Thursday evening, the president sent to the states’ 50 governors a letter informing them that his administration was working on a revision to its guidance to states. The current guidance, supported by CDC advisories on travel, social gatherings, limits on travel, etc., was issued on March 16 and can be found here.
While only guidance, the White House 15-day plan has been followed or exceeded by a number of governors and local officials around the country. Governors, and in some cases, Mayors and County Commissions began by limiting large gatherings, including school closures, then moved on to prohibiting dine-in services at bars and restaurants, closing other non-essential business and finally, in some states ordering people to stay at home.
Day 15 of the White House’s 15-day plan will be Tuesday. On or before that day, we anticipate the White House will be offering a risk-stratified plan for relaxing that guidance on a state-by-state or perhaps, county-by-county level until a vaccine is tested and produced at scale.
While a change in guidance might seem premature with cases in the New York Metro area climbing and death tolls mounting, the economic and political reality is that states and even counties have and will continue to be affected differently because of varying demographics and public health responses.
Further, substantial planning will be necessary for businesses to re-open and meet requirements of local health officials.
What Does a Risk-based Approach Look Like?
A risk-based approach would be designed to assess communities on their abilities to first prevent spread of the disease and, when it does occur, aggressively contain and treat it. Depending on the risk, communities can relax current restrictions and move to a more normal environment. They would also have to be prepared to move back to imposing restrictions if the risk level rises.
The New Normal
The first restriction to be lifted is most likely stay-at-home orders. The ACLU has put most states on notice that this response should be limited and used only when science and medicine dictate. It is also unsustainable and the longer such orders endure, the less compliant the population is likely to be.
After stay-at-home orders are lifted, and in the case of most states that have not imposed them, the next likely restrictions to be lifted are the closure of non-essential businesses. When non-essential businesses are permitted to open, however, we would anticipate local health departments will require specific and extraordinary hygiene practices in high touch areas like kitchens, bathrooms and conference rooms.
We would also expect limits on occupancy of some businesses where the public assembles like restaurants and casinos. Every building in the US has what codes officials refer to as an “occupant load” that cannot (subject to the discretion of the codes official) exceed one person per seven square feet of space. One possible outcome is that the occupant load for a business is doubled and it is required to enforce social distancing standards.
Another option for public health officials would be to continue imposing restrictions on public gatherings, raising and lowering them depending on risk assessment within the community. In a low risk environment, a bar may be able to accommodate 250 patrons but during an outbreak that would be lowered to 50 or 10.
In short, the COVID-19 era means fewer customers and higher expenses for most public facing business.
Who Get There First?
There is no doubt that for most of the US, it is too early to tell. Most major metros will see peak sometime in the first two weeks-ish of April. However, we think it is worth monitoring Santa Clara County, CA. They have extended the days of doubling cases from two-three in mid-March to six or seven today, the pay-off for early and aggressive intervention. Daily new cases have fallen from 83 to 17, as of yesterday.
They also have a very robust and sophisticated health system that can handle both the complexity and the intensity of COVID-19 cases. Assuming things continue to improve in Santa Clara Co. CA, here is a theoretically timeline for getting things up and running again.
We had high hopes for the Seattle area, the site of the first on-shore case, but a surge in volume over the weekend suggests they are not out of the woods yet. They can and should, however, get substantial credit for managing the curve more aggressively than certain other Metros.
Please call with questions and do not hesitate to make this information available to your non-health care analysts. This is my fourth crisis on Wall Street and I promise you we will get through this; bruised and battered, but still in the ring.
Emily Evans
Managing Director – Health Policy
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