May 26, 2020 update

Almanac

RESPONDING TO COVID-19

2© Oliver Wyman

INTRODUCTION: COVID-19 ALMANAC

Context and purpose

The novel coronavirus has infected hundreds of thousands of people globally and is taking a severe toll on individuals, families, and economiesas productivity drops and stock markets reflect increased global uncertainty

This document provides some baseline facts and guidance for business leaders as to critical questions to address in the immediate and near-termto ensure the continuity of their business and the safety, health, and wellbeing of their workforce and customers

What is it?

COVID-19 is the name for the illness caused by the novel coronavirus that originated in Wuhan, China in December 2019

It is from the same family of viruses that cause some common colds, as well as Severe Acute Respiratory Syndrome (SARS) and Middle East Respiratory Syndrome (MERS)

It is considered similar to other respiratory infections such as influenzas; symptoms range from fever, cough, shortness of breath to more severe cases of pneumonia and organ failure

3© Oliver Wyman

OLIVER WYMAN’S CORONAVIRUS ALMANACThis Almanac contains the latest perspectives on key areas related to the COVID-19 pandemic

Section Key Topics Summary

01 Epidemiologic perspectivesPages: 4–13

• Epidemiological background• Up-to-date statistics by geography

• Coronavirus, declared a pandemic in March 2020, has infected millions globally• The virus displays unique and deadlier characteristics than other known diseases• The pace and maturity of infection is highly variable by region, largely hinging

on speed and strength of government response

02 First peak suppression and road to re-openingPages: 14–29

• Current state of suppression by geography

• Requirements for re-opening with detail on key capabilities

• Many countries have effectively suppressed the first peak through a range of measures, but re-opening and recovery is just beginning

• Health system capacity, testing, tracing, surveillance and social distancing are key tools on the road to re-opening

03 Re-opening approach and considerationsPages: 30-51

• Strategic framework for re-opening• Economic considerations• Global lessons learned• US opening approach and risk of

disruption• Employer implications

• Government policies, which must balance public health with restoring economic health, will shape the next phases of the pandemic

• As countries re-open, we are crystalizing best practices and assessing regions with greatest risk of further disruption

04 Oliver Wyman Pandemic NavigatorPages: 52-60

• Approach• Proof points of accuracy

• Oliver Wyman has developed a unique time-dependent SIR model to account for containment interventions

• The model produces more accurate projections due to dynamic and frequently-calibrated infection transmission and resolution rates

• Our navigator will evolve to capture emerging data around the virus and containment approaches, among other factors

05 Vaccines and TherapeuticsPages 61-67

• Therapeutics in development• Vaccine development timeline and

current state• Key considerations and unknowns

• Effective therapies and an eventual vaccine will be critical to bring economies and communities fully “back to normal” - further testing and drug development is to come, and timelines are long

• Constantly evolving understanding of the disease and limited understanding of the immune response to it propagates uncertainty around how and when the pandemic will resolve

06 Macroeconomic outlookPages: 68-78

• Most recent forecasts of US and global GDP and US unemployment

• Latest GDP forecasts predict a severe shock to the US economy, mirrored by unemployment levels

• Return to pre-COVID levels is anticipated early 2022

EPIDEMIOLOGIC PERSPECTIVES

01

5© Oliver Wyman

COVID-19 SPREAD GLOBALLY

80k

Information as of 5/21/20

As of May 21st, 2020• >5.0 MM cases reported

in 200 countries and territories• ~332 K reported deaths

First reported in Wuhan,China, on December 31, 2019

Declared a global pandemicby the World Heath Organizationon March 11, 2020

1. Countries included: All Countries in “European Region” Sub-region in WHO Situation ReportSource: Map from CDC (link), Numbers from John Hopkins University & Medicine (link)

6© Oliver Wyman

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Cumulative Confirmed Cases of COVID-19

