately recognizing the signs of Ebola in Thomas Eric Duncan and in allowing a health care worker here to somehow became infected after treating Duncan.
How will doctors and nurses respond to patients who arrive at community hospitals with a runny nose and a fever? And at what point will public health decisions be influenced by straight up economics?
Obviously, I’m jumping ahead. I expect U.S. health officials will contain Ebola. The CDC already has changed its protocols and I’m guessing that the level of caution will be ramped up several levels. Most people who will show up at hospitals with flu-like symptoms probably have the flu or at least a common cold. But consider the steps hospitals and even doc-in-the-box clinics now will take to err on the side of caution.
I’m guessing the question – have you traveled to or from West Africa recently or come in contact with anyone who has – will be asked, and asked and asked.
In past years, doctors and nurses would not have asked that question to someone with a runny nose and fever or certainly not probe deeper for an answer. Dallas County estimates the cost of responding to Ebola has surpassed $1 million. I wonder how much the total cost will be even if the outbreak in the U.S. stays in single digits.