Thursday, April 9, 2020

Resilience and the Total Cost of Coronavirus

In my mind, I've been beating the drum of more resilience in our systems for a while, but a quick check of the page with Windows Control-F only shows the word twice, in my article on toilet paper and chicken wings.  Maybe it's just in my mind and I haven't talked about it here so much as with other people or I'm just seeing the same problem of our systems being too specialized over and over again.

Just this weekend, I saw that dairy farmers were dumping milk for the same reason there's glut on restaurant chicken wings and a shortage of grocery store toilet paper.  The retail stores are short of milk and milk products but the restaurant and service sector is overflowing with the stuff and the system can't adjust fast enough.  Today I heard many livestock ranchers are in a double bind, too. Smithfield, the giant meat processor (bacon, ham, sausages...) closed its processing plant in Sioux Falls, South Dakota. 
Smithfield harvests more pigs per year than South Dakota's roughly 900 hog farmers raise, which means its closure will have ripple effects across the region, reaching into southwestern Minnesota and northeastern Iowa, said Glenn Muller, executive director of the South Dakota Pork Producers.

Muller estimates Smithfield harvests roughly 5 million hogs a year, or 19,000 to 20,000 a day.

"That’s a huge, huge concern if we lose that capability," Muller said. "To not only our producers but to maintain that food supply."
Will all those 20,000 hogs per day go to waste?  Beef producers are also facing a pinch.  Feed is going up in price, prices for the cattle are going down and they're afraid of having cattle on hand and no place to sell it to.  The Midwest is in the midst of planting season and is worried they can't plant enough and won't be able to get enough help to harvest it.  It seems likely that food shortages are coming. 

It seems to me that the economic damage being wrought here by the Kung Flu dramatically overshadows the health damages.  Don't get me wrong; it's clearly a tragedy that nearly 16,500 people in the country have died from the disease, I just wouldn't be surprised if 5 to 10 times more than that die as a result of our reaction to it.

At an "away game", a comment to Borepatch, I noted my (most likely rather unusual) way of looking at this.
The total annual death rate is around 7800 peeps/day (2018 data from CDC) - which includes the flu. Not all of those are in hospitals because some are fatalities or suicides cleaned up by first responders, but most are hospitalized. Suicides and injuries account for about 680 deaths per day, putting the total closer to 7100 On top of whatever number that is, we've added around 1200/day, about 17% increase. Is our system so fragile that we can't handle a 17% overload?

That said, it's not the same everywhere and some cities and hospitals are worse off than others. Some are getting more than 17% overload and some may have fewer deaths than [a typical] year.
Later on in the comments, Aesop from Raconteur Report answered my rhetorical question with, "hell yeah,"
You've leaned it out, like airlines, to the point that if it's not running at >90% most days, it goes broke.
There's no surge capacity, and they can't survive financially with 80% occupancy and 80% staff.
(Who do you know that's willing to sit around idle 20% of their working year?)
So it's high 90s, most days and times.
Thus little stretch if catastrophe strikes.
In my view, this is the result of planners applying "Just in Time" inventory management to hospital beds and equipment in the name of efficiency.  A fundamental in setting up a company is the trade-off between efficiency and responsiveness.  When you walk into the post office and waste your 20 minutes in line, it's because they're being efficient.  You wait on them.  When you need a doctor or the ambulance, just like the police or the ambulance service, you want responsiveness; you want them to be waiting on you.  Back right after Trump's election, I wrote a piece saying, "God Save Us from Efficient Medicine" where I went into more of this.

Yeah, I don't claim to know the optimum solution for balancing steady state demand vs. peak demand in hospitals or other parts of the medical world, I just know we need a better balance.  For all the years in industry I worked in a Just In Time inventory system, I called it, Just Missed It inventory.  The company, thankfully, realized it and over-ordered some supplies based on how often they were defective.  Extra capacity equals resilience.  I see a place for food distributors that would make agreements with both retail grocers and restaurant chains so that the food supply could be shifted a bit between the end markets if conditions necessitate.  I'm not sure, but I'd think that after a hurricane when parts of the state are on 3 weeks without power, that those areas experience an increase in restaurant demand compared to grocery stores. The same sort of business needs to be looked at in all these markets. 

