In this episode of Lehigh University’s College of Business IlLUminate podcast, we are speaking with Chad Meyerhoefer on the role of the federal government in a global pandemic. Meyerhoefer holds the Arthur F. Searing Professorship in Economics at Lehigh's College of Business. His research focuses broadly on the economics of health and nutrition, and much of his work involves the use of microeconometric methods to evaluate and inform public policy.

He spoke with Jack Croft, host of the ilLUminate podcast. Listen to the podcast here and subscribe and download Lehigh Business on Apple Podcasts or wherever you get your podcasts.

Below is an edited excerpt from that conversation. Read the complete podcast transcript

Jack Croft: Today we want to explore the question of what the federal government's role should be in a global pandemic. So let's start at the beginning: Was the federal government prepared for the COVID-19 pandemic when it swept across our country in March?

Chad Meyerhoefer: Well, the federal government had made some preparations for a pandemic, but what we found out was that they weren't sufficient in this case. There's a variety of reasons for that. One factor was that the government's stockpiles of things like N95 masks, surgical masks, and respirators were at a very low level compared to what they'd been in the past. In 2009, the government experienced the H1N1 virus. For example, during that time they released 85 million N95 masks. But when COVID-19 hit, there were only 12 million N95 respirators in the government's stockpile. So there were low levels of protective equipment and also tests that were not working properly. The tests developed by the CDC (Centers for Disease Control and Prevention) had some manufacturing and implementation difficulties and it didn't work very well. So another alternative test had to be acquired and that took time. During that time, the virus was able to be transmitted undetected. So there's also some more fundamental problems, like the U.S. didn't really have a surveillance system that was able to track the pandemic as well as needed in this case.

Croft: When looking at the federal government's response - and this might be an oversimplification - but is it fair to say that in the U.S., the federal government put almost all of its focus on developing a vaccine, while turning other forms of mitigation over to the states, or in the case of face masks and social distancing have really left it to a matter of individual choice?

Meyerhoefer: I think that is a fair assessment. The federal government really allowed states to develop their own policies with regard to social distancing, the mandatory use of masks, and also restrictions on economic activities. There wasn't really a coordinated federal response. And that's problematic for a variety of reasons. One is that even under the best circumstances, developing a vaccine takes a long time. First of all, there are some viruses for which it's extremely difficult to develop a vaccine. Think about HIV, which we've had it for a long time. We have therapeutics for that now, but we don't have a vaccine.

The other issue is that, in some cases, people just don't develop natural immunity to the virus. We know that there are some people who've contracted COVID-19 more than once. We don't know how long immunity lasts after an initial infection. So all these factors really interject a lot of uncertainty into how long it would be before a [vaccine] was developed. Now we did end up developing a vaccine fairly quickly and that's a good thing. But in the meantime, we've lost the opportunity to have a coordinated response. And there's actually lots of justification for national mask mandates and social distancing requirements. And it has to do with something that economists call a negative externality. Meaning that I if I take an action, I bear the consequences of that action. So you could say, "Well, it's my choice not to wear a mask and you know I'm deciding that I'm going to take that risk." But in fact, you could be infected with the virus and not know it, and therefore spreading it and putting other people at risk. So that's a negative cost you're imposing on someone else, but those other people are not being compensated for your negligence.

If it was possible, theoretically, to levy a tax on a person who put other people at risk — so every person you come into contact with, you have to give them, like, $500 — then individuals would decide that it was worthwhile to wear a mask and protect their friends and neighbors from the virus. So negative externality is a justification for government intervention to require masks.

And then the other problem with the federal response was that differential standards across locations allowed the virus to persist in the country. In order to fight a virus, it needs a host to survive, so you need to attack it on all fronts. You have to give it nowhere to go. And by having some regions of the country where there were very few mitigation strategies and others where there were, the virus could survive in those host areas where mitigation and mask wearing was low. That's exactly what we saw, and so it would flare up in those areas. Those areas might decide to then impose measures to reduce the virus, but then in places where it was contained, people were eager to get on with their normal lives and so restrictions would be loosened and that would give the virus an opportunity to go and flare up again in that area. So these differential standards, not only did they lead to a distrust for the logic behind the necessity to do things like wear masks, but they also allowed the virus to keep moving around and surviving in the population.

Croft: Over the past week, I think most of us have been watching footage of the trucks being loaded up, carrying the vaccine out to different parts of the country and the first vaccinations being given in city after city and hospital after hospital. What's your assessment of the government's plan that's being implemented now to distribute the vaccines over the coming months?

Meyerhoefer: So it's interesting, I think the government's organization of vaccine distribution is really in contrast to the government's poor management of public health measures. I actually think the plan that's been developed for distributing the vaccine is a very good one through Operation Warp Speed. This system was put in place in advance. The government through the military was able to coordinate this vaccine distribution in a way that no individual private firm could, and they tapped public health experts to develop a priority for who should be vaccinated. And of course, it's people at high risk and first responders, then essential workers. And then lastly children, because in part they're lower risk and also there hasn't been an NIH vaccine trial on children yet. It's to start shortly and it'll be some time before the results of that are put out.

The other thing that I think helped this effort, or will help this effort in the future, is changes made under the Affordable Care Act. Prior to the ACA, there were different incentives people faced to get vaccines, financial incentives. Because in some cases, they had large copays or coinsurance amounts that they had to pay to get vaccines and the ACA essentially made it a requirement that … all insurance companies had to cover those vaccines at zero cost. And so that's something that helps here and also will help in the future. But going back to the earlier discussion, it's really in contrast to the poor implementation of public health measures like mask wearing and social distancing that we've had with this pandemic response.

Croft: Finally, what are the most important lessons we should learn to be better prepared for the next significant public health crisis, whether it's a pandemic or something else?

Meyerhoefer: One is that all countries have learned that we need better global disease surveillance. So we need to have better partnerships through the WHO (World Health Organization) to develop systems that can track the spread of a virus more effectively and more quickly. That's number one. Number two, within the United States, we need a better action plan for containing the virus and that means developing a surveillance system in the U.S. that's not just based on aggregate reports from health care providers, but is tied more closely to the individual level, so that individuals who are at risk can be notified immediately. So we need a better action plan. We need more stockpiles and surge capacity for personal protective equipment and for tests. And then we need consistent policies to implement public health measures.

So many countries, and many parts of the U.S., had to shut down their economies essentially in order to reduce the spread of the virus. And that's caused hundreds of millions of dollars in economic losses and hardships. And one of the main reasons for the need to take those measures was lack of initial surveillance of the virus in testing and containment and also the lack of public health measures. There's a lot that we can do in terms of maintaining the economy and keeping everything open if everybody is to wear a mask, everybody is to engage in reasonable social distancing. That allows you to keep the economy open. And the failure to do that on a broad scale immediately was one of the major reasons why we've experienced such economic hardship.

So I think that that is a really important lesson for future pandemics, but it's not an easy one to fix because we're obviously divided in this country on whether the government should impose those measures on individuals. In other countries, wearing a mask is really not seen as a big imposition. But here, it is among some groups. So it's going to require a change in culture, and I think the country and the government needs to help us develop a better culture around public health and make sure people realize the importance of doing things collectively to improve the health of everyone. And that's one of the major things that's been missing in the U.S., and one of the reasons why the pandemic has been so severe in our country.

Chad D. Meyerhoefer

Chad D. Meyerhoefer

Chad D. Meyerhoefer, Ph.D., is a professor and department chair in the department of economics at Lehigh Business.