New Cases Per Day of COVID-19

Rest of World

Updates toMeasurement

Definitions1

Source: John Hopkins University & Medicine Coronavirus Resource Centre1. Until February 17, the WHO situation reports included only laboratory confirmed cases causing a spike in total cases. Some sources include this update as of February 13. The jump due to inclusion of non lab confirmed cases is not included in the new cases data in WHO situation reports.; 2. Includes countries categorized under “European region” based off of latest WHO Situation Reports

COVID-19 TRENDS AND SPREAD OF THE DISEASECumulative confirmed cases continue to rise across the world, but new cases per day have begun to taper in key epicenters (China, Europe, US)

Updates toMeasurement

Definitions1

Large increase due to new cases

reported by Italy and Spain

Information as of 5/21/20

0

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Active cases per day of COVID-19

Updates toMeasurement

Definitions1

European Region2 US China Rest of World

Spike due to 25 K confirmed case count

increase in France between 4/3–4/4

7© Oliver Wyman

Average number of people infected by each sick person (R0)

0.1%

1%

10% Mor

e De

adly

More contagious1 15105

100%

HOW DOES COVID-19 COMPARE TO OTHER DISEASE OUTBREAKS? (1 OF 2)COVID-19 is currently more deadly and contagious than the Flu, but the science on transmission and mortality continues to evolve

Case Fatality Rate1

Log scaleAdditional details

• R-naught (R0) represents the number of cases an infected person will cause – Initial estimates suggested COVID-19 R0

is between 2 and 3 (with edge of range estimates closer to 1.4 and 3.6), which means each person infects 2–3 others3; R0 for the seasonal flu is around 1.34

– New emerging estimates suggest R0 may be closer to 5.7 (edge of range 3.8–8.9)6

• Early evidence suggests COVID-19’s transmission is highly variable, with most infections resulting in no subsequent infections and a few resulting in many, which should color response7

• The global case fatality rate for confirmed COVID-19 cases is currently 6.6%5 according to WHO’s reported statistics versus 0.1% for the seasonal flu; the rate varies significantly by country(e.g. Italy – 14.3%,South Korea – 2.4%5)

• We expect case fatality rates to fluctuate as testing expands identifying more cases and as existing cases are resolved

Bird Flu

Ebola

Smallpox

Measles

Chickenpox

MERS

SARS

H1N1 Swine Flu

Common cold

Denotes Coronaviruses

MERS2,494 infected | 858 deaths

1918 Spanish Flu~500 MM infected | ~50 MM deaths

SARS8,096 infected | 774 deaths

H1N1 Swine Flu700 MM–1.4 BN infected | 284 K deaths2

COVID-19~5.0MM infected | ~332 K deaths

Legend and key statistics

Information as of 5/21/20

1. New York Times (link) for fatality and R-naught comparisons, CDC timelines for case numbers (selected link: CDC SARS timeline); 2. Updated CDC estimates (link); 3. The R0 for the coronavirus was estimated by the WHO to be between 1.4–2.5 (end of January estimate) (link), other organizations have estimated an R0 ranging between 2–3 or higher (link); 4. CDC Paper (link); 5. Calculated as Number of Deaths/Total Confirmed Cases as reported by John Hopkins University. 6. Emerging Infectious Diseases (link) 7. Science (link)

Case Fatality Rate& Transmission Range

1918Spanish Flu

Seasonal Flu

8© Oliver Wyman

HOW DOES COVID-19 COMPARE TO OTHER DISEASE OUTBREAKS? (2 OF 2)The infectious cycle of COVID-19 is unlike that of any other outbreak we have seen before

Incubation timeline (days)1 Why does this matter?

The combination of a longer incubation period with asymptomatic transmission means that there is a longer window of time during which infected individuals are unaware that they are contagious

What do we still not know?• We still do not accurately understand the full infectious period for COVID-19

What we know about the infectious cycle? • Multiple sources confirm asymptomatic transmission, but the exact timing of when an exposed individual becomes

contagious is not known 3, 4, 5

• Initial reports suggest a latency period of 3 days (with substantial variability) prior to an individual becoming infectious7

• Viral loads build rapidly and continue to shed until 6–12 days after symptoms have cleared6

• New reports of patients testing positive after recovery raise more questions on potential length of infectious cycle8

• While the median incubation period is 5.5 days, symptoms have been documented to occur over a longer time frame; 14 days should capture 99% of all cases2

• Ideally, asymptomatic individuals should be tested during quarantine to ensure they have not been infected

Why is quarantine 14 days?