The problem as I see it is we're not tracking any of the impacts of shutting down the country and just tracking how well we protected the health care system from collapse due to an increased workload.  There are many reports going around about increases in calls to suicide hotlines and telephone counseling facilities as more and more people face depressing situations.  There are anecdotal reports of increased calls to domestic violence agencies.  The Substance Abuse and Mental Health Services Administration, reported an 891% increase in calls over last year.  Doctors are reporting fewer patients in Emergency Rooms for heart problems and other typical conditions they treat and doctors think patients are staying at home when they think they're having a heart attack instead of going to the Emergency Room.  This isn't good.
In New York City, the number of people dying at home has surged in recent weeks to about 200 a day, compared with about 22 to 32 deaths during the same time frame last year, according to the New York City Fire Department’s data on cardiac arrest calls.
...
Nearly 68% of cardiologists who responded to an informal Twitter poll posted this month by Angioplasty.org, an online community of cardiologists, said they have been seeing at least 40% fewer cases.
I know that when this topic comes up, the leftist wokescolds start to say, "you only care about money!  You don't value life!"  The answer is that the country is only looking at how many lives we're helping in one very specific place and totally ignoring the much, much larger group that's being impacted by these policies.  We can't put a price on it because it's impossible to know how many lives we've saved.

What if we're losing one life for every life we're saving?  What if it's more than that?  You might object, but how do you know without measured data?  Remember, they eliminated all elective surgeries.  My wife's cancer surgeries were considered elective, would she be sitting with me if those were put off three or six months?  How many people will die because of that?  With apparently millions of businesses closing that's going to affect healthcare as well as all retail businesses.  How many people will die because of that?  What about the millions of workers who have no place to go back to? 

(ShutterStock, but used at the NY Daily News.)




24 comments:

  1. That is always the issue of any response to a public health crisis. How far do you extend. And to what extent in the non-crisis times do you prepare for crisis times.

    In the response, there is a fine line between not doing enough and doing too much. A half-hearted stuttered response can and often is worse than either doing nothing or too much.

    As much as the shutdown may be horrible for all the people affected, it seems to be working. Cases are trending down, deaths, hospitalizations and all that.

    And, looking at President Trump and now First Lady Melania's responses to the Corona-Wuhan virus, they and their close people have been much more right than the main-stream medical system, and especially the CDC.

    In non-emergency time, it is necessary to prepare. The Civil Defense program is an excellent example of what some call a complete waste of money and time. But it wasn't. It was a great reaction to what was seen during WWII and what was seen in nuclear testing. Yes, it would have sucked to be in and under a nuclear blast, but with enough time, many could have been saved. Yet, today, many (especially dems) call it a waste.

    But we see preparations for a bad flu season, like New York started to do, buying ventilators and starting to collect masks in preparation for the future. And then spending the money to maintain them and replace them on... happy happy joy joy programs, or illegal aliens or whatever. So you end up with New York and specifically New York City completely unprepared for this crisis, that they knew was coming, eventually.

    Fine line. Either way. Too little or too much response. Too little or too much prep.

    This is why we have elected representatives. They are supposed to do this

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    1. ... for us. Supposed to do this for us. Their collective failure to do this, instead focusing on a sham impeachment and resistance should cause many to most of our elected ones to be beached at the least, and criminally charged.

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  2. The response to the current imbalance in healthcare/hospital volume is becoming harsh. Some facilities are being overwhelmed, employees worked to n beyond the edge. Other facilities are literally this towns with ZERO paying outpatients and the only people being seen coming into the ER...and damn few of those as a lot of people who we to show up with all the minor maladies that plugged up waiting rooms and wasted tax dollars now stay home and afraid of catching WuFlu. As a result the axe has come out and personnel cuts being made indiscriminately. With more than 85 years experience in imaging the wife and I just got the axe. They had an "excuse" to fire us.....(manufactured to avoid the cost of paying unemployment) but the reason was cost. As old long term employees at top of scale whose insurance costs much more than a youngster.....we were ripe for discarding. But 3 months, 6 months or so when things get back to normal a LOT of employees sacrificed to save a few months operating costs won't be available when volume returns and waiting room fill. Wears fortunate...with our Social Security, savings etc we won't starve....life will just be a bit tighter. And Per Diem work MAY be something to do.... we'll see. But a LOT of talent will be sacrificed to save money now....by people who can't see past tomorrow. And a lot of that talent wasn't ready for this like we were.

