March 21, 2020 1:29PM

With the Economy in an Induced Coma, No Time to Waste in Bridging the Medical Supply Gap

At the behest of public health officials and politicians, many Americans have submitted —to varying degrees—to the practice of social distancing. The logic behind the push for social distancing is that it will help “flatten the curve.” Flattening the curve is shorthand for slowing the contagion to limit the surge in demand for health care services (hospitals, doctors, nurses, beds, respirators, testing kits, gloves, sanitizers, and other protective gear), which we have learned in recent weeks are in woefully short supply. By distancing ourselves from each other, the rate of contagion is forecast to be more manageable and less likely to strain the health care system to the point of collapse. Fair enough.

Through laws, advisements, and social pressure, the economy has been put into an induced coma to relieve pressure on our medical infrastructure. But, of course, that preemptive behavior carries huge financial and human costs. Government is notorious for touting the benefits and ignoring the costs of the regulations it imposes or the actions it recommends. The concept of maximizing the net benefits is utterly foreign to most policymakers.

As Chris Edwards describes, the economy cannot withstand a prolonged shutdown, and with economic contraction comes worsening despair, destitution, and increased morbidity and mortality rates. The benefits of extreme social distancing may save lives over the next few months, but the costs—in addition to what may become the worst economic contraction the world has ever witnessed—include lost lives, too. Accordingly, it makes no sense to put all the onus on reducing demand for health services—especially when doing so requires our taking actions that will kill people anyway.

It’s only a matter of time before people—especially younger people with less savings to fall back on—start to reckon that social distancing is an inferior choice. If we are to prevent or mitigate this eventuality, we must aim to shorten the period where social distancing is necessary. That can only happen if we ramp up efforts on the medical infrastructure supply side.

Over the past 48 hours, we have seen stories about certain U.S. manufacturers working to convert their factories into facilities to produce badly needed medical supplies, and equipment or shipping companies rerouting and reconfiguring what they deliver and when. But is this really happening on a meaningful scale? Has there been an impact on the supply of masks, gloves, and respirators? Has there been follow through on these stated initiatives?

I haven’t been able to get answers. I’ve inquired with officials who work for major business trade associations in Washington, but have received no responses. Two days ago, Ford Motor Company made noises about reopening shuttered facilities to produce respirators, but the last substantive news story on this matter that I’ve seen was published yesterday in Politico. The story notes:

“[M]anufacturing facilities in the United States are already at 100 percent production capacity and are looking to ramp up by another 15 or 20 percent,” said Jim Jeffries, the senior vice president for public affairs for AdvaMed, which represents medical technology companies. He said in the medical industry, companies are adding third shifts and repurposing production lines, while also looking to other sectors — autos among them — to see if protective equipment can be “retrofitted” to help combat the crisis.

“You’re seeing a really strong industry‐​wide mobilization to the fight,” Jeffries said. “They’re looking at literally every possibility to make sure that we can meet the demand.”

But a spokesperson for General Motors underscored Thursday that there is no concrete plan yet to do anything.

“This is very early,” said GM spokesperson Jeannine Ginivan. “Right now it’s just an internal feasibility study on whether it‘s possible for us to help out in the production of medical equipment.”

This doesn’t sound promising. Of course, for many existing businesses, converting operations to produce these needed commodities doesn’t portend profitability. And without a degree of certainty as to how much will be demanded and for how long, it’s a crapshoot to know how much to invest in production capacity and distribution.

For those and other reasons, business appears slow, even unwilling, to meet the challenge. This statement from the Business Round Table praising the administration’s decision to open a THREE MONTH comment period on the question of whether and which tariffs should or should not be lifted on imports from China speaks to a complete absence of urgency.

While I am not recommending the government (especially THIS government) commandeer factories and other private assets to redirect manufacturing output to bridging the medical supply gap (less drastic inducements, such as tax forgiveness and future tax credit allowances, are available), that redirection has to happen so that everyone can be tested, the sick quarantined, and the healthy set free to begin the long process of resuscitating the economy. The alternative is unimaginable.