1. CDC 2. Annals of Internal Medicine (link) 3. JAMA (link) 4. NEJM (link) 5. Science (link) 6. medRxiv (link) 7. SARS-CoV2 by the numbers (link) 8. DownTo Earth (link)

630 1 742 5 8 9 10 11 12 1413

Flu

MeaslesA

H1N1Spanish Flu

SARS

COVID-19B

Notes:All but SARS have the potential for asymptomatic transmissionA. Symptoms most commonly appear on Days 10–14B. The median incubation period for COVID-19 is 5.5 days,

but symptoms can develop as late as 14 days post exposure

Illustrative

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CFR by country1 What is driving the variation?

0.79%

2.37%2.83%

3.50%

4.58% 4.73%

6.00%6.62%

11.99% 12.03%

14.25% 14.32%

15.51%

6.58%

3%

0%

1%

6%

4%

2%

5%

16%

7%

13%

8%

9%

10%

11%

12%

14%

15%

Norway GlobalChina excl.

Hubei

South Korea

Czechia Hubei, China

Germany Japan US Spain Sweden Italy UK France

Note that case fatality rates are still unstable as greater than 60% of cases outside of China are still active

Information as of 5/21/20

1. Calculated as Number of Deaths/Total Confirmed Cases as reported by Johns Hopkins University

CASE FATALITY RATE (CFR) BY COUNTRYWhile the global CFR is a useful metric to understand COVID-19, country-specific CFRs range by an order of magnitude

• Position along the trajectory of the outbreak: For many countries (e.g. Europe, US), the vast majority of cases have not yet resolved and the CFR is changing rapidly

• Breadth of testing: Broader testing leads to a larger confirmed base of patients, decreasing CFR

• Distribution of key risk factors within the population: Age, gender and pre-existing conditions have a significant influence on mortality (see next page); countries with higher CFRs have a population skewed towards these risk factors (e.g. Italy has the second oldest population on earth)

• Health system threshold: Every country has a health system capacity, that when exceeded, will result in the inability to provide sufficient support to all patients thereby resulting in a higher CFR

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Case fatality rate by ageAs % of confirmed cases1,2,3,4

Case fatality rate by ageAs % of confirmed cases5

Latest data available, varies by geography

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Italy Spain S. Korea Japan

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65-7475+ 45-64 18-44 0-17

NYC

CASE FATALITY RATE (CFR) BY AGEFor all geographies fatality rates increase significantly with age

1. Italy data as of 05/20/2020 (link) 2. S. Korea data as of 05/22/2020 (link) 3. Spain data as of 05/12/2020 (link) 4. Japan data as of 05/07/2020 (link) 5. NYC data as of 05/21/2020 (link)Notes: * South Korea does not provide data for ages 80+, same percentage has been listed for 80–89 and 90+ **Japan and Italy data includes a small proportion of cases without a specified age, these were not included

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CASE FATALITY RATE (CFR) BY COMORBIDITYSignificantly higher death rates occur among those with underlying conditions

Prevalence of comorbid condition in NY COVID-19 fatalities1

Comorbidity reports across the globe

• Initial data from China reported significantly elevated CFRs for patients with cardiovascular disease, diabetes, chronic respiratory disease, hypertension and cancer2

• Most common comorbidities identified in Italian COVID-19 fatalities were hypertension, diabetes, ischemic heart disease, renal failure, atrial fibrillation, COPD and cancer3

• A study in Spain identified cardiovascular disease and respiratory problems as the most common comorbidities in severely ill and fatal cases4

• Emerging data from the US and France suggest that obesity is an additional risk factor for severe disease resulting from COVID-195

