Lanhee Chen & Bob Kocher on Reopening the Economy

A plan to reopen the economy — even in the absence of an effective treatment or vaccine.

The U.S. economy is in free fall, and COVID-19 economic lockdowns have driven tens of millions into the unemployment lines. But how do we restore the economy without sacrificing public health?

In mid-April, we put out a plan to do just that. On this episode of American Wonk, three of the plan’s co-authors — Lanhee Chen of the Hoover Institution, Bob Kocher of Stanford, and Avik Roy of FREOPP — talk about their approach.

The group warns that we may be far away from scaling up testing or developing effective treatments for COVID-19, and that we therefore have to think about ways to reopen the economy even if the pandemic endures.

You may listen to the podcast here:

Below is a lightly edited transcript from the conversation.

Reconciling Public Health with Getting the Economy Back on Track

Avik Roy: At FREOPP, we have put out a plan to reopen the economy in stages by focusing on getting, in particular, younger and healthier people back to school and back into the economy. With me to discuss that plan are my co-authors Lanhee Chen from the Hoover Institution, and Bob Kocher from Stanford and Venrock.

Lanhee and Bob, we’ve had a lot of interesting experiences and conversations since we first put this paper out in mid-April. I think many of our listeners know who these individuals are, but just to give some brief background, Bob, along with his role at Venrock, was a member of President Obama’s National Economic Council, where he was the healthcare advisor. He has a lot of experience in public policy and right now is a member of California governor Gavin Newsom’s taskforce on how to manage COVID-19 and reopen the economy.

Lanhee Chen, of course, was a policy director of President Romney’s two presidential campaigns and is a well-known advisor to many policymakers at the state and local level. He is also on the board, in fact, chairman of the board, of a local hospital in the Bay Area, and so has many vantage points into this situation.

We all came together, along with another colleague, Bob Wachter, the chair of the Medicine Department at the University of California San Francisco, to put up this plan. What I’d love to do to start is go to you, Bob, and ask how would you summarize our approach to the problem of how we reconcile public health and getting the economy back on track?

Bob Kocher: I’d reconcile it with the realization that COVID-19 is a very infectious virus. It’s going to be with us for quite a while. And the goal of the stay-at-home orders was to help us mobilize our response and be able to create these types of plans without having our hospitals be overwhelmed. We in California, and the country nationally for the most part, have done a good job at flattening the initial infection spike that would have occurred such that we can now come up with a plan to safely allow businesses to operate and the economy to resume while taking a lot of action to protect people.

The main way to protect yourself from COVID-19 is to have fewer contacts per day; that’s the main way we can de-accelerate the infections that can occur. And so, what we have come up with is a plan that we believe balances the notion that people need to be able to earn income and work, and our economy needs people to actually create things and sell things, with a bunch of safeguards to make sure that the people who are at highest risk are not going to have high contacts and we won’t therefore have as many become infected as we allow the economy to begin to operate.

This gives us time to make a lot of progress on therapeutics to treatment, to put in place excellent testing infrastructures, to make sure we can identify hotspots, to contain them before we get rapid spread, and to have our hospitals have PPE, ventilators and the labor they need to take good care of patients. Hopefully it allows us time to get a vaccine that’s very effective that we can deploy.

But our thinking is that this is a 12 to 24 month disruption to the world that we need to work our way through. And so, we need to come up with ways to reopen businesses in the economy. You can do that safely by limiting large group gatherings, by adjusting the workplace and work environment such that you can reduce the amount of contact people have, by asking businesses what accommodations you might make for workers, or what you would do in a restaurant that would be different than what you do in a law office.

And so, there’s a bunch of nuances that we think could be applied to make it much safer for many more people to work, and work well, and keep the economy going. So, I’ll pause there; Lanhee and Avik, fill in the rest.

Avik Roy: Lanhee, go ahead?

Lanhee Chen: I think that’s a very useful framework. And I think the reason why this approach had appeal to me is because I think we have to be realistic about what the next several months and the next several years are going to look like. I think it’s easy enough for us to be optimistic about things like better therapeutics and maybe even a vaccine at some point soon. But we have to be thoughtful about what happens in the event that the optimistic scenario doesn’t pan out.

And so, thinking through really, what are the critical inputs in that situation, what are the important factors that we ought to consider and evaluate? And there is this sense, Avik, that there’s a dichotomy we have to choose from. We’ve been told we have to choose between the notion that the economy remains completely shut down for the sake of public health, or the alternative is that we toss all public health considerations to the side and we dramatically open things up. And I don’t think either of those scenarios reflects the reality that pretty much every American I’ve talked to wants to be in.

