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What we need to start reopening Minnesota’s economy

On Tuesday, I wrote again about the vast economic cost of Minnesota’s fight against the Coronavirus. Plainly, this cannot continue indefinitely, or even for very long. Gov. Walz agrees. In a press conference last Friday, he explained “I’ve said from the very beginning of this, sheltering in place til a vaccine comes is…is not sustainable.”

This prompts two questions: First, if he thinks this, why did he extend the states stay-at-home order (SHO) to May 4th? Second, what does Gov. Walz say we need to do to be able to begin reopening the state’s economy?

Why did Gov. Walz extend the stay-at-home order?

As I mentioned yesterday, the decision to extend the SHO was driven by estimates produced by the latest version of the SARS-CoV-2 (COVID-19) Model produced by the University of Minnesota School of Public Health and Department of Health. The model’s various outcomes are summarized in the slide below:

Scenario 4 – ‘Extending SHO for all (by 4 weeks)’ – was the one Gov. Walz acted on when he extended the SHO. Under this scenario, demand for Intensive Care Unit (ICU) beds will peak at 3,700 on July 13th and 22,000 Minnesotans will die of Covid-19 over the next 16 months (this is a longer forecasting horizon than the ‘Washington model’ which accounts, in part, for the more pessimistic estimates).

You will notice that these are exactly the same outcomes generated by Scenario 3 – ‘Long term SHO for most vulnerable’. This would extend the SHOs for those especially vulnerable to Covid-19, such as older adults and people of any age who have serious underlying medical conditions, but would allow other Minnesotans to get back to work observing CDC safe practices. It would allow for a substantial reopening of the state’s economy.

So why choose Scenario 4 – which continues the lockdown with all its ongoing economic damage – over Scenario 3?

Gov. Walz was asked this at last Friday’s press conference and replied:

Yeah, they’re not wrong and the reason I’m not using Scenario 3 is…Scenario 3 is predicated on two things: ample amounts of PPE and surge capacity, and testing to get there because Scenario 3 gets us to the point where we have set up from the beginning we want to get to; we’re able to test, trace, isolate, and bring as much things back on as we possibly can. So, our point was, and when you see that, again, its…its modelling so its snapshot in time, it shows a trend, we do believe that Scenario 3 is the place we need to go, when we started opening…and thinking about how do we…source the PPE, how do we ramp up the testing to get there, that was part of our thinking. At the time that was put out there and the time we extended the stay-at-home order, we did not have that. And as Mary said, it was to create that time. My goal is that I think the only sustainable place is looking like Scenario 3 in that modelling, and for folks out there who aren’t familiar with that, and its one point in time of all the things we need to do, I’ve said from the very beginning of this, sheltering in place til a vaccine comes is…is not sustainable. We had to figure out a way to first understand, and we’ve learned so much in the last month about this disease, about this virus, is to be able to first and foremost identify who has it, to isolate, trace, to get them and the most vulnerable protected, and as you’re seeing from Commissioner Malcolm, talks about the long term care facilities, come up with new ideas, new ways of doing that, and then start to move people back into the workplace, which we’ve been able to do. That argument about essential workplaces that have figured out how to social distance and not get people sick, should apply to non-essential businesses, is exactly right. If we have that surge capacity which, thanks to Dr. Hicks, his team, Jan and everybody else, we think we’re getting very close to that. So I think their argument and their message, spot on, the difference was being able to get there, and again, I would remind you of this: people who say, again, and the folks on the front line would tell you this, if we just said ‘Lets go back the way we were in January and operating’, we would kill lots of people, especially those on the front line, and, the business leaders I would go on this are telling us this, people are only going to go back to places when they feel it is safe to go back to places. 

During this crisis I have generally found Gov. Walz to be an effective communicator. Here, however, his answer is less than clear. His repeated references to ‘surge capacity’ suggest that hospital capacity – particularly availability of ICU beds – is a key consideration. Indeed, the only difference between Scenario 3 and 4 is in the timing of the peak: under Scenario 3, peak ICU usage comes on June 8th, under Scenario 4 it is delayed to July 13th. It is reasonable to assume that this extra time to build up ICU capacity explains why he chose Scenario 4 over 3.

What does Gov. Walz say we need to begin reopening the economy?

The decision on whether we can start reopening Minnesota’s economy is essentially the same as asking whether we can move from Scenario 4 to Scenario 3.

ICU beds

Under both, we need 3,700 ICU Beds. According to the Minnesota Department of Health, the state currently has 1,222 ICU beds (of which 932 are occupied) and another 1,416 which can be ready in 72 hours for a total of 2,638 beds. This leaves us 1,100 beds short of the capacity needed in either Scenario 4 or Scenario 3. Gov. Walz chose Scenario 4 to give us extra time to build this capacity up, so that should be a priority.

Testing

On April 13th, Gov. Walz said that one condition for reopening the state’s economy was the delivery of 5,000 Covid-19 tests a day. Yesterday, he announced a program that will allow for the diagnostic testing of as many as 20,000 samples per day. The Star Tribune reported:

While it might take a couple of weeks to reach full capacity, the state already has the ability to test as many as 8,000 samples per day now that its public, private and hospital labs are coordinating efforts, said Jan Malcolm, commissioner of the Minnesota Department of Health.

From Scenario 4 to Scenario 3

Gov. Walz says “We do believe that Scenario 3 is the place we need to go”. He is right.

The Governor has set two conditions for moving to Scenario 3. The first – the 5,000 tests a day – looks to have been met, or is very close to it. The second – the ‘surge capacity’ of 3,700 ICU beds – needs some work. To shift to Scenario 3 when the current measures expire on May 4th and get Minnesota moving again, meeting this goal must be a priority.

John Phelan is an economist at the Center of the American Experiment. 

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