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A Renewed Pandemic Threat

November 24, 2017

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A multinational business with people and assets around the world plans for a host of contingencies, from a financial crisis to operations in unstable countries. But does its leadership give enough thought to keeping the company operating in the face of a widespread pandemic influenza outbreak?

In the event of a health crisis - such as a pandemic - health departments may order or request that cities and countries to take a variety of actions, many of which would have serious economic repercussions.

Corporations need to be prepared for pandemics as part of their overall emergency preparedness and business continuity strategy. Boards and CEOs need to think through whether, and how, their business will respond to, and survive through, when the next highly pathogenic influenza virus evolves from an animal from a country far away, into a situation that involves tens or hundreds of millions of infected persons in the U.S. and in any number of other countries where the business may have operations.

‘Even with modern antiviral and antibacterial drugs, vaccines, and prevention knowledge, the return of a pandemic virus equivalent in pathogenicity to the virus of 1918 would likely kill >100 million people worldwide,’ according to the Center for Disease Control and Prevention (CDC). A 2006 CDC report warned that a ‘pandemic virus with the (alleged) pathogenic potential of some recent H5N1 outbreaks could cause substantially more deaths.’

Throughout human history, new pathogens, and those that sustained and thrived, have caused outbreaks resulting in morbidity and mortality. In the 14th century, the Black Death, also known as ‘the plague’, took the lives of an estimated 75 million people worldwide, over a four-year period. Almost 50 percent of Europe’s population succumbed to this bacterium, now treatable with antibiotics, if recognized early. For over 500 years, until it was considered eradicated in 1978, smallpox, like the plague before it, killed millions.

Following the spate of anthrax attacks in the United States in 2001, attention shifted from naturally occurring outbreaks to the use of bacteria and viruses as weapons. Fortunately, the death toll from the anthrax attacks was low and rapid vaccination with concomitant administration antibiotics saved the lives of others exposed to the bacteria that was made into a powder that carried through the air.

It is not without purpose that our attention continues to return to the ‘Spanish’ Influenza outbreak in 1918 - 1919. A debilitating disease that spread easily from person to person (classified as contagious), it infected an estimated 500 million people with total deaths of 50 - 100 million. To put this in perspective, this was at a time when there was no air travel and boats and trains moved slowly.

Today, a Boeing 747, with recirculated cabin air, carries 400 people between continents in hours, not days, with arriving passengers spread in all directions. Imagine now, that one of those passengers is carrying a highly pathogenic virus, one that has a great likelihood of causing disease, proceeds to spread that virus to 10 - 20 fellow passengers through a sneeze or cough, while walking to the lavatory and back to their seats, with the droplets (which will travel about three feet) then inhaled by those near our ‘patient zero.’

‘Patient zero’ deplanes, spreading the virus to the customs officials, passengers waiting in line for their baggage and the cab driver as they make their way to a hotel. At the hotel, ‘patient zero’, displaying the worst in courteous behavior, sneezes on the counter. The desk clerk slides the room keys to our patient zero, picking up the virus on her hand, and then rubs her nose with an itch. Not only does ‘patient zero’ tip the bellman, he gives him viral particles and then proceeds to the elevator where 10 weary travelers heading to their rooms are exposed when our patient coughs some more, infecting them all. Feeling ill, some guests choose to stay at the hotel while others seek the comfort of home to suffer through the symptoms, spreading the virus to more and more people.

Within 48 hours after the plane’s arrival, local physicians, hospitals and urgent care centers note an increase in patients suffering from a particularly terrible ‘case of the flu.’ Some astute physicians prescribe Tamiflu, which shortens the duration by 1.3 - 1.5 days. Antibiotics don’t do anything to reduce the duration or intensity of influenza; they have no effect on viruses. Antibiotics instead work on the bacterial infection if pneumonia develops as a complication of the flu.

Ten days after the plane landed, the number of patients has grown to such an alarming level that state health departments are getting reports from cities and counties, prompting calls to the CDC from city and state officials. Almost all states have reported a drastic increase in deaths from this new strain of flu, particularly in people over 65, one that this year’s vaccine doesn’t appear to provide protection against.

