HHS urges business to plan for pandemic as economic impacts assessed

Dec 9, 2005 (CIDRAP News) – Large businesses should examine their sick-leave policies and figure out ways to limit face-to-face contact, among many other steps to prepare for an influenza pandemic, according to a planning checklist released by federal health agencies this week.

The list provided by the US Department of Health and Human Services (HHS) also calls on businesses to try to predict and allow for employee absenteeism and to set policies on restriction of travel to affected areas.

Release of the checklist came the same week as a Congressional Budget Office (CBO) estimate of the economic impact of a pandemic and a House committee hearing on economic and other implications of the pandemic threat.

"In the event of a pandemic, planning by business leaders will be critical to protecting employees' health, limiting the negative economic impact and ensuring the continued delivery of essential services like food, medicine and power," HHS Secretary Michael Leavitt said in a news release about the business checklist. Leavitt and other officials presented the checklist at a Business Roundtable meeting in Washington, DC, Dec 7.

Earlier this week, HHS officials said they estimate that at the peak of a pandemic, up to 40% of people might stay home from work or school, either because of their own illness, a need to care for others, or fear of catching the flu. The estimate was cited by Dr. Bruce Gellin, head of HHS's National Vaccine Program Office. The HHS pandemic flu plan says that a severe pandemic, similar to that of 1918, could sicken up to 90 million people, or about 30% of the population.

In a recent survey, 70% of 179 companies said they would need help in determining how to prepare for a pandemic, and almost 40% said there wasn't much a company could do to prepare, according to a Bloomberg News report. The survey was conducted by the consulting firm Deloitte & Touche USA LLP and the ERISA Industry Committee, a nonprofit organization.

Suggested planning steps
HHS's "Business Pandemic Influenza Planning Checklist" is intended for large businesses, but it doesn't spell out how large. It was prepared by the Centers for Disease Control and Prevention. The list offers 35 suggestions grouped in six categories. Below are some sample suggestions from a few of the categories.

  • Plan for the impact of a pandemic on your business:
    • Identify a pandemic coordinator and/or team with defined roles and responsibilities for preparedness and response planning.
    • Identify essential employees and other critical inputs required to maintain business operations.
    • Determine the potential impact of a pandemic on company financial results under multiple possible scenarios.
    • Establish an emergency communications plan.
  • Plan for the impact of a pandemic on your employees and customers:
    • Forecast and allow for employee absences during a pandemic due to factors such as personal illness, family member illness, and quarantines.
    • Implement guidelines to modify the frequency and type of face-to-face contact among employees and between employees and customers.
    • Encourage and track annual influenza vaccination for employees.
  • Establish policies to be implemented during a pandemic, including:
    • Compensation and sick-leave absences unique to a pandemic, including policies on when a previously ill person can return to work
    • Flexible worksite (eg, telecommuting) and flexible work hours (eg, staggered shifts)
    • Restricting travel to affected geographic areas, evacuating employees working in or near an affected area, and guidance for employees returning from affected areas
  • Coordinate with external organizations and your community:
    • Collaborate with federal, state, and local public health agencies and/or emergency responders to participate in their planning processes.
    • Share best practices with other businesses.

Potential economic damage assessed
Release of the checklist came the day before the CBO issued estimates of the possible economic impact of a flu pandemic.

In a report prepared at the request of Senate Majority Leader Bill Frist, R-Tenn., the CBO estimated that a severe pandemic like that of 1918 would cut gross domestic product (GDP) in the ensuing year by about 5%. By comparison, the typical business recession in the United States since World War II cut GDP by 4.7%, the report says. The estimate is based on a pandemic scenario involving 90 million illness cases and 2 million deaths.

In a milder pandemic, like that of 1957 or 1968, GDP would be reduced by about 1.5%, according to the CBO. This "probably would not cause a recession and might not be distinguishable from the normal variation in economic activity," the report says. This second scenario assumes 75 million cases with about 100,000 deaths.

The CBO report was criticized as misleading by Michael T. Osterholm, PhD, MPH, a leading pandemic preparedness proponent and director of CIDRAP, publisher of this Web site. He called the report "overly simplistic" because the CBO assessed only two types of economic impacts: lost work days and reduced sales due to restricted social interaction.

"Had they done a more thorough evaluation, they would have looked at the loss of supply-chain integrity," Osterholm told CIDRAP News. "The inability to transport products would result in a much greater impact" than the CBO estimated.

Osterholm gave his own view of the potential economic damage at a Dec 7 hearing of the House Committee on International Relations.

He predicted that a severe pandemic would bring "an abrupt halt" to global, regional, and national economies. "Foreign trade and travel will be reduced or even ended in an attempt to stop the virus from entering new countries—even though such efforts will probably fail given the infectiousness of the virus and the volume of illegal crossings at most borders," he said.

He predicted that curtailment of international trade will trigger shortages of critical products, such as those needed to maintain water, power, and communication systems and meet health needs unrelated to flu prevention and treatment.

As a prime example of an area demanding "critical product continuity" planning, Osterholm said the US pharmaceutical industry obtains more than 80% of its raw materials from foreign sources. "Any interruption of trade and transportation of multiple regions of the world will result in numerous pharmaceutical products not being available in this country or at the minimum, they will be in very short supply," he said.

He added that the common business practice of maintaining very limited inventories of raw materials and products will likely exacerbate the problems if a pandemic interrupts trade.

"We must understand the implications and plan for the shutdown of our global economy and supply chains now, not during a pandemic," Osterholm asserted.

See also:

Dec 7 HHS news release
http://archive.hhs.gov/news/press/2005pres/20051207a.html

Business planning checklist
http://www.flu.gov/professional/business/businesschecklist.html

Nov 29 CIDRAP News story "Business leaders stress importance of pandemic planning"

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