Flu pandemic could cost U.S. $683 billion

Mar 22 2007

Trust for America's Health (TFAH) released a new report today that finds a severe pandemic flu outbreak could result in the second worst recession in the U.S. since World War II. The U.S. Gross Domestic Product (GDP) could drop over 5.5 percent, leading to an estimated $683 billion loss.

States with high levels of tourism and entertainment could be the hardest hit. Nevada's economy could face the biggest percent decline with a GDP loss of 8.08 percent, followed by Hawaii, which could experience a 6.60 percent loss. Six states could suffer losses over 6 percent (Nevada, Hawaii, Alaska, Wyoming, Nebraska, and Louisiana). The economies in an additional 21 states could drop more than 5.5 percent and every state could lose more than 5 percent in GDP.

States with government and real estate as major industries could suffer the lowest percentage losses. The economies of Virginia and Maryland could experience the lowest drops in GDP of any of the states, but would still face significant declines of 5.13 percent and 5.09 percent, respectively. Washington, D.C. could face a 4.62 percent decline.

"The U.S. is not prepared to face an economic shock of this magnitude," said Jeff Levi, PhD, Executive Director of Trust for America's Health. "While important government preparedness efforts focusing mainly on medical and public health strategies are underway, efforts to prepare for the possible economic ramifications have been seriously inadequate. Stepping up pandemic preparedness planning is vital to our national and economic security."

The report was funded by The Pew Charitable Trusts as part of the U.S. Pandemic Preparedness Initiative.

In the report "Pandemic Flu and the Potential for U.S. Economic Recession," TFAH created a model to assess the potential losses each state could face during a severe pandemic. Based on estimates from financial and economic experts, TFAH examined the impact of a pandemic on 20 different industries, trade, and worker productivity.

The model examines an outbreak as severe as the 1918 pandemic, which in modern terms could result in nearly 90 million Americans becoming sick and 2.2 million deaths. People who become ill are expected to take at least 3 weeks to recover, and others would miss significant time from work to take care of family members or stay home out of fear of potential exposure to the flu.

Additionally, the model incorporates predictions from experts of how consumer demand for products and services could drop in a number of industries. For instance, according to estimates, tourism, entertainment, and food services could experience an 80 percent decline, while agriculture, construction, retail trade, and finance and insurance could face a 10 percent loss in demand.

The estimates focus on possible losses over the course of a year during a scenario when a vaccine is not widely available. A real pandemic could last up to 18 months with a series of waves that last 6 to 8 weeks each.

TFAH's report recommends a series of measures businesses and community groups can take to help prepare for a possible pandemic, focusing on how to sustain essential operating functions during a major outbreak. The recommendations encourage the private sector and government at all levels to examine and modify family and medical leave policies; expand telecommuting capabilities; assess infection control procedures in the workplace; establish contingency systems to maintain delivery of goods and services during a pandemic event; and update methods for communicating with their workforce.

The full report can be found on TFAH's Web sites at http://www.healthyamericans.org/ and http://www.pandemicfluandyou.org/.