I think the reality we want to be in is: let’s evaluate the risks, and let’s create a framework to reopen and restart the economy in a responsible way—not tossing aside the public health concerns, not tossing aside science, but accounting for all of that. And finding that middle way is going to be really important if we’re ever going to rebuild our economy, first of all, but also have a sustainable public health infrastructure to deal with recurrences of COVID-19 as we go forward.

Preventing Our Hospitals from Becoming Overwhelmed

Avik Roy: Bob mentioned that the original rationale behind the lockdowns was that we have to be that aggressive because our hospitals may be overwhelmed. We may have a situation like Italy where they’re leaving people out in the waiting room who need to be on a ventilator because they’ve run out of ventilators. You are chairman of the board of a community hospital in Palo Alto. What have you seen in terms of how your hospital and other hospitals you pay attention to are faring?

Lanhee Chen: Well, I will say here in the Bay Area, and in California more broadly, I think things have gone relatively well (or as well as we might want), given how challenging this virus has been. Here in the Bay Area, we saw some very early cases, and at that time I think there wasn’t a great sense of the best way to foresee what was going to happen. I think the order that came down at a very early point in Santa Clara County, for example, to shelter in place to ensure that we were protecting that capacity, was a really valuable piece of policymaking.

I will say that I’ve been really impressed at the way the healthcare providers and hospitals in this area have come together to look at best practices to ensure that they are doing things responsibly to protect not just patients and potential patients, but clearly those frontline healthcare workers that have devoted so much time and so much energy to fighting this virus.

My sense is that overall we have fared quite well in this area. In fact, I was just looking at some of the capacity data yesterday, and there is a really significant amount of capacity in this area in terms of hospitals, ventilators, beds, and availability of places where people who unfortunately do show up with really significant Coronavirus symptoms do have the ability to seek care and do so in a timely and effective manner.

So, to Bob’s point, I think a lot of the focus initially was trying to ensure the healthcare system was not overwhelmed. And every indication that I’ve seen is that that was a successful endeavor. Indeed, the healthcare system has responded well and there continue to be plenty of opportunities going forward, plenty of space, plenty of resources, should we see the virus come back in some way over the next couple of weeks.

Bob Kocher: When we did the stay-at-home order, we thought even with that stay-at-home order that we were going to exceed all of our installed hospital capacity. And so, we began setting up bed capacities in the state, and the governor announced that we needed 50,000 more beds in California. So we began reopening old hospitals that had been closed, we brought in the USNS Mercy Ship down to Los Angeles, we called Stanford and said, “Reopen your old hospital,” and they begin working on that.

This is so much better than we had forecast, even with the stay-at-home order. And now we’re at a point where we comfortably say that we have hospital capacity, we have ventilators, we have PPE. And so, we need to begin figuring out how we can relax the pressure a little bit on the stay-at-home order and let the economy wake up. When you think about it, there are a lot of ways you can change businesses to be different and more safe.

You could extend hours of work for construction so that people are not all there at the same time. Of course, those workers often wear masks. You can encourage people to work from home more often and stagger days that they’re in offices. We’re also beginning to think about, in California, how you might do testing of workforces. And depending on the workforce, you might do PCR tests every two weeks so you’d be absolutely sure, and you pick up anybody who would be spreading viruses, even if they’re asymptomatic.

For other, lower risk occupations, you could do serology testing on a periodic basis as well. I think we’re at a point now where we can very safely apply modifications to how we work and test to make work safe and accessible to many people. Of course, if you’re immune suppressed or very high risk, that may not be viable; but most people will be able to actually be safe and able to fit in the economy with those types of changes.

Issues with Testing for Coronavirus

Avik Roy: It’s great that you brought up testing, because we start the paper by really trying to focus people’s attention on the ways in which things could go wrong. Everyone’s saying, “Well, let’s scale up testing.” It turns out scaling up testing may not be as easy as it looks. “Let’s develop treatments”. Great, let’s develop treatments. But as we’ve seen just in the last few weeks, a lot of the drugs that at least showed early promise have failed in clinical trials, and we may be waiting a long time to develop treatments in terms of developing immunity or the long-term one, a vaccine.

But let’s start with testing, because testing relates to something else, Bob, that you’ve been following really closely. Walk us through, what are the challenges right now in terms of scaling up testing? I know you guys in California are really trying hard to do that. Tell us about that. Why has testing been so hard to scale up, and how are we going to do over the next few months?

Bob Kocher: I’ve been spending the last month talking to California’s testing task force with the goal of scaling up testing in California. And what I would tell you is it all starts with a very special Q-tip called a FLOQSwab made by a company called COPAN in Lombardy, Italy.

This is the device that you collect the sample on that you then put in a tube and eventually put into, hopefully, a giant Roche Abbott Thermo Fisher Hologic machine, and run your test on. In the package insert for all of the big PCR machine tests, it says the way to flock the sample is with a special sterilized FLOQSwab from COPAN.