Hyperlipidemia

Hypertension

Diabetes

Dementia

COPD

CAD

Renal Disease

Stroke

Atrial Fibrillation

54.8%

Cancer

36.0%

21.1%

7.3%

12.5%

11.8%

10.6%

8.9%

7.6%

6.7%

1. New York State Department of Health as of 05/07/2020 (link) 2. JAMA (link). 3. JAMA. (link) 4. El Pais (link) 5. Medscape (link)

89% of New York COVID-19 fatalities

involved at least one comorbidity

Information as of 5/7/20

12© Oliver Wyman

GROWING BODY OF EVIDENCE DEMONSTRATES THAT COVID-19 IS HAVING A MORE SIGNIFICANT IMPACT ON MINORITY AND DISADVANTAGED COMMUNITIES Evidence1

• African Americans were disproportionately impacted in the majority of US states reporting racial information:

• Some states also demonstrate disproportionate impact to Hispanic and Asian communities:

• Though data is limited, American Indian, Alaska Native (AIAN) and native Hawaii or other Pacific Islander (NHOPI) groups have also been impacted significantly. (Note: Navajo Nation now has the highest per capita infection rate in the country):

• The homeless and incarcerated have also been impacted significantly though there is limited quantified data available

Contributing factors

• Chronic conditions: Underlying medical conditions such as diabetes and heart disease create greater risk for infection, severe illness and death. These conditions are found in higher prevalence in African Americans, Hispanics and Native Americans in the US (e.g., 40% of African Americans have hypertension vs. 29% of total pop3)

• Socio-economic factors: Lower income communities are at greater risk of contracting COVID-19 due to close living conditions, increased need to go outside the home for food and work and greater reliance on public transportation (e.g., Data from the U.S. Bureau of Labor Statistics show that <20% of African American workers and ~16% of Hispanic ones are able to telecommute)

• Lack of information: In minority communities, information is often disseminated by members who are currently socially distanced (e.g., barbers, pastors) and evidence-based information on the disease and its impact on the community may be limited

• Racial bias in treatment: Review of lab billing information suggested African Americans with coronavirus symptoms were less likely to be tested4

Example Region % of Cases % of Deaths % Total Pop

Wisconsin 25% 39% 6%

Kansas 17% 33% 6%

Michigan 33% 40% 14%

Example Region % of Cases % of Deaths % Total Pop

WI (Hispanic) 12% 5% 7%

AL (Asian) 1% 4% 1%

Example Region % of Cases % of Deaths % Total Pop

Arizona 7% 21% 4%

New Mexico 37% -- 9%

1. KFF (link) 2. AARP (link) 3. CDC brief (link) 4. Kaiser Health News (link)

13© Oliver Wyman

AT A GLANCE: SUMMARY FACTSInformation as of 5/21/20

Key facts ImplicationsContagion • Initial estimates suggested COVID-19 R0 is between 2 and 3 (with edge of range

estimates closer to 1.4 and 3.6), which means each person infects 2–3 others3; R0 for the seasonal flu is around 1.34

• New emerging estimates suggest R0 may be closer to 5.7 (edge of range 3.8–8.9)14

• Early evidence suggests COVID-19’s transmission is highly variable, with most infections resulting in no subsequent infections and a few resulting in many, which should color response17

COVID-19 is at least twice as contagious as the seasonal flu

Current human immunity

• No herd immunity exists yet as the virus is novel in humans Social distancing (quarantines, WFH, school closures) is the only “brake” to slow spread

Incubation period • The incubation period is a median of 5.5 days (up to 14 days)1, 10, (vs 3-day period for common flu1); data suggests that viral shedding continues beyond symptom resolution6

People are contagious for longer periods than the flu or other illnesses, requiring longer bouts of quarantine to suppress spread

Fatality • Case fatality rates are trending at 6.6% globally8 (vs. 0.1% for flu)9

• Estimates for infected fatality rate are 0.3%–1.3% based on assumptions around the number of undiagnosed individuals13

