The COVID-19 trolley problem

US public-health policy has fallen behind virus growth again and again

John H. Cochrane

The Grumpy Economist

John H. Cochrane | Feb 03, 2021

Sections Economics Public Policy

Collections COVID-19 Crisis

In late December, a new, more transmissible strain of the virus that causes COVID-19—B.1.1.7, often called simply the “UK variant”—appeared in the United States. As this strain becomes more and more dominant in the US, it will mean the virus’s reproduction rate, popularly known as R, will be higher. If or where R was a bit below 1 (meaning that each infected person spread the virus to fewer than one other person, on average) and the virus was contracting, the virus will begin moving toward exponential growth again. And the virus has already been spreading quickly in our second wave. 

As Zeynep Tufekci explained in The Atlantic, “a more transmissible variant is in some ways much more dangerous than a more severe variant. That’s because higher transmissibility subjects us to a more contagious virus spreading with exponential growth, whereas the risk from increased severity would have increased in a linear manner, affecting only those infected.”

If you want to stop a pandemic, there is one rule for public-health policy: lower R, the reproduction rate. With R below 1, the virus fades away. With R above 1, it grows exponentially until “herd immunity” stops it, meaning in this case that most Americans have caught the disease. It follows, then, that now that we have a vaccine for COVID-19, there should be one rule guiding its distribution: give it fast to the people most likely to get the virus and spread it to others. (There is some uncertainty how much the vaccines help to stop transmission. I assume here that they do, at least to a significant degree.) It may seem intuitive that vaccines should go first to those most vulnerable to the disease, but by targeting instead those most likely to spread the virus, we can end the pandemic and, in so doing, provide even greater protection to those vulnerable groups.

Nothing matters but the reproduction rate. That is not, however, the tack US public-health officials have taken throughout the pandemic, including in their approach to who should be inoculated first.

The recurring failure of our government response to this pandemic has been to fall behind the pace of the virus’s spread—to permit it to reach and sustain exponential growth. The US Food and Drug Administration wasted months when the vaccines were known to be safe, and wasted weeks over Thanksgiving delaying approval in a public-relations gambit. We have snafu after snafu in vaccine distribution. And we have vaccine rationing that is designed to do just about nothing to stop the spread. 

In fact, the reproduction rate has been about the last criterion in the allocation scheme. The first allotments of the vaccines are going to protect old folks in nursing homes. And this approach isn’t unique to the US: the UK gave its first dose to a 90-year-old. Germany to a 101-year-old. 

When combating exponential growth and heterogeneous spreaders, targeting matters, and speed matters even more.

It appears kindhearted to protect those who are most likely to die if they get the virus. It is a purely private benefit, so one might wonder why the recipients aren’t asked to pay anything for it. A policy that prioritizes the elderly is really an income transfer to old people in the form of a vaccine. 

If those same vaccines were given to frontline health-care workers, or to young partiers who just can’t seem to help themselves from giving it to 25 other people, including three grandparents, we’d curb the disease, we’d address the externality that one sick person can create many new sick people, and we’d protect old people, all much more effectively.

This is a hard choice, but it is one that competent public-health (and military) bureaucracies are supposed to know how to handle. It’s a classic trolley problem with one person on the left track and thousands on the right. Do you first give a vaccine to old people who are likely to die if they get sick with COVID-19—freeing them to go out a bit and freeing nursing homes from having to implement stringent protection requirements—but, in so doing, let the disease run rampant and the economy tank for another six months? Or do you give it in a way that stops the pandemic, to people who individually are less likely to die but, by being vaccinated, will not spread the disease? The overall death rate is lower in the latter case, but only because of reduced secondary infections, which makes it harder for the CDC to claim to have saved those lives. 

Public health knows how to do this—or used to. When we were eradicating smallpox, the response to an outbreak was to ring-fence the outbreak and vaccinate in order to contain the spread of the disease. They did not give the vaccine randomly to the whole population of a country, taking six months to a year to get everyone, protecting people by age, and meanwhile letting the disease spread exponentially. 

When combating exponential growth and heterogeneous spreaders, targeting matters, and speed matters even more. George Mason University’s Alex Tabarrok noted in a January 1 post on the blog Marginal Revolution:

The FDA should have approved the Pfizer vaccine, on a revocable basis, as soon as the data on the safety and efficacy of its vaccine were made available, around Nov. 20. But the FDA scheduled its meeting of experts for weeks later and didn’t approve until Dec. 11, even as thousands of people were dying daily. We could have been weeks ahead of where we are today. Now the epidemiologists are telling us that weeks are critical.

The issue is not just that thousands were dying daily, tragic as those deaths are. It’s that the disease was growing exponentially in this crucial 20-day period, and thousands upon thousands may die as a result of the delay. That’s a lesson that should have been painfully obvious from the January–March delays in addressing travel, not allowing tests to be used, not ramping up tracing while it could do any good, and so on. 

In a year, our bureaucracies have not wrapped their heads around a simple fact: the point is to stop the exponential spread of a disease, not (just) to protect individuals. Tests should be evaluated by their usefulness in stopping spread—and there, imperfect is far better than nothing—not only by their usefulness in diagnosing a given patient for treatment. Vaccines, used right, can stop the exponential spread of a disease, not just protect individuals—or, more accurately, enable them greater social interaction. 

One way to distribute vaccines that would target the reproduction rate R would be to create a free market for them on top of government distribution—a suggestion I have made previously, and been lambasted for. Only the government can artfully offset externalities and information problems, the critics say. Every single dose must be requisitioned to the government’s majestic planning effort; not one may be sold in order to allow willingness to pay guide the usefulness of the vaccine. Not even a hospital emergency room treating COVID-19 patients may spring money and butt the line.

What good has been achieved by banning a private market for vaccines on top of government allocation? The government is really not even thinking about the prime market failure—the externality that if I get the virus I might give it to you. In ignoring that, it is mostly just achieving an income transfer to favored groups. 

Suppose there were a free market in vaccines. The only difference is, the government would have to buy at market prices. How would this world look different from ours? First, I think we would see much quicker allocation to health workers. Even if the government were not willing to buy and give it to them, hospitals would pay whatever it takes to give it to staff in their COVID-19 units immediately. They are forbidden from doing that now. 

Second, people and businesses that know they are hosts to spreading events could buy the vaccine. There is a lot of private incentive to combat an externality! 

Third, the government could do exactly what it is doing now. It just might have to pay more. If you are a huge fan of the CDC’s allocation scheme and its brilliant targeting of externalities, public goods, information problems, and every other fable from Econ 101, along with its new social justice and equity goals, fine. It can keep doing that. The Treasury just might have to pay a bit more. 

So the ban on private sales comes down to one thing only: money. The government is keeping down the price it has to pay by forbidding you and me and businesses that could hire back lots of employees from bidding for the vaccine. This is the same government that has borrowed $5 trillion already, and, as of the time of writing, is discussing $1,400 checks, far more than the free-market cost of a vaccine. 

Nothing matters but the reproduction rate. R < 1, and the virus goes away. R > 1, and it explodes. And given a reproduction rate, nothing matters but how quickly you get on top of exponential growth. Time is exponentially valuable.

John H. Cochrane is a senior fellow of the Hoover Institution at Stanford University and distinguished senior fellow at Chicago Booth. This essay is adapted from a post on his blog, The Grumpy Economist.