COPAN has been shut down because of the Coronavirus outbreak in Italy. They have a patent on this particular swab and sterilization technique, and the whole world is trying to buy them at the same time. And so, there’s a massive shortage of swabs. There’s one other company called Puritan in Maine who makes them. They’re not allowed to sterilize the swab because of a patent that COPAN has, and that’s the only other FDA-approved swab that exists is. You can imagine everybody’s trying to buy it. It turns out that—

Avik Roy: I’m going to stop you there for a second Bob, because why wouldn’t COPAN be willing to license their intellectual property given the public health emergency?

Bob Kocher: Well, there’s a lawsuit between Puritan and COPAN over the sterilization technique. So that may be one of the reasons, but it’s a giant conundrum. So, what have we done? We as the State of California, and the country more broadly, have begun buying alternative swabs. And the FDA and HHS have issued guidance about the sample collection techniques and their validity.

We’ve created two labs in California that are doing validation testing of other sample collection techniques, and we found that they actually work just as well. We also have concluded that they may need to sterilize the swab that you stick in the nose. And so, we have begun encouraging labs to use alternative swabs. We’ve done about 60,000 tests now that are using saliva, which could be a very good way actually to do the testing.

But the sample collection remains the hardest part. The swab and the little tube you stick it in, and the viral transport media have been in short supply. We have done a lot of work to expand the things that we can use and made that better, but that’s still the long pole in the tent. The second pole in the tent that is very hard is that, for the smaller labs, they have to use a chemical called RNA extraction reagent, and there are two companies in the world that make that; QIAGEN is the larger one. And that’s basically out on the earth.

If you’re a university, you can manufacture it if you’re using the high-throughput machines and you don’t need them. But there are a lot of labs that don’t have that chemical as well. The part that’s been really challenging is that the large machines need these special plastic kits to run these tests, and a lot of the small plastic parts have not been available because factories have been shut down all over the world. We’ve had a real hard time getting the Roche kits for our large high-throughput Roche machines. Hologic, which makes machines, can’t get a little plastic cap. They now have a new supply of theirs.

But until the DPA was invoked, there were just real bottlenecks on getting all of the supply chain in order. We as a state have actually become a big purchaser and redistributor of supplies to our labs to keep them operating. We’ve also built a network of hub labs that we ensure are always stocked, and then referral networks of smaller labs so that we can make sure our tests get done.

I think each state’s going through the same process as we are of deconvoluting their supply chain and then organizing the supply side so that you can have high-throughput labs. And that’s taken a lot of ingenuity and time on the state’s side to do it.

Avik Roy: Just to stop you there, what you’re describing is the process we’re scaling up—the way we test for the PCR test, which tests your viral RNA, which is essential for testing an active infection. The other type of test that we talk about in the paper that’s widely seen in some of the news coverage is antibody tests or serology test, which basically tell you if you had an infection two weeks ago but aren’t as good at telling you if you have an infection right now.

Bob Kocher: Antibody tests have been, I think, very misunderstood and a big disappointment when you learn more about them. People say it’s like a pregnancy test. You put a drop of blood on a card, and you can get a result in minutes. None of those work. So, we’ve looked at more than 30 of these serology finger prick tests that we’ve found from around the world, and they all have terrible sensitivity and specificity.

So you’re really not sure if the result is negative that you’re negative. And the positive ones often cross-react to other Coronaviruses when people, like most of us, have had some Coronavirus in our lives (one of the common cold viruses). The blood-based ones where you take a tube of blood out, those are much, much better. And the Abbot IgG test is the first high volume one to come on the market.

We’ve procured 1.5 million of those tests in California that we’ll be using as our serologic screening tests for the most part. The hitch is that when the test is positive, you’re not sure what that means, because we don’t really know if these antibodies are protective, or how long they might be protective. And so, we’re not sure what to tell you if it’s positive and if you’re negative. Which would be true for most people, because we think that the current prevalence of COVID-19 in California is probably in the… must be in 1 in 10 percent depending on what serologic survey you look at.

So most people will be negative, which means they’re susceptible to the virus. And so, serologists, perhaps they’re going to tell you you’ve had it. They’re not positive until about two weeks into the virus, and they’re only positive after you’ve been infectious. When you’re infectious and spreading, these tests are negative. It’ll be challenging to figure out what the right way to use these tests is, and it’s buyer beware on a lot of the self-administered or home-based ones.