Fatality is orders of magnitude higher than typical influenzas

Portion of cases asymptomatic but contagious

• COVID-19 can be spread asymptomatically5

• In retrospective studies of those people tested and confirmed positive for COVID-19, experts estimate 18–30% are asymptomatic, with another 10–20% with mild enough symptoms to not suspect COVID-1911

• Early indicators from point in time comprehensive testing of small populations (e.g. Vo, Italy; Iceland) suggest as many as 50% of cases could be asymptomatic12

• In cohorts of younger individuals (e.g. pregnant woman, sailors on USS Theodore) the proportion of asymptomatics exceeded 60%15, 16

People who feel “fine” are capable of –and are – transmitting COVID-19 to others

Portion of cases reaching “critical”/ “severe” infection

• Approximately 19% of confirmed cases are considered “severe” or “critical”, requiring hospitalization; 1/4th of those need ICU beds7

Hospital systems risk being overtaxed (ICU beds, ventilators, PPE) meaning case fatality rates could rise further

1. CDC. 3. The R0 for the coronavirus was estimated by the WHO to be between 1.4–2.5 (end of January estimate) (link), other organizations have estimated an R0 ranging between 2–3 or higher (link); 4. CDC Paper (link); 5. JAMA. “Presumed Asymptomatic Carrier Transmission of COVID-19” 6. MedRxIv. “Clinical presentation and virologic assessment of hospitalized cases of coronavirus disease 2019 in a travel-associated transmission cluster”. Mar 8. 2020. 7. China CDC, JAMA (link). 8. JHU. 9. CDC. 10. Annals of Internal Medicine (link) 11. Nature (link), Eurosurveillance Paper (link) 12. ZMEScience report (link) 13. SARS-CoV2 by the numbers (link) 14. Emerging Infectious Diseases (link) 15. Business Insider (link) 16. NEJM (link) 17. Science (link)

FIRST PEAK SUPPRESSION AND ROAD TO RE-OPENING

02

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HOW DO SUPPRESSION MEASURES LOWER THE BURDEN OF THE PANDEMIC?Leaving the disease unconstrained is not an option; aggressive suppression measures can ease the impact of the disease on health systems

Illustrative COVID-19 transmission with and without suppression measuresTiming and width of first peaks may vary between countries

Time (illustrative)

# of

case

s

Uncontrolled transmission1

Today TBD – pending success andseverity of suppression efforts

• Fewer total cases of COVID-19• Fewer total COVID-related deaths• Preservation of the healthcare system resulting in lower

COVID-related CFR and maintenance of mortality from unrelated conditions (e.g. heart attacks, strokes)

• Time for infected, isolated and quarantined healthcare workers to get better and back to work

• Time to improve testing and tracing capabilities, manufacture supplies (e.g. PPE, vents) and to understand the virus better

1. Assuming case-based isolation onlySource: Adapted from “How will country-based mitigation measures influence the course of the COVID-19 epidemic”. Lancet. Mar 6 2020. https://doi.org/10.1016/S0140-6736(20)30567-5. Concepts sourced from Tomas Puyeo

16© Oliver Wyman

Information as of 5/21/20

MOST COUNTRIES IN ASIA AND EUROPE ALONG WITH THE US HAVE MANAGED TO FLATTEN THE CURVE AND ARE NO LONGER SEEING EXPONENTIAL GROWTH

Cumulative confirmed cases by countryLog scale

Days since 100th confirmed COVID-19 caseSources: JCSSE (Johns Hopkins), local news and county health departments, as of 3/17. Pre-WHO China data from NHC) Containment sources: China, S. Korea, US and testing stats, Italy 100th case on: Italy: 2/23, S. Korea: 2/20, US: 3/3, China: before 1/18, UK: 3/5, France: 2/29, Germany: 3/1; Spain 3/2, Czechia: 3/13. Data from JHU 5/21/2020.

