California study finds high cost with lack of pandemic preparedness
California’s Senate Bill 275 would require the state to create a personal protection equipment (PPE) stockpile, but a U.C. Berkeley study shows the high human and dollar toll the lack of PPE has already created in the state.
The August 2020 study estimates over 50,000 essential workers in California were diagnosed with COVID-19 due to a lack of proper PPE. Had PPE been available, the study estimates over 20,000 workers could have avoided the virus.
Had California purchased a PPE stockpile in advance at non-pandemic prices, the study found the cost would be 17% of the projected amount needed to purchase the same equipment at current pandemic-inflated prices.
“The federal government, despite its bulk purchasing power, reportedly placed no-bid contracts for N95 masks at an average of 6 times normal prices, with higher prices for earlier delivery,” the study reads.
On April 7, California signed a bulk contract with an unproven supplier for 300 million N95 masks at $3.30 per mask, but delivery did not happen until June 2020 and later.
The senate bill “would require the State Department of Public Health to establish a personal protective equipment stockpile to ensure an adequate supply of PPE for health care workers and essential workers, as defined, and would require the stockpile to be at least sufficient for a 90-day pandemic or other health emergency.”
The study indicates a stockpile of 12.5 million pieces of PPE are needed to support hospital staff within the first 90 days of a pandemic in California. Health care workers outside of a hospital also require significant numbers of PPE, but they use different types of PPE.
The study also found total stockpile numbers vary from setting to setting, as nursing home workers may burn through PPE faster than other health care workers due to the high-risk environment.
The researchers estimate two surgical masks, one face shield, two isolation gowns, two shoe covers, and nine pairs of gloves would be needed with one N95 mask for the PPE stockpile.
“For non-healthcare essential workers,” the study reads, “we assume one mask and four glove pairs per work day, i.e. 64 masks and 257 glove pairs per worker over 90 days.”
For a 90-day supply of all listed PPE for health care workers, the pre-pandemic cost is estimated at $49.2 million per one million workers, while the current pandemic cost is about $328.1 million per one million workers.
If PPE is stockpiled at pre-pandemic cost, California could look at a savings of $279 million. The true cost depends on when PPE is purchased and the number of workers it’s needed for.
“Per the above price estimates, purchasing real-time PPE for California’s essential workers and related key populations would cost over $808 million if procured at pandemic prices,” the study found. “Alternatively, prospectively procuring the same PPE at non-pandemic prices would cost only $134 million, i.e. 17% of the cost at pandemic prices.”
When it comes to all essential workers, both health care and non-health care, for 5.3 million people the pre-pandemic costs would have been $134.4 million and the current pandemic costs would be $807.7 million, with a total savings of $673.3 million.
“As of July 28, 2020, the state reported having distributed 89 million N95 masks, a substantially larger number than we have estimated as the need for essential workers. It is unclear what portion of these were for essential worker use during the first 90 days of the pandemic,” the study reads. “However, if we assume that the N95 portion of the stockpile were increased to 89 million, the stockpile cost would increase to $215.5 million at pre-pandemic prices. The cost at pandemic prices would increase to $1.184 billion, implying an even larger 89% savings from advance purchase.”
Typically, a stockpile is a form of insurance, with the cost of the stockpile similar to an insurance premium. If the stockpile wasn’t needed, some could view the cost as a waste, the study reads in part.
“…the COVID-19 pandemic has sadly illustrated how myopic it is to go “uninsured” without an adequate PPE stockpile.”
According to the study, over 250,000 essential health care workers in California received unemployment benefits as a direct result of a lack of PPE. If PPE had been available from the beginning, the state could have saved $93 million in unemployment insurance claims.
“The total avoidable social costs of unemployment insurance payments and the value of lost life could easily each reach the hundreds of millions of dollars in the next pandemic, making a PPE stockpile an urgent investment,” the study reads. “The benefit of this preventive investment is even greater considering the hundreds of millions of dollars in procurement costs that could have been saved had a stockpile been established in advance at non-pandemic prices.”