Government Response to Reopening the Economy

Avik Roy: Yeah. Bottom line, testing is a lot harder than it looks, and that’s going to be a long, hard road to scale up. And that encapsulates the case that we’re making, right? It’s that if we’re waiting for testing to scale up, we’re going to be waiting a long time. And who knows how many tens of millions of people are going to be unemployed in the meantime. Lanhee, what’s your sense—you talk to a lot of people, particularly in Capitol Hill and the White House, at HHS and at the state level as well. I mean, there’s obviously an increasing interest in reopening the economy. What’s your sense of where people are relative to where we are and how we’ve come out in this paper?

Lanhee Chen: Well, I think that we’re actually pretty well-aligned with where a lot of people endeavor to go. Obviously, the devil’s in the details, and you have a couple of challenges that I think are present now. One is the challenge that’s inherent to our system of government, which is that we have a federalist system of government where the states have a tremendous amount of authority over the day-to-day lives of people.

And then you have a federal government that in a certain way takes on a supporting role; in some cases can take on a bigger role if it’s trying to coordinate the activities of several states. And so we’re seeing, I think, to a certain degree, the challenges created by that federalist system. And one of the issues that we’re starting to come into contact with is what happens when neighboring states want to do different things?

So, let’s say Nevada and California are two examples of states that may, at the end of the day, want to get to the place, but the route they take to get there could be very different. And so, one of the things that I’ve been encouraging governors and others in a position to make these decisions to do is to think more about regional coordination; to make sure that, for example, if Nevada is going to open certain parts of its economy in a certain way, that California understands what Nevada is trying to do and recognizes that people go back and forth between these states quite often. Whether it’s in Northern California with the Reno/Lake Tahoe area or Southern California with the Las Vegas area, there’s a lot of movement back and forth.

Bringing K-12 Education Back Online

Lanhee Chen: Those are things that I think will be important, but they’re just challenges that I’m seeing now. The other issue, which maybe we could talk a little bit more about and that we expound on a little bit in our plan, is the importance of bringing K through 12 education back online in a reasonably short amount of time.

Yeah, I mean, I think this one is controversial. Actually, I would say, Avik you might disagree, but I think our plan is probably more aggressive than even where the president’s framework comes out on this. But I think that the point is, we are trying to ensure, first of all, that we are responsive to what the science is telling us about who is most susceptible to really, really significant and negative impacts from this Coronavirus. And that tends not to be children.

Now, that cannot be considered in isolation. You also have to consider the fact that there are caretakers, there are teachers, there are administrators, there are lots of people involved in school infrastructure. But one of the things that we talk about is that states need to be giving more thought to how to bring schools back online—some combination of in-person learning with online or distance learning—because that issue has to get solved before the economy really gets back online in any significant way.

If parents do not have schools to send their kids to, it’s much more difficult for them to go back to work in any fulsome way. That impact is going to hit lower income communities and communities of color a lot harder than it’s going to hit folks who are doing better. And so we need to think, if we want the economy to restart in a reasonable way and for it to be restarted broadly across income strata, it is important for us to get the answer straight on when the schools reopen and how they reopen. I think we would advocate (or at least I would advocate) for a position that suggests states need to be thinking about how to open the schools first, almost as a precedent to opening other parts of the economy or opening the economy up for business more generally, because the schools play such a crucial role in the economy being able to function well.

Bob Kocher: I couldn’t agree more with Lanhee. The schools also could be opened in ways that make them safer. We talk about, in the paper, modifications you can make, which would go long ways towards making, I think, everyone have confidence. School opening is not just good for the economy, but a very safe and prudent thing to do. You could cohort students together so if there was an outbreak, you could isolate it into a much smaller group of people. You could move the faculty to the students so the kids aren’t mixing in large groups like they would during the day.

You don’t have to eat lunch in the cafeteria. For kids who have parents who are high risk, you can imagine very high-quality virtual school options, and maybe even statewide virtual school. And imagine that you could have teachers who are at risk teaching those classes so they’re not exposed to children. So, there’s a bunch of ways you could reconfigure this if you plan now in absolute imagination. And it’s hard to imagine that we could have an economy that works if we don’t have our schools operating.

Avik Roy: That was one of the ideas you mentioned in there, Bob, that isn’t in our plan, but maybe we should add—it is really interesting—which is don’t leave it to the school district to come up with the virtual learning opportunities for the kids who still have to stay home because they live with an elderly grandparent or an at-risk individual who’s immunocompromised or something. But if you, as a state say, “Hey, we’re going to take on that task of making sure there’s a lesson plan for second graders across the state that’s virtual,” that may be a way to accelerate the process of getting those individuals online with school along with the people who actually could return physically.

Bob Kocher: I think it’s silly to have each school district be counted on for virtual instruction, because there’s a lot of skill in doing virtual learning, and those are very different and also don’t need to be defined by small geographies. I hope that states actually have a statewide school district for virtual school. And I think it could be actually a very excellent alternative.