• Lack of broad testing early, followed by rapid ramp-up may explain part of steep growth rate

• Response left largely to individual states, the majority of which have implemented stay-at-home orders

• Many states have laid out plans for reopening; ~75% of states have reopened, while hardest hit areas are still on hold

• Extensive shutdown, first in Lombardy then nationwide imposed after outbreak had become unmanageable

• Relaxation of some restrictions has begun, as new cases reach a first peak and testing capacity expands

• Enforced city-wide quarantine of Wuhan post-outbreak

• Mobile monitoring/enforcement (via WeChat, etc.)

• Re-opening has begun, but with several new cases in Wuhan, China is launching a mass testing effort

• Massive early testing (as of 3/28, >6.5k tests per million vs. US estimated ~2k tests per million people)

• Quarantined patients monitored via mobile app• Epidemic response in place from SARS outbreak

30 40 600 705010 20 80 90 100 120110100

1,000

10,000

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10,000,000

China

France

Germany

Italy

Norway

South Korea

Spain

UK

US

CZE

Japan

Sweden

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1,000.0

10.0

100.0

0.1

1.0

1 57410 3 554 8 16 715 6 40187 9 221011 51494812

12k

13 27251415 17 7319 3420 6921 3523 5424 3026 2829 38313233 3637 39 42434445 534647 50 52 56

98k

2 5960616263646566676858 72 74

16k

35k28k

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70

STAY AT HOME ORDERS HAVE SLOWED THE GROWTH OF THE DISEASE ACROSS KEY MSA’S IN THE UNITED STATES

Confirmed cases by US metro areaLog scale

NYC

Stay home orders beginDays since 100th confirmed COVID-19 case

PHL, NOLA, CHI, DET

SF SEAHOU MIA BOSDFW,LA

Information as of 5/21/20

Data: USA Facts County Level Data as of 5/21/2020. Stay at home orders data from New York Times.

Metro area NYC PHL BOS MIA NOLA SF LA CHI SEA DET HOU DFWCase Fatality Rate 10.4% 8.2% 6.7% 4.3% 7.0% 3.1% 4.5% 4.5% 6.1% 11.7% 2.2% 2.6%

Boston (MSA)

New York City (5 Boroughs)

Philadelphia (5 Counties)

New Orleans (MSA)

Miami (MSA)

San Francisco (MSA)

Los Angeles (MSA)

Chicago (MSA)

Seattle (MSA)

Dallas (MSA)

Detroit (MSA)

Houston (MSA)

DFWHOU NOLAStay home orders end: BOS

18© Oliver Wyman

NOW THAT THE FIRST PEAK HAS BEEN SUPPRESSED IN MANY COUNTRIES, WHAT WILL IT TAKE TO REOPEN AND WHEN WILL WE GET THERE?

Oliver Wyman COVID-19 projections Active cases per million

0

500

1,000

1,500

2,000

2,500

3,000

1/22 2/22 3/22 4/22 5/22

ItalySpainUK

Germany

US

Capability1 Where are we?1: Health system capacityThe personnel, PPE, beds, and other equipment to sustainably manage normal healthcare needs and a potential new surge

Most countries and US states have sufficient capacity though a few hot spots remain at the margin

2: TestingSufficient rapid testing to screen essential workers, conduct random testing, effectively contract trace and ID new flareups

US as a whole and many European countries are making progress on building necessary capacity, some European and Asian Countries (Germany, Norway, S. Korea) and specific US States (CA) have adequate supply

3: Contact tracingIdentification, testing, and isolation of infected individuals’ contacts

Most countries lack adequate capacity; rapid staff up and creation of technological tools are beginning to fill the gap

4: Central surveillanceProcesses and infrastructure for aggregating an analyzing data to drive decision-making around suppression strategies

Asian countries have led the way, and existing surveillance systems are being adapted elsewhere but face data and lag time issues

5: Social distancingCultural and infrastructural changes to daily life and work

Businesses and individuals are just beginning to grasp the extent of the new normal

1. CDC has issued guidance on these topics that should be referenced by local authorities

19© Oliver Wyman

HEALTH SYSTEM CAPACITY IN THE USSome states are at the top of health system capacity while others have bed capacity but may lack personnel and PPE

