Case Study: Impact of a pandemic crisis on business

1. Case Study: Impact of a pandemic crisis on business

4. 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

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

7. Deaths Caused by Contagious Disease See additional results of business survey on pandemics

8. Rapid global transmission routes

9. Projected progression of infection Initial outbreak in cities Peak of infection across the US Recovery period with latency in some cities http://www.rms.com/Publications/Influenza_Pandemic_Risk.pdf

10. In 2009 the federal government originally promised 120 million doses of H1N1 flu vaccine but only 13 million were delivered on time FDA licenses vaccine 30 farms contracted to produce eggs Few pharmaceutical companies produce the vaccine The chicken-egg method for vaccine production takes 6 months; limited production Highly mutative changing of protein coat makes virus unpredictable The effects of systemic delays FDA testing for purity/potency WHO/CDC alerts epi/pandemic Delays in inserting vaccine in syringes Influenza outbreak Poor distribution due to insufficient volume Immunity develops two weeks after vaccination

11. Sample systems map of possible effects Depending on time of year, Winter outages may be severe Virulent transmission rate of virus due to High mobility & global transportation rate, and densely populated areas High work absenteeism Quarantines & closings of public and private buildings Close proximity of animal carriers & mutability of virus Overwhelmed health care system High levels of complications & death Business closings & unemployment Reduction in industrial output Shortages in food, medical, technical supplies Breakdown in transportation system Rush on stores for medicines & supplies Widespread PTSD and mental health problems & long term increased risk of birth defects Rapid mutations among strains of flu prevent stockpiling of vaccinations for prevention

12. Projections for the next pandemic • 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

13. 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?

14. 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

15. 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

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

19. Potential large scale consequences of a 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 What might be some large-scale changes that could follow a major pandemic?

20. Recommended sites for more information • 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