Taking Care of Business

The world of biological threats can be confusing and it is helpful to clarify a few terms:

  • An endemic disease is one that has ongoing activity in a geographic area, such as cholera in regions of India, or malaria in Sub-Saharan Africa.
  • An epidemic is where there is an increased, and often sudden number of cases of a disease during a given time period.
  • A pandemic is an infectious disease that spreads through human populations across a large region, such as a continent, or across continents; in other words, it’s an epidemic worldwide or over a very wide area, crossing international boundaries and effecting a large number of people.

When the CDC observes a widespread outbreak of an infectious disease, particularly one that  is highly pathogenic, it notifies state and local health departments and works with the World Health Organization (WHO) to understand the magnitude of the outbreak and what international coordination efforts are required to stop the spread of the disease. Each country may then put in place their own measures to stop the spread. This may include halting incoming flights from several or all affected countries. They may also choose to screen incoming travelers from select countries for signs of flu.

Ultimately, it is close contact that spreads the virus from person to person: events where droplets may be left on surfaces, offices, banks, or events where people shake hands (social gatherings and company parties, for example). State health departments will respond in kind. Actions taken may include an order from the state or a large city health department to halt mass gatherings, concerts, sporting events or any other type of event where large numbers of people come in close contact with one another.

In addition to the aforementioned actions, an even more dramatic impact to corporations and businesses will result from people calling in sick, including those that work at local power plants, water treatment facilities, and sewage treatment plants. Your employees may not be directly affected by these closings, but they will feel the impact when mass transit shuts down; fire, police and emergency medical (EMS) services are dramatically reduced; and EMS is so overwhelmed with calls that they only respond to heart attacks, respiratory arrests, strokes and major trauma. During the 1998 heat wave in New York City, calls for EMS reached an all-time high, slowing response time, and forcing the lowest priority calls to be triaged in terms of need.

A Preparations Checklist for Leadership

The planning for every company should start with prevention and education. Encourage your employees to get a flu shot annually, or even better, offer on-sight flu shots at part of your company’s benefits package, and consider becoming a dispensing point for antiviral medication in advance of an outbreak. Stress the importance of the basics, such as covering the mouth  and nose with a tissue or arm before coughing; washing hands; being conscientious of avoiding touching the mouth, nose or eyes; and avoiding crowded places (including the office) if feeling ill. Stations with hand sanitizer should be part of the office environment all year long, and during an outbreak, reinforcing the need to use them is crucial. Giving each employee a small bottle of sanitizer is another way to emphasize the importance of using it regularly. Employers may also want to consider pre-stocking supplies, such as masks, to have on-hand in the event a health crisis; having a supply of masks during an outbreak, of the N95 model, is important. During the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003, it was impossible to get this model of mask; manufacturers could not keep up with demand.

Next, have plans in place for employees to work remotely, forward calls home and have access to the company’s IT systems. Many employees already do this in some fashion, at home or while traveling. It’s also important to identify those positions and employees that are essential to keeping your operations running. For each of these positions there should be several backups.

Have a plan for hierarchy of authority to make critical decisions. In government, the concept is called Continuity of Government and involves identifying those executives that are capable of leading if the CEO, COO, CFO or their deputies become incapacitated.

Keep your Board informed about the status of operations and the financial impact of the reduction or suspension of operations. They should understand your crisis plans before anything happens. Brief the Board at least once a year so there are no surprises during an emergency.

Have a plan to communicate with employees during an emergency, particularly if you want them to stay home or want only identified essential employees to report to work.

Leadership should also take into consideration whether the company’s vendors will be able to continue to supply the company with the goods necessary to keep business operating. This includes the trucking company that moves goods to company facilities and to customers. In the event of a pandemic many, if not all of a company’s supply chains and freight carries may be shut down.

Check with the company’s insurance carrier to find out if business interruption is covered when the cause is a pandemic influenza outbreak.

Track lost revenue and other costs related to the business disruption.

One final word: employees will be frightened when an outbreak occurs. Support them in every way possible, including having crisis or grief counselors available. They may lose family members, colleagues and friends. Communicate your feelings, and let them know they’re not alone during such a horrible time.

The next outbreak is imminent; it is only a matter of time. Ill-equipped corporations will spend millions to remedy the widespread impact a pandemic will inevitably have on their operations. It’s time to start asking questions about how to prepare rather than asking how to explain to shareholders that no thought was given to preparation. In the aftermath of a pandemic, unprepared CEOs will be asking, is this the first day of the rest of their careers or is it the last?

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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