Oliver Wyman COVID-19 projections (select US States)Active cases per million

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2/1 2/8 2/15 2/22 2/29 3/7 3/14 3/21 3/28 4/4 4/11 4/18 4/25 5/2 5/9 5/16 5/23 5/30 6/6

NY

MA

Health system capacity is a necessary but not sufficient indicator for reopening• As states begin to reopen it is critical for businesses

and governments to understand how strained local healthcare capacity is

• States other than NY have sufficient Med-Surg and ICU beds overall

• However other elements of capacity are the true rate limiters– Staff, particularly nurses

and respiratory therapists2

– PPE: A survey of clinicians in CA, FL, IL, TX, MA, PA, NJ, NY, and CT found that all but PA claims less than a week’s supply of N95 masks3

• Capacity is inconsistently distributed (e.g. 48% of hospitals have no privileged critical care physicians4)

FLCATX

1. Reflects capacity before emergency capacity expansions undertaken by many states. 2. Disaster Medicine and Public Health Preparedness (link). 3. GetusPPE (link) 4. Critical Care Medicine (link).

1 | Health system capacity

20© Oliver Wyman

0

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2,000

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3,000

1/22 1/29 2/5 2/12 2/19 2/26 3/4 3/11 3/18 3/25 4/1 4/8 4/15 4/22 4/29 5/6 5/13 5/20 5/27 6/3 6/10

Italy1

As it neared the peak, Lombardy was operating at >150% pre-pandemic capacity

Spain2

By the peak, Spain was operating at nearly double initial ICU capacity of 4.4 K beds

UK3

ICUs are close to capacity, prompting construction of “pop-up” NHS Nightingale hospital

Germany4

High ICU capacity and relatively low case counts have allowed Germany to accept patients from Spain and Italy

France5

Lack of testing capacity and initially uncounted nursing home cases have complicated capacity planning

HEALTH SYSTEM CAPACITY IN EUROPEThe situation in Europe, particularly ICUs varies widely by country and region, with particular areas in Italy and Spain facing more cases than total capacity and UK nearing capacity

Oliver Wyman COVID-19 projections (select European countries)Active cases per million

Spain

UK

1. Bulletin of the WHO (link). 2. El Pais (link). 3. Health Service Journal (link) 4. The Independent (link) 5. Connexion (link)

Italy

1 | Health system capacity

Germany

21© Oliver Wyman

TESTING IS A CRITICAL TOOL TO PINPOINT INFECTION AND UNDERSTAND SPREAD NOW AND AS WE RELAX SUPPRESSION MEASURESThree types of tests have been approved in the US with a recent wave of new options becoming available

1. Artis ventures (link) 2. FDA (link) 3. Fierce Biotech (link) 4. FDA (link) 5. FDA (link) 6. Fierce Biotech (link)

2 | Testing

Molecular Test (PCR / LAMP)Best for diagnosis to assess current infection

Protein Test (Antigen)Best for diagnosis to assess current infection

Antibody Test (Serology)Best for understanding past infection and potential immunity

LabSamples are collected and sent to a lab for processing

• As of 5/19, over 45 organizations have received FDA emergency authorization to conduct their PCR tests1

• On 5/20 Color received an EUA for a LAMP-based test which is both more rapid and requires different reagents than PCR-based tests6

• First EUA issued for antigen test produced by Quidel on 5/85

• EUA extends to lab and POC testing facilities

• FDA expects to issue an EUA template for antigen tests in anticipation of more tests coming to market soon

• As of 5/19, 12 tests have received FDA emergency authorization to conduct their rapid tests 1

• These tests can be conducted through ELISA, Lateral Flow or Chemiluminescence

Point of Care (POC)Samples are collected and processed at the testing location (test site, hospital, clinic, etc.)