Avik Roy: To what degree has California staked out a position on this? Has Governor Newsom said that he wants to get the schools opened sooner, or is it something that you guys are actively considering on your task force?

Bob Kocher: We’re working hard on these questions and ideas, and the governor has children and a wife, so there’s a lot of pressure to get those schools open. There’s a lot of concern about safety of teachers and also access to education that make us want to open schools but do it safely.

Lanhee Chen: Yeah. I could say here in Texas, Governor Abbott as of now said that he doesn’t think schools can reopen until the fall, but there certainly have been a lot of people asking him to reconsider that decision.

Bob Kocher: Yeah. Our governor, Gavin Newsom, has also said that the schools are not going to reopen this school year. We’ve not made comments publicly about summer schooling, but certainly there’s some desire to offer summer school options in virtual and in-person type summer school programs. And a lot of work is going into how to redesign schools are some of the ideas we have in our paper for the fall.

The Importance of Returning to Air Travel

Avik Roy: Lanhee, one of the things that you’ve brought up, or highlighted a lot, in terms of some economically significant aspects of our plan is how to get air travel back on. And obviously, planes in theory aren’t barred from flying. It’s more that the passengers are not going anywhere. They’re not boarding planes. Talk to us about that. Walk us through our thoughts and your thoughts on getting air travel up and running again.

Lanhee Chen: I think, Avik, this is a really significant issue. It’s going to be difficult for us to get an economy that functions anywhere near the one that we had right before this crisis started if people don’t feel comfortable traveling. And that’s not just a statement about the travel and leisure industries or hospitality industry, it’s a statement about work for a lot of people.

Travel and interactions with people across the country and around the world, those are really important parts of work and of business. And it’s inconceivable to me that they wouldn’t be a part of work in business going forward. Given the current situation though, there’s an understandable fear, there’s an understandable concern, about traveling, about what that might mean for passing the virus back and forth. And so, one of the things that we have thought about, I think, in the plan… And by the way, this is not going to be universally popular…

I think some, in fact on the right, have been critical of the kinds of things that we suggest are necessary. But ultimately I tend to think that if people are going to be comfortable, we have to have folks who are going to travel do a few things. First of all, participate in contact tracing programs—and I know those are still being developed. I think we will continue to get better and more targeted as that happens, but that will help not just the traveler, but anybody that traveler might come in contact with in terms of identifying people who might have the virus and letting people know that they need to engage in the proper social distancing and isolation.

We also recommend that the traveler, at check-in, demonstrate that they’ve tested negative for the Coronavirus with one of these RTPCR tests that Bob was talking about within a reasonable amount of time. I think we say two weeks—within the last two weeks. We also propose the possibility that they could test negative using an antibody test, assuming that technology gets better, to Bob’s point also. They might also be able to demonstrate their fitness to fly with that.

We would also want to make sure that those conditions apply in some way to local transportation as well—subways, buses, commuter rail. I do think it’s important for people to recognize how integral to our lives different modalities of transportation have been. Putting in place some kind of a set of requirements, or a framework, or rubric around how we can get people feeling safe in those modalities of transportation again, I think, is really, really important.

And so, we propose some ways—I’m not saying this is the be all and end all—but I think having some sense of who is getting on these planes from the perspective of their risk factors or the risk of ability to pass on Coronavirus or an active infection is particularly important. Not just to the safety of people from a public health perspective, in the strictest sense of the word, but also just so people have comfort that they can get on a plane and continue to go about their business.

Contact Tracing

Avik Roy: Lanhee, you mentioned contact tracing. I want to bring in Bob on that because Bob has been very active in this area. First, explain to people who may not be familiar with the term; what is contact tracing, and why is it important?

Bob Kocher: Contract tracing is the bread and butter of public health, and it’s how you historically have controlled outbreaks. How it works is, when a person has a disease, you send a person to their house to ask them to share the names and places that they’ve been over the period that’s relevant for the infection. So, you’d say to a person that’s over 19, over the last 48 hours, what are all the places you’ve been in and people you’ve been with?

Then that contract tracer finds each of those people and says, “Please let me test you and find out if you’re sick or not.” And if their tests are clear, they can go back and resume their daily activities, if their test is positive, then you have them stay home and then you do contact tracing on them.

This allows you eventually to isolate all the people who’ve been exposed to an individual and wall off an infection so it doesn’t lead to contagion across the whole community. It’s how we’ve controlled things like Ebola and measles outbreaks and whooping cough and things over the years. The challenge here was that we’d never, since 1918, had a situation where there’s so many people that you need to contact trace.

