Case Study: Impact of a pandemic crisis on business

Case Study: Impact of a pandemic crisis on business

Impact of the 1918 influenza pandemic

• Internationally, 50-100 million people died, 25% of Americans were infected, with three-quarters of a million dying; 10-20% fatality

• Up to 50% infection rate• In the second wave it had rapidly mutated to a deadlier form• In Minnesota the Dept. of Health closed schools, churches, theaters, & billiard

parlors (bars).• MN mortality rate was 3.9%• Highest mortality rates were with ages 18-40 (primary workforce)• Average life expectancy in the US dropped by 12 years• Business declined 40-70% in Arkansas• Retail grocery was reduced by 1/3• Retail businesses losing equivalent of $130,000 per day• Many businesses experienced double-digit losses in revenue

PBS movie on the 1918 Influenza

• Up to 200 million people infected (5-25%)

• 40 – 90 million people clinically ill

• 18 – 42 million outpatient medical visits

• 314,000 – 733,000 people hospitalized

• 89,000 – 207,000 deaths

• US losses estimated at $71 -$166 billion

• Many geographic areas simultaneously affected

Source: Centers for Disease Control and Prevention

Potential Current Impact of Pandemic influenza in the U.S.

See additional results of business survey on pandemics

Deaths Caused by Contagious Disease

Rapid global transmission routes

Projected progression of infection

http://www.rms.com/Publications/Influenza_Pandemic_Risk.pdf

Initial outbreak in cities

Peak of infection across the US

Recovery period with latency in some cities

In 2009 the federal government originally promised 120 million doses of H1N1 flu vaccine but only 13 million were delivered on time

Few pharmaceutical companies produce

the vaccine

The chicken-egg method for vaccine production takes 6 months; limited production

30 farms contracted to produce eggs

FDA testing for purity/potency

Delays in inserting vaccine in syringes

Poor distribution due to insufficient volumeImmunity develops two

weeks after vaccination

FDA licenses vaccine

Influenza outbreak

Highly mutative changing of protein

coat makes virus unpredictable

WHO/CDC alerts epi/pandemic

The effects of systemic delays

Close proximity of animal carriers & mutability of virus

Virulent transmission rate of virus

due toHigh mobility

& global transportation

rate, and densely

populated areas

Overwhelmed health care

system

Breakdown in transportation

system

High work absenteeismQuarantines

& closings of public and

private buildings

Shortages in food, medical,

technical supplies

Business closings & unemployment

Reduction in industrial output

Rapid mutations among strains of

flu prevent stockpiling of

vaccinations for prevention

Widespread PTSD and mental health problems & long

term increased risk of birth defects

Rush on stores for

medicines & supplies

Depending on time of year,

Winter outages may be severe

High levels of complications

& death

Sample systems map of possible effects

• From initial exposure, it can take up to 2 days before feeling sick• Impact will likely last 12-18 months, with 2-3 waves of illness, each lasting 6-8

weeks• Influenza disproportionately affects 18-40 y/o (e.g., the workforce)• Estimated 35-50% of community will become ill• Potentially high levels of sickness & death (25-50% fatality)• US Dept of HHS estimates up to 2 million deaths• Workplace absenteeism up to 40% depending on severity• Disruption of critical services, both governmental and private• Disruption of supply chains• Significant decline in retail trade• School & business closings• About 50% of ill will seek healthcare• Healthcare facilities and staff overwhelmed; insufficient staff, beds, medications,

ventilators, etc.• World Bank estimates global cost of $800 billion• Cost in US could reach $166 billion (1/5 of GDP)• Economic loss• Higher infection rates with low income & minorities who live in more congested

urban areas• Some businesses may lose as much as 50% revenues

Projections for the next pandemic

Draw a systems map of the potential impact of a pandemic on local business.

How would these changes impact your business?

To what extent does your business have a pandemic response plan?

Examples of Business Specific Plans

Engineering/physical controls• Drive through customer windows• Installing clear plastic sneeze guards• Provide hygiene materials• Develop computer-based communication• Design work to minimize direct interpersonal contact

Work practices• Promote personal hygiene (tissues, no touch trash cans, hand sanitizer,

disposable towels to clean work surfaces, no handshakes, etc.)• Encourage workers to get seasonal flu shot • Education on risk factors (sneeze etiquette, avoid touching eyes, etc.)• Find ways to minimize contact among workers, suppliers, and customers;

work remotely when possible• Don’t use other workers phones, computers, or equipment• Removal of shared materials such as magazines, cups, papers• Cross-training for employees• Documentation of procedures

Administrative controls• Develop Pandemic Planning & Response Team• Conduct business impact analysis• Plan for various scenarios for changes in workforce and demand in

products/services• Identify essential tasks, critical inputs, and employees for business

maintenance• Develop backup relationships with alternate suppliers• Estimate feasibility of continuing work under different scenarios, and

contingencies for each• Contract and train ancillary workers • Policy encouraging ill workers to stay home without fear of reprisal• Discontinue travel on nonessential personnel to high prevalence areas• Practices that minimize face-to-face work (e-mail, teleconferences,

telecommuting, flexible work hours)• Home delivery to reduce customers coming to workplace• Develop emergency communication plans, Internet based forum for

answering concerns & questions• Collaborate with insurance companies, health care experts, emergency

responders & others to ensure plans

http://www.pandemic.net.au/files/SA_local_Govt_Pandemic_Business_Continuity_Guidelines.pdf

Potential large scale consequences of a pandemic

What might be some large-scale changes that could follow a major pandemic?

• Change in the balance of governmental stabilities and relationships

• Change in the way we work: more reliance on telecommunications, virtual teams, & remote work

• Business restructuring

• Changes in the way we shop, relate, and educate

• Stimulation of health professions and research

• Stimulation of entrepreneurships to replace lost businesses and business recovery consulting

• Increases in both competition and collaboration

• Canadian business guidelines

• Minnesota recommendations

• Centers for Disease Control

• Flu.gov (includes recommendations for business, schools, communities, etc.)

• Managing influenza pandemic risk (includes fictional scenario & timetable)

• Business planning pandemic checklist

• Business preparedness for pandemic

• Predicting organizational crisis readiness

Recommended sites for more information