In Early Stages of Coronavirus Fight, the Private Sector Was Ready to Help, But the Federal Government Didn’t Let It
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In Early Stages of Coronavirus Fight, the Private Sector Was Ready to Help, But the Federal Government Didn’t Let It

Instead of quickly tapping the private sector to develop and conduct tests, the federal government prevented it from doing so. Weeks, and lives, were lost as a result.

As governments across the world scramble to control the spread of the COVID-19 virus, the U.S. federal government is rightfully receiving scrutiny for its response. The federal government’s biggest failures in dealing with the coronavirus have come in areas it should be better at, particularly in terms of clearly communicating and disseminating useful, accurate information to the public and to other government agencies, and enabling private sector partners to help with the crisis.

In times of a pandemic or national crisis, a key role of the federal government is to communicate with citizens, federal agencies, state and local governments and others involved in the response.  This role is vital. For a pandemic that affects all corners of the country, the dissemination of local knowledge from lower-level governments and providers by the federal government helps guide the federal response. That response should also include the best information available being consistently communicated to citizens, but also to the lower-level agencies and the private health care organizations that will ultimately be responsible for providing resources for testing and treatment.

However, the Trump administration initially downplayed the potential consequences and disruptions that COVID-19 could bring to the United States. On Jan. 22, Trump discussed coronavirus on CNBC:

“Have you been briefed by the CDC?” Kernen asked.

“I have,” Trump replied.

Kernen then asked: “Are there worries about a pandemic at this point?”

Trump said: “No. Not at all.” “And, we’re, we have it totally under control,” Trump said. “It’s one person coming in from China, and we have it under control. It’s going to be just fine.”

In late February, Trump continued to downplay the potential impacts:

Feb. 26: “Because of all we’ve done, the risk to the American people remains very low. … When you have 15 people, and the 15 within a couple of days is going to be down to close to zero. That’s a pretty good job we’ve done.”

Feb. 28: “I think it’s really going well. … We’re prepared for the worst, but we think we’re going to be very fortunate.”

Feb. 28: “It’s going to disappear. One day, it’s like a miracle, it will disappear.”

In contrast, South Korea’s much-praised response to the pandemic illustrates how a national government can be effective in a pandemic when it communicates clearly and openly, focusing on where its advantages are: South Korea identified the problem, communicated it very clearly to its citizens, and secured contracts with private organizations for testing kits and other needed supplies.

That doesn’t require a single-payer, government-run health care system or onerous bureaucracy. Instead, it requires effective agencies that give the right signals and information to health care providers, private sector partners, and the general public. South Korea took full advantage of the vital local knowledge that local health care providers and lower-levels governments could give the national agencies, which helped its government provide an effective response.

South Korea wouldn’t have had nearly the success it has had in fighting against COVD-19 without extensive private sector help in getting critical tests and supplies to health care providers. And South Korea wouldn’t have been able to effectively tap into the private sector’s ability to provide the equipment without its government providing the right signals for manufacturers about what equipment would be needed and on what timetable. South Korea told the private sector it needed tests and the private sector quickly delivered.

In the U.S., the federal government has largely failed in this role and nowhere is that more evident than in the lack of COVID-19 testing and how it compares with South Korea. Science reports:

Behind its success so far has been the most expansive and well-organized testing program in the world, combined with extensive efforts to isolate infected people and trace and quarantine their contacts. South Korea has tested more than 270,000 people, which amounts to more than 5200 tests per million inhabitants—more than any other country except tiny Bahrain, according to the Worldometer website. The United States has so far carried out 74 tests per 1 million inhabitants, data from the U.S. Centers for Disease Control and Prevention show.

Testing individuals for the presence of a virus provides critical pieces of knowledge that inform an effective response to a pandemic. Unfortunately, in the United States, the initial federal response from the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration was to block private testing. Bloomberg details how the feds failed to take advantage of the private sector:

But a review of the government’s regulation of testing up to this point reveals an even more troubling conclusion: Washington missed an early opportunity to leverage the resources of the private sector, states and top-flight academic institutions to do what other countries have done to contain the virus — test as many people as possible. Instead, health authorities were left with a diagnostic tool developed by the U.S. Centers for Disease Control and Prevention that ran into weeks of problems, hobbling efforts to track and control the virus at a time when it might have been contained.