• As of 5/19, FDA has approved 4 POC tests (Abbott, Atila, Cepheid, Mesa Biotech)1

• EUA issued for new CRISPR-based methodology developed by Sherlock (5/7)3

At homeSample collection at home, processing can vary between home and lab depending on test

• FDA issued an EUA for LabCorp’s home collection kit (4/21)2

• FDA issued an EUA for RUCDR Infinite Biologics at home saliva-based sample collection kit (5/8)4

• Note: Only sample collection is conducted at home for both of these approved tests

N/A

22© Oliver Wyman

HOW DO THE AVAILABLE METHODOLOGIES COMPARE?

1. AAFP (link) 2. Healthline (link) 3. UnitedHealth (link) 4. FierceBiotech (link) 5. Artis ventures (link) 6. WHO (link) 7. Kaiser Health News (link) 8. UCSF (link) 9. SHRM (link) 10. Covered CA (link) 11. CMS (link) and (link) 12. FDA (link) 13. MedTech Dive (link)

PCR Antigen Serology

Utility • Provide best current view of infection status at current point in time

• Support decision-making regarding needed isolation vs return to work, but only do so for current point in time

• Current CDC guidelines do not require a negative test post exposure or isolation to return to work/stop social isolation1

• Provide rapid current view of infection status at current point in time

• Once scaled, will support rapid-decision making at the POC, but may require confirmation (similar to other rapid diagnostics)

• Provide best comprehensive view of whether infection has occurred at a prior point in time

• May support differential deployment of staff based on status

• Given current gaps in understanding of the immune response to COVID-19 and details of conferred immunity, the WHO, CDC and AMA do not recommend use of serology tests outside of a research setting6

Accuracy • Currently considered the standard for COVID-19

• Tests are believed to be highly specific (i.e. positive test effectively guarantees infection)

• Initial estimates suggest that these tests can give false negative results as much as 30% of the time (to combat this, many countries in Asia require two consecutive negative tests 24 hours apart)2

• A study conducted by UnitedHealth Group suggests that self-collected tests are similarly effective to clinical collected ones3

• Accuracy of newly approved saliva-based test (vs typical nasal swab) appears similar4

• While antigen tests are considered to be highly specific, they are not as sensitive as PCR tests (Quidel reported 80% PPA with PCR test for their test13)

• Negative results may need to be confirmed by PCR tests

• As new serology tests enter the market, the accuracy of these tests has come under question7

• A recent comparative study compared the performance of 14 serology tests and identified significant variation in both specificity and sensitivity of these tests8

• The FDA issued new stringent guidelines (5/4) for serology tests; they must be at least 90% sensitive and 95% specific12

Turnaround time5 • POC turnaround times <1 hour, but still significantly greater than a typical rapid strep test (5 min)

• Lab-based tests have reported result times ranging from 1 hour to 2-3 days depending on lab location and level of back-up

• Reported test result time is 15 minutes • Reported result times are under 1 hour if done on site, 1-3 days if sent out to lab

Cost • Commercial testing costs are reported to range between ~$50–$1209,10

• CMS is reimbursing $35 for CDC tests (U0001) and $51 for non-CDC tests (U0002); reimbursement for testing using high throughput technology was raised to $100 on 4/2711

• Newly approved testing methodologies are expected to be cheaper once deployed at scale

2 | Testing

23© Oliver Wyman

MANY COUNTRIES AND US STATES HAVE EXPANDED TESTING CAPACITY BUT ADDITIONAL CAPACITY IS STILL REQUIRED TO FULLY REOPEN

Managing the Outbreak Beginning to Open Up Broader Relaxation

Where we need to be

Test all symptomatic patients and close contacts, rapid results

Test a high proportion of employees returning to work, intra-country travelers, and those performing/receiving medical procedures

Test a broad enough portion frequently enough to identify new outbreaks quickly enough to isolate without full suppression

Where we are • Identifying most new cases and rapidly testing their contacts (assuming ~20 contacts), would require ~400K tests/day

• US has maintained >300K tests a days since May 11 with single day numbers hitting 400K, suggesting testing capacity is reaching needed levels overall, e.g.with CA at 4.2% positive and IL at 10.5%2

• UK has rapidly increased testing capacity recently, allowing it to better manage the outbreak

• Italy’s capacity has only