In California, we’re in the process of redeploying 10,000 state workers to begin this contract tracing effort, hopefully very soon, so that we can go to every new case and have them tell us every person they’ve been with; and you get them all to stay home and test them. This can work, but with the number of cases that we’re having a day, it’s going to be very hard to operationalize. And so—

Avik Roy: It’s going to be hard because it’s hard to hire that many people and train them to do the work, or?

Bob Kocher: It’s hard to hire that many people, it’s hard to find all the contacts per day. So, some estimates are… Before COVID-19 and the stay-at-home order, a person may have a hundred contacts a day, sort of the round number that you would expect somebody to have. So if you have to get a person to find a hundred people, it’s going to take days. And since these people are spreading viruses, if they’re infected, they’ll never catch up to it if you have a whole lot of cases and that many contacts.

In the stay-at-home order, contacts have dropped a ton. People are now having between five and 30 contacts a day, at least for the data that we’ve seen in California. So that gives you a number of people you’d have to find that you could imagine actually tracking down. But you can’t tell somebody to go home and stay there for two weeks and quarantine every time they’re exposed, because then we’ll never actually work again.

So you have to have a way to get them out of the quarantine after an exposure. And that’s where testing comes in. You need to actually find these people, get them tested quickly, and have the test result tell you if they need to stay at home again or not. And that’s going to be hard because of just the scale that we’re at. The goal is to bend the curve down far enough that instead of having 3000 cases a day, which is what you were running in a lot of the large states, down to tens to hundreds—and then maybe you can contain that through contact tracing.

Avik Roy: Your specialty, Bob, as a venture investor, is in healthcare information technology. There’s been a lot of coverage of how South Korea, Taiwan, Singapore, and some of those East Asian countries have used smartphone technology—GPS, Bluetooth—to amplify contact tracing. Where are we with that technology, and could that be a part of the solution here?

Bob Kocher: It could be part of the solution. A big challenge is privacy; there’s the legal authority to get from your phone the names of the other people’s phones that your phone has been near. What we can certainly do today is, through a variety of applications on your phone, have people opt in to a tracing app that will tell us the name of the other person’s phone that your phone has been near. So it makes it much easier for other contact tracer to find people that they need to talk to.

What you can do without permission is I can at least look at your phone and have it tell me how many other Bluetooth devices it touched today. And so, you can at least use that to say, “Okay, I think there’s 40 names I need to get on a list from Avik or from Lanhee to figure out their contacts.” And then we can at least have that as a starting point to know if we’re being complete or not. Much better would be if both or all of us have opted into an app that would allow the contact tracer to know your name and maybe how to contact you, and to be able to send a message from the infected person’s phone to your phone to say, “Please go home; please call this number and we will talk to you about how to have a test done.”

There are a bunch of ways that technology can make contact tracing work better, but there are also a bunch of privacy concerns that haven’t been fully worked through that may hinder our ability to have that reality happen.

Lanhee Chen: One of the key things, from my standpoint, about contact tracing is that given the challenges we have in scaling up testing, contact tracing is a kind of force multiplier, which helps us fill in the gaps. If we’re not going to be able to test everybody or even anything close to everybody, contact tracing at least allows us to track down and test the people who are most likely to have been infected and gotten sick.

Bob Kocher: If you take just the testing numbers in California yesterday, we did a little over 20,000 tests, and we had about 1500 new cases. If you think about contact tracing and say, “Well, each one of those cases is going to have 10 high-risk contacts,” you’d want to go test. But that’s only 15,000 tests a day. That’s well within the realm of what we can do easily every day in California.

That’s why contact tracing and testing is a much better approach—a widespread, population-based surveillance testing approach. We’re testing all people on some level, because it can be much more targeted.

Avik Roy: Lanhee, what else would you highlight about our plan in terms of things that could have an impact on getting people back to work and getting the economy going?

Lanhee Chen: Well, we’ve talked about a couple of important ones. One is, I think that we imagined that employers are going to have to play an important role in terms of our surveillance capacity of determining who has the virus, and who might be at risk of spreading it on. So one of the things that we talk about is trying to incentivize employers to deploy testing at the work site—not just temperature screening, which can be inaccurate and can be gamed, but some kind of a testing situation so that they have a good sense of who might have it to give people safety to go to the workplace, and also for retail businesses to promote consumers feeling comfortable going to these places.

We actually propose a tax credit to help incentivize employers to get an effective testing platform and testing regime put in place. And I think that could be an important way of doing that. We also talk about the value and the importance of making sure that the healthcare system is prepared for future outbreaks, quite frankly. And that means continuing to build up PPE, mask, ventilator, and critical care unit capacity.

Some of that, I think, will be relatively easier to do now that we have some muscle memory. You asked earlier about Singapore, Taiwan, Korea, and some of the Asian societies that have been successful at containing Coronavirus—relatively successful, I suppose. And I’d argue one of the reasons they were successful at it is because they had some of this muscle memory from the SARS outbreak in the early 2000s. And now we have that muscle memory from this current outbreak.