Likewise, Cato Institute’s Jeffrey Singer notes:

As of March 11, the U.S. trailed most of the developed world in tests administered, with per capita numbers virtually the same as Vietnam’s.

A rigid federal regulatory regime that fails to make use of the innovation, flexibility and speed of the private sector is largely to blame.

Testing is essential to managing an epidemic. It allows public health officials to determine who is infected and needs isolation from others and which of their contacts need isolation, as well. Such information allows for more precise targeting of public health responses, making it possible to avoid quarantining the entire population and shutting down large swaths of the economy, as we have had to do.

When Seattle-area health care professionals began testing patients for COVID-19 in January 2020, the CDC repeatedly told them to halt due to a lack of an available COVID-19 test created in a certified “clinical” laboratory. Americans should be very thankful for those brave souls who opted to violate the federal policy and test people:

A New York Times report outlined how restrictions imposed by the federal government greatly limited the ability of Washington state to track and test the spread of coronavirus in its early days.

The state’s early detection of coronavirus began with Seattle Flu Study Director Dr. Helen Chu, who is credited with first identifying its presence in Washington.

“She’s a true American hero, [who] actually broke this epidemic identified in Washington state when no one else wanted her to test for the virus,” Harvard Chan School of Public Health epidemiologist Dr. Eric Ding told KIRO Radio’s Gee and Ursula Show. “Without her, this epidemic could have been 10 times worse.”

While Dr. Chu had a test that worked, but the federal government did not allow, the CDC’s own COVID-19 test kits were performing poorly and causing devastating delays. Neither CDC nor the U.S. Department Health and Human Services, which oversees CDC, have offered a full explanation about why their tests were unreliable and so limited in number. For an agency already under fire for slowing the response to COVID-19, refusing to answer legitimate concerns about its own practices does not work to instill public trust, which is greatly needed in a time in which agencies expect citizens to make drastic changes in their lives.

As it tries to make up for lost time and mistakes, the federal government needs to ensure it doesn’t hamper progress with red tape. The administration and federal agencies finally appear to be making some progress in fast-tracking items and states are reducing unnecessary laws. As Robby Soave wrote at Reason.com:

It’s important to remember that bureaucracy is not some mere inconvenience. Jumping through government-mandated hoops is expensive and time-consuming. It destroys value. And dealing with red tape makes people more likely to get frustrated and give up. When the country’s very fate depends upon government forces getting out of the way of non-government forces so that they can create better testing, and eventually a cure for COVID-19, toiling under powerful and incompetent regulatory agencies is quite literally a health hazard. That’s the case for shrinking them, even when we’re not in the midst of a crisis.

Now that FDA has loosened its rules and private labs have been freed up to create and conduct tests, the U.S. is experiencing an uptick in testing, as Bloomberg reports:

Commercial lab-testing ability should grow to more than 20,000 tests per day once large diagnostics platforms become available this week, more than doubling U.S. testing capacity to date. By April 1, commercial labs may be able to process more than 280,000 tests a week, according to an industry group’s estimate.

Labs like the University of Washington can also start running their tests. Once the FDA put out the new rules, University of Washington Medical Center had its own testing running within 48 hours…

The private sector was ahead of the U.S. government. But instead of quickly tapping the private sector to develop and conduct tests, the federal government prevented it from doing so. Weeks, and lives, were lost as a result. Once the federal rules, bureaucracy and red tape were removed, the private sector jumped in and made vast improvements. Hopefully, the federal government will learn from its mishandling of the coronavirus pandemic and reduce the unnecessary, harmful rules and regulations that prevented the private sector from doing even more, even sooner.

Austill Stuart is the director of privatization and government reform at Reason Foundation and editor of Reason's Annual Privatization Report.