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  3. This was always going to be a choice between a sh*t sandwich, and sh*t stew.

    If you think health care is expensive now, wait until you're paying to keep 50% of it idle 98% of the time, to retain surge capability.

    Doing nothing for Kung Flu looks like New York City.
    Everywhere else they did stay-at-homes early (and didn't have dumbass college kids frolicking on Spring Break beaches, or hold an open-air Mardi Gras festival), it looks a lot better.

    Traffic accidents and trauma in general are down.
    Strokes and heart attacks aren't coming in.
    Neither is the 50% B.S. that should never come into the ER ever, but does, because "it's free".
    In fact, even the lunatics aren't coming in like normal, and since the cops aren't arresting anyone for anything less than rape of murder, we aren't seeing twenty of their arrestees every night, needing medical clearance to go to jail.

    OTOH, you have the ER in Detroit that had the night shift ER nurses walk out, because they refused to do an 8th night with 7 nurses for 120 patients, many on ventilators and multiple IV drips. (For the uninformed, that's 17 patients@RN, or 13 to 15 more than is clinically safe and prudent). Those nurses walked, because hospital manglement had a week to deal with the problem, and wasn't willing to do anything but let the nurses take the risk, and the blame, for anything that happened because they couldn't be in 17 places at once.

    That's what overloading the system looks like.

    Underloading it looks like lay-offs.

    That's the system you wanted, and now you're dealing with the consequences of wanting it.

    The moral of the story is that you always pay for your health care, one way, or another.

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    1. And yes, in one night, three of the traumas we had were domestic violence.

      Normally, we see one of those a month; at worst, one a week. Not three in one night.

      But it hasn't been that way every night. Yet.

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    2. Like I said, I don't claim to know the optimum solution for balancing normal vs. peak demand in hospitals, but I'd be pretty sure it's more than 5% and less than 50%. Just like everyone tries to get across to their kids not to spend every penny that comes in, and save some for hard times, we tell them that unplanned things are going to happen and have some cushion for that. And, yes, I don't mind paying overhead for having that emergency response capability on hand; it's part of what I'm buying.

      In the big picture sense, this is the problem with bean counters running everything and (also as I said) the drive for increased efficiency in medicine. Peak efficiency is fine for turning on the machines and making nearly identical consumer products, like turning out ammunition, not so fine for anything having to do with human beings.

      In my (ex-) world, we'd budget a program to design a product that nobody had ever designed before. Nobody ever knows what designing a new thing is going to cost. You get your best guys together to make their best guesses, and if you're smart you pad their estimates by some percentage. Nobody ever spends 100% of their workday at work. There's always bathroom breaks, stupid interruptions and other wastes of time. "In this world you will have trouble" (John 16:33) and something unexpected always happens.

      That's a good reference to sneak in for Good Friday, amirite?

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    3. Aesop, the 50% idle you mention would look like a 10 patient load for RNs instead of a 16 patient load (or worse). Nobody would be sitting around idle, they would just have more time to concentrate on their patients and deal with things like thorough charting live instead of having to do it all after hours. My mother is an NP, and a sister is an RN, and it would be really good for both of them. Cost would go up, but so would quality of care. Cost might not go up as much as you think, either, since more things would be caught early if the medical staff had adequate time to evaluate patients instead of being rushed all the time to hit their quotas.

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  4. Any squids onboard? Who can identify this sound and be more precise than saying it is 'some kind of SONAR'?
    Here is a YT video made by a couple on their sailboat. The subject is the annoying audio transmitted through the hull of their boat. Their boat is made of 1/4" steel plate with minimal insulation.
    https://www.youtube.com/watch?v=bCp3LnMULgc

    They are moored in this mooring field in San Diego harbor.
    https://www.google.com/maps/place/32%C2%B041'23.4%22N+117%C2%B009'38.0%22W/@32.6898345,-117.1627457,957m/data=!3m2!1e3!4b1!4m14!1m7!3m6!1s0x80d9530fad921e4b:0xd3a21fdfd15df79!2sSan+Diego,+CA!3b1!8m2!3d32.715738!4d-117.1610838!3m5!1s0x0:0x0!7e2!8m2!3d32.68983!4d-117.160557

    Rick

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    1. Rick, I was a sonar technician (STS) in the Navy. I hate to say this but...