One of the things that we’ve come to recognize is the importance of having capacity in our healthcare system—the ability for our healthcare system to ensure that there’s enough care space available, enough provider capacity available to treat those who might come during an outbreak or a crisis situation. To be able to build up that capacity, to be able to build up the system availability for people—I think that’s really important. And that’s one of the things that can be done as well.

You don’t want to wait until you’re at a point of crisis to do these things. You want to do them early. Part of our plan is talking about the value of doing that in the context of a situation where we hope caseloads continue to decline and the system is less stressed in the coming weeks and months. This is the time to prepare, not later.

Will Consumers Return if the Economy Reopens?

Avik Roy: One question I’ve gotten when I’ve done interviews about our plan, (perhaps you guys have as well) is, let’s say you reopen the economy. You end the lockdown and allow certain businesses to reopen with their younger, healthier, and lower risk workers, etc. Are consumers actually going to go back to business? Are they going to go and buy food from takeout places? Are people going to consume things? Are they going to start to resume normal activity, or are they going to still shutter in their homes and not go out? To what degree is our strategy workable in terms of people’s willingness to reengage with each other in an economic fashion?

Bob Kocher: Well, I think people will be excited to reengage, because they value the services that they’re going to get right now; and also they want to work. And you can’t create jobs if people can’t go to work. So I think people will be quite excited to participate in the economy again. And I think people will also know that there are ways they can change their behaviors to improve the safety for themselves and those around them by, in some cases, wearing masks, by washing your hands, by redesigning the workdays so that you’re not all there at the same time.

Employers, I think, will also respond to the opportunity to reopen by saying, “Okay, I want to create a workplace where people are confident coming to work and customers are confident coming to buy things.”

Lanhee Chen: I agree completely with that. And beyond that, you’ve got to compare it to where we’re at now. I mean, at this point we’re basically fully stopped and people have concerns, I think in part, because we are fully stopped. I cannot stress enough the value of having a plan and a thoughtful way, a thoughtful roadmap to what coming back looks like. People will get comfort from knowing that there’s a plan in place to ensure that we have a good handle on the ability to determine who’s got the virus, who might be contagious, what settings those people are in, and then having comfort that you can get back out there.

And look, everything in life to a certain degree is a calculated risk. Every time you get behind the wheel of a car, every time you get on an airplane, every time you go out for a walk, there is some risk factor associated with that. And I think Americans are smart enough, and are certainly enterprising enough, to understand that they’re going to have to take some risks potentially.

We don’t want anyone to take unnecessarily large risks, but I think most people will be able to weigh in their minds what the benefit of re-interacting and reconnecting with society will be with appropriate social distancing where necessary. They’ll be able to evaluate those things for themselves, come up with their own decision, and act accordingly.

The Future of Telehealth and Distance Learning

Avik Roy: People like us are spending a lot of time these days, and may continue to, on Zoom conference calls and the like, and maybe there will be a long standing or long-term boost to telecommuting and teleworking and teleconferences. But one area in particular where that seems likely to be the case is telemedicine and telehealth. Bob, another area where you spend a lot of time in terms of your business day job is that kind of stuff—telemedicine startups, telehealth medicine, telehealth startups. Is that what you’re seeing? Are you seeing that boost to telehealth as something that can really last, or is it going to be a blip where people are doing it now because they have to, but they’re going to really want to go back and see their doctor when they have the opportunity?

Bob Kocher: I think one of the silver linings of this pandemic is that we’ve learned how to use technology in healthcare to make healthcare much more adjustable and in many cases better for patients. I think telehealth is going to stay. Medicare added to the program as part of the pandemic; I’d be stunned if they take it away. I’d be stunned if patients want to go back to the less frequent and less convenient in-person first healthcare system.

One of the cool things we’re seeing now with telemedicine is that we’re even seeing specialty visits being done; you’re seeing primary care and specialty doctors see a patient at the same time. So that way you can coordinate care infinitely better than when you fax a note back and forth between doctors, which is how it happened before. With telemedicine, particularly for people who are sicker, it’s very easy for a clinician to see the patient every day and do it for five minutes and get a lot more information. And of course, patients are now texting their doctors and emailing them and having much more actually interactive conversations about how their care should be managed and defined.

So I think we’re going to see telemedicine stay, and most doctors will now incorporate it into their go-forward practice; and every doctor has more or less been indoctrinated on how to do it. I think that’s been very good thing.

Avik Roy: Lanhee, do you see any other silver linings from what we’re going through right now?

