London School of Hygiene & Tropical Medicine

How people react to a flu pandemic could cost the British economy significantly more than the costs associated with pandemic-related illness and death, according to new research.

Experts at the London School of Hygiene & Tropical Medicine have found out that closing schools or staying away from work to avoid catching influenza risks quadrupling the amount of money lost to the economy as a direct result of the virus.

With the recent swine flu (H1N1) outbreak fresh in the minds of the public and policymakers, the importance of planning for the possibility of a global infectious disease pandemic is clear. There is always concern about the impact of future pandemics but the authors say that in the current financial climate we must be especially aware of the direct and indirect economic effect. However, current preparedness planning tends to concentrate on population health and maintaining a functioning health sector rather than the wider economic impact with its long term implications.

In a study in Social Science & Medicine, Professor Richard Smith and colleagues -Dr Marcus Keogh-Brown, LSHTM, and Professor Tony Barnett, LSHTM and the London School of Economics and Political Science (LSE) - estimate the economic impact of policies introduced in response to a pandemic could run into many billions of pounds.

Calculations are based on 35% of the population being infected and investigate scenarios where the death rate ranges from mild (0.06%), to moderate (0.18%) to severe (0.35%). Using computer modelling to look at the impact on the working population of deaths and absenteeism, the authors estimate pandemic flu would reduce GDP by 0.3% (£.3.5bn), 0.4% (£5bn) and 0.6% (£7.4bn) for the three disease scenarios. But they conclude that this is lower than policies put in place to prevent the spread of infection such as school closures and “prophylactic absenteeism” where healthy people take time off work during an outbreak of infection. These two measures combined would result in a reduction in GDP of 1.1% (£14.7bn) in a mild scenario, 1.3% (£16.3bn) for a moderate situation and 1.4% (£18.5bn) in a severe case.

The most severe sensitivity scenario, which combines the worst of all impacts as a “doomsday” scenario, results in a 2.9% (£37.4bn), 3.2% (£41.4bn) and 3.7% (£47.5bn) loss to GPD respectively for the three scenarios.

The authors write: “Overall results indicate that the disease itself is not necessarily the greatest concern from a macroeconomic perspective ... It is therefore important to consider the epidemiological impact of school closure and prophylactic absenteeism and to attempt to strike a balance between policies affecting these and durations of absence that are necessary from a public health perspective without imposing unnecessary economic impacts. This raises a particular problem for Governments which must steer a difficult path between advice to ‘carry on as usual’ and ‘social distancing’ measures which may slow down the rate at which an epidemic grows.”

Professor Smith says: “The main message of our research is that any government, regardless of political complexion, is in a no-win situation. As we saw with ‘swine’ flu, if it stockpiles medicines which are not then used it is damned by sections of the press; if it failed to take ‘proper’ precautions and the worst happened it is also damned.

“In these circumstances, many issues of democracy, explaining the situation to citizens, the role of devolved administrations in the UK, the responsibilities of the media and over-sensitivity on the part of responsible departments of state are raised in an acute form.”

• Smith, R.D., Keogh-Brown, M.R., Barnett, T. Estimating the economic impact of pandemic influenza: An application of the computable general equilibrium model to the UK, Social Science & Medicine (2011)