      It *is* an active sonar system, probably from a surface ship. Exactly which type, I can't say because I have been out too long to be up on the latest systems. However, I will tell you that one of the sonar systems I took care of back in the 70's, now obsolete and found in museums, could make sounds like this. By the way, I was a submariner, and you could hear this directly through a hull much thicker than 1/4 inch.

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  5. We are sawing off an arm for a hangnail, and our reaction is stupid, and insanely dangerous.

    Yeah, old people and sick people will die. Maybe they die a month sooner, or six months sooner than they would otherwise.

    It does not matter, on a civilizational level. Destroying an economy matters.

    The Chinese and the commie left have pulled off the greatest ju-jitsu move warfare has ever seen. More successful maybe than 9/11, which was up till now possibly the most leveraged attack ever mounted. I am not saying the release of this was deliberate- but the leverage used by the press and the WHO etc was-this has been exploited to the max.

    We won't have death by virus, but death by suicide-if we are lucky-if we are not lucky, the NEXT attack will do it.

    What we ought to be doing, is thinking about the second wave of this attack, happening when most of the country is out of commission due to being in lockdown. But everyone seems to be looking in a rear view mirror, or six inches in front of their feet.


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  6. Since 2013, Smithfield is a mainland Chinese company. I won't buy their products. I'm fine with closing that plant, with prejudice. Crossing fingers that when the capability comes back, and it will, it will be under American ownership.

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  7. In my view, this is the result of planners applying "Just in Time" inventory management to hospital beds and [medical] equipment [and airlines] in the name of efficiency.

    All these occupational sectors have been assigned to be near-monopolies by legislators. There is only one business queuing/buffering/inventory management strategy in existance in these sectors because the legislature said it shall be that way.

    I don't claim to know the optimum solution for balancing steady state demand vs. peak demand in hospitals or other parts of the medical world, I just know we need a better balance.

    Government planners claim to know that. You disagree they don't know that. Yet, you still advocate the masses should obey the planners. Why? The method of power transmission from the ruled to rulers is not money or currency, it is not peasant happiness/satisfaction, it is peasant obedience. All governments everywhere and everywhen are direct democracies.

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    1. Government planners claim to know that. You disagree they don't know that. Yet, you still advocate the masses should obey the planners. Why?
      Where did you get the idea that I advocate government planners? Or that I want any central planners?

      I want company planners who have enough vision to see that managing by counting every penny is "penny wise but pound foolish" (Gee - do ya think someone else noticed this before us? Like far enough in the past that it's an old saying?) Having a flexible company that doesn't get destroyed when the first black swan visits is good value, too.

      Your statement that these occupational sectors have been assigned to be near-monopolies by legislators is true, of course, for airlines and the medical industry, but the idiocy of Just In Time inventory is far from restricted to those two areas.

      Which isn't to say it's not influenced by government, because JIT is heavily influenced by tax regulations on inventory.

      Other people have written on this for as far back as I can recall, but management for the highest stock price at any given second is shortsighted if you want the company to succeed long term.

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    2. Where did you get the idea that I advocate government planners? Or that I want any central planners?

      Well, I don't get a vibe here like I do from zerogov or ericpetersautos. I think of your attitude as conservative republican, tea party, not libertarian, and that you want a larger government than Ron Paul did. I don't think you disbelieve central planning has been disproved and anyone who does it is a kook, like you disbelieve 100 MPG carburators that run on water or that bleeding with leeches is a treatment for flu.

      the idiocy of Just In Time inventory is far from restricted to [airlines and medicine] ... JIT is heavily influenced by tax regulations on inventory

      And tax and zoning on the warehouses to store inventory in, and the employees to move it around, etc. I don't think you can be competitive in business in the US with material amounts of inventory unless you do JIT. JIT is not a choice which every executive gets wrong; non-JIT has been removed as a choice.

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    3. I work in a market with 30 different hospitals.
      Good luck running your "monopoly theory" there.

      Government has screwed up healthcare every time they touched it.
      When they decreed "Medicare" they decided to reimburse doctors and hospitals at 3¢ for every $1 of care delivered. If you're a bright guy see if you can figure out why your Tylenol costs $57.

      Then they decreed EMTALA: meaning anyone can come to the ER and must be seen, regardless of ability to pay. With no government reimbursement for that cost.
      Really?
      How long would McDonald's stay in business under that model, and if they did, how much would a Big Mac cost?
      Now see if you can figure out why your Tylenol is up to $75, and a bad of saline that retails - retails, mind you - for $2 is billed out at $133.

      Before government care, doctors made housecalls.
      Now, they give you 5 minutes every 6 months to a year, and in an urgent situation( a broken leg, for instance - ask me how I know), they can get you in to be seen in 2 or 3 weeks. Or months.

      Fix it?
      Step 1) No insurance. Cash for services. Unlimited medical savings accounts, non-taxable, and all yours to spend penalty free for all monies there more than 10 years.

      Step 2) Nothing. Step 1 would fix everything.

      But then, poor people who drive Yugos would also get Yugo care, and rich people driving a Ferrari would get Ferrari care, and then the "But it isn't F-a-a-a-a-a-a-a-a-I-r!" Fairies would descend like the witches in MacBeth.

      Get over it. Life isn't fair.
      You get what you pay for.
      Just like with dinner. Or cars. Or houses.
      IOW, like the rest of life, since ever.

      Then, medicine, doctors, and hospitals all have a non-perverse incentive to lean out costs, instead of leaning out care, because the cheaper it is, the more people can afford it, and the more they buy. And people, who now own the reults on their bodies, stop treating them like other people's problems for their whole life, instead of figuring, "I'll drink, and smoke, and take drugs, and overeat, and waddle around like a land whale at 23 with a Hoverround shopping cart full of Twinkies, because when I get old, all you suckers are paying for it!"

      Problem solved.

      All government should be doing is certifying that the snake oil does what's advertised, and isn't rat poison.
      Everything else is a sales agreement between doctor and patient, for cash money.
      Unless negligence or maleficence is involved, you get what you pay for, and you live with it. Or without it.

      No other mandates. Because a mandate is just a levee on everyone else's wallet. "Government money" is an oxymoron.

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    4. I think of your attitude as conservative republican, tea party, not libertarian, and that you want a larger government than Ron Paul did. ... snip

      I'm not sure where anybody puts those milestones (conservative, tea party, libertarian) and I couldn't tell you exactly where Ron Paul stood on everything. I think of myself as closer to the libertarian end than the others. I believe there is a role and size for a central government but that size is suitable for study by particle physicists. We exceeded that limit a least 100 years ago during the Woodrow Wilson if not 160 years ago.

      I don't think you disbelieve central planning has been disproved and anyone who does it is a kook, like you disbelieve 100 MPG carburators that run on water or that bleeding with leeches is a treatment for flu.

      That last sentence could not be more wrong.

      When I say "we need more resilience" in my mind I'm not calling for central planning; I'm putting the idea in the heads stockholders, whom I believe are reading here, to pressure the companies they invest in to emphasize it. When I say companies should plan to run at less than maximum capacity with some reserve for emergencies, I mean for stockholders, engineers (a lot of engineers read here, judging by the few that have left comments) engineering managers and other people in the companies to push for it.

      I think an intelligent CEO (not an oxymoron) would look at the events of the last few months and think of making their company more resilient themselves, and wouldn't require anyone to order them to work for the long term survival of their company.

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    5. Aesop, that was obviously for Anon at 1644.

      You and I are on virtually exactly the same page.
      Fix it?
      Step 1) No insurance. Cash for services. Unlimited medical savings accounts, non-taxable, and all yours to spend penalty free for all monies there more than 10 years.


      I know for sure I've talked about getting free market returned for health care. I know for sure I noted that the areas where insurance doesn't get involved, purely cosmetic plastic surgery and Lasik, the usual market behaviors of lowering prices and improvement of quality have been measured.