Lanhee Chen: Well, to the point about telemedicine and greater use of technology, I would say this distance learning thing we’ve talked about is really important. The model of education was bound to change, and we’re seeing the need for that change accelerated, whether at the K -12 level, or in collegiate education, where I spent a lot of my time. I’ve had to teach all of my classes—the end of the winter quarter, the current spring quarter we’re in at Stanford—I’ve had to teach those via Zoom, and it’s been an educational experience for me. It’s been an adjustment for our students and for our entire faculty.

But these are adjustments that I think overall are net positives in terms of understanding, “Hey, you know what? We can operate in an environment that’s not the same as the traditional schoolhouse environment.” We know that there are ways of getting educational opportunities to students of all backgrounds through distance learning, whether at first grade or third year in college. And while we’re never going to be able to replace in-person instruction—and there are some really important kinds of instruction that really can only be done in-person; I’m not suggesting everything shifts online. I do think we have a much better sense that the educational system can deliver great results for students and can be rewarding for them as well as for those who teach them. That would not have been possible were it not for this period of time where we’ve been forced to experiment with things that do and don’t work. And I think we’re going to get even better at it. These are things or lessons that, hopefully, will stay with us.

Avik Roy: We’ve been talking about the Foundation for Research on Equal Opportunity’s plan called A New Strategy for Bringing People Back to Work During COVID-19. I’m here with a Lanhee Chen from the Hoover Institution at Stanford University and Bob Coacher from Venrock, also affiliated with Stanford, two of my coauthors. Before we wrap up, let me ask each of you: what’s something that we haven’t covered in this discussion, whether it’s in our plan or just an aspect of this crisis that you think is worth mentioning, talking about raising. Bob, you want to go first?

Bob Kocher: Sure. One thing that is very important to raise and also to not lose in this crisis is that states generally do not have any way of knowing how full their hospitals are, how full the ICUs are, what’s happening in the emergency rooms, are there ventilators available and is there PPE around? California has created a series of lightweight, effectively Google Sheets that everyday hospitals are filling this data in on. And this is the oxygen that you actually need to manage the crisis to be able to monitor your health system in real time.

I hope that we take these online spreadsheets and make them into real software products that stay connected, that allow the state to be able to understand at a much more granular level of detail at all times. When it came to knowing how to prepare, we didn’t actually have any information on what was happening in our hospitals, when we were first calling them before we had the Google Sheet and we passed the HITECH Act in America in 2010.

One would have thought that by 2020 we would have actually connected these hospitals together and had ABT sheets that worked and APIs to get the data in and out. We didn’t. And I hope that we use this as a chance to make that happen.

Avik Roy: Great. How about you Lanhee?

Lanhee Chen: Well, I think what this crisis has demonstrated is just how tenuous the economic situation is for those who work at the smallest of businesses, and particularly for those businesses that operate in a retail-facing space that, I think our study talks about. Just how little cushion, just how little margin there is in these businesses in terms of restaurants having an average of 14 to 16 days of cash.

I mean, we are well into over a month of time when we’ve sheltered in place, and essentially people haven’t been out eating and dining in their usual places that they go. And that’s a real challenge. N ot just a challenge for the business owners, that’s one thing. But it’s a challenge for those who work in these places, in these businesses.

So we have to think carefully about how we create a safety net to help people who do get caught into a situation where they lose a job through no fault of their own. We also have to design the program intelligently so that we are targeting people who really need assistance. And also by the way, not creating disincentives for work once the economy picks back up again, which it certainly will.

I think in the course of a crisis, we’ve had to design on the fly. And that means we’ve had programs that haven’t been particularly targeted, like the notion of handing out stimulus checks without real regard to who might actually need them, or what the situation of that person is, or trying to help businesses but not doing it in a way that appears to hit the exact businesses that need help the most.

These are all the kinds of questions from an economics’ perspective that I would hope we are devoting this time and energy to thinking about. If and when, and I say when, there’s another displacement that results because of Coronavirus or some other pandemic in the future, we’re prepared with the economic tools to ensure that we’re supporting those who need it in a way that still feels responsible and targeted to those who need that assistance most.

Avik Roy: Well, those are a lot of great points, and we could go on for hours talking about all the dimensions of this crisis and even all the dimensions of the crisis that we talk about in our plan. But I’m going to leave it there. I want to thank Lanhee Chen from the Stanford University’s Hoover Institution and Bob Kocher from Venrock. This has been another episode of American Wonk. I’m your host Avik Roy.

Avik Roy: And if you like what we’re doing on the show, please subscribe to American Wonk on Apple Podcasts or your favorite podcast service, and better yet, rate us on that service. Rating has helped spread the word on what we’re doing so even more people can learn from our great guests like Lanhee and Bob. Thank you all for listening. And we will see you next time.