      With the Blogger search engine it's hard to find the very first time I talked about it, but I'm sure it was early in my 10 years here. One of these days I'll go look for it.


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  8. Great post. I extend your reasoning over at my place:

    https://borepatch.blogspot.com/2020/04/the-seen-and-unseen-about-kung-flu.html

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  9. Oddly enough, veterinarians charge cash for their services, which are reasonably affordable. Their training and expertise is not really less than that of doctors. After all, they care for multiple species, not just one.

    So there is a model of health care that works. But, like through most of history, it's for animals, not people.

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    1. There is veterinary health insurance, and it's distorting the market there, too.

      I think the real issue is that people insist that insurance pay for every routine visit and not as a backup for bad, unusual things like fire insurance on your house. Insurance makes sense from the standpoint of risk management, but insisting it pay for everything is the root of the troubles.

      Last fall, I went looking for dental insurance, specifically for catastrophic coverage. I'm a cyclist and I can see a car accident causing a face plant and needing to get my mouth rebuilt. I found no such thing as catastrophic coverage for dental. I haven't looked as much for catastrophic coverage for the cats, but I didn't see any.

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  10. Aesop: I work in a market with 30 different hospitals.
    Good luck running your "monopoly theory" there.


    Please refer to IRS form SS-8, "Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding", https://www.irs.gov/pub/irs-pdf/fss8.pdf If you do the IRS worksheet for 'are you a contractor or an employee', which examines who specifies and controls on the job behavior, you discover MD's are government employees. Those 30 "different" hospitals all must comply with the same legislated (monopoly) rules about Medicare, EMTALA, ACA, and the AMA's long-running campaign against lodge doctors. Like the IRS describes, look at who actually controls work behavior, and do not be distracted by org charts which pretend these separate bookkeeping entities are independent in any material fashion. More discussion of the official position:

    https://www.irs.gov/forms-pubs/about-form-ss-8
    https://www.irs.gov/pub/irs-pdf/p1779.pdf
    https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee

    SiGb: I believe there is a role and size for a central government but that size is suitable for study by particle physicists. We exceeded that limit a least 100 years ago during the Woodrow Wilson if not 160 years ago.

    As with what a jury does, actions speak so much louder than words that I almost don't listen to claims of principles anymore. You say you want government of a size similar to the Constitution of 1780. But what you do is obey the present huge government in all of its myriad of details, even when those details aren't in practice being enforced. Especially revealing of principles are positive actions you choose to do, which do not penalize you if you don't do them. For instance, if you discovered someone transmitting on a frequency that was claimed by government, but otherwise unused and wasted, would you turn them in to the FCC? How about if they were using encryption? For the purpose of concealing victimless crimes? While making huge amounts of money from the victimless crimes? Would you not turn them in to the FCC yourself, but gossip about it to ham friends, some of whom are busybodies enough they will turn it in? The endpoint of this progression is, would you actively conceal and misdirect if you learned someone was hiding Jews in the attic? If you would hide Jews, then what's the next step back for which you would effectively de-facto assist in the prosecution? Fake automobile license plates? Fake Driver's Licenses? Fake Social Security numbers? Illegal aliens?

    I would not want you to reply with "yes, I declare for my permanent record that if possible I would be an accessory to this list of crimes". But maybe in the future you shouldn't cheerlead so much for tax-funded rocketry companies to reform and get their act together, because you know central planning is a slippery slope and overall doesn't reform, it grows until it crashes.

    Expanding on the 'Jews in the attic' test. Economic disruption from the stay-at-home orders could be compared to the Kristallnacht, but against a larger fraction of the population. Victims' businesses are highly damaged, victims are not allowed to work, but victims still have to pay their bills. The government employees didn't break store windows this time, it's the neutron bomb Kristallnacht, but hey the optics are different so it's totally an unrelated thing.

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    1. What a freakin’ troll. You’re projecting some stereotype in your mind onto me without so much as a single justification. It’s just your imagination. And if you think I’m “cheerleading for tax-funded rocketry companies”, you need to work on your reading comprehension.

      Please get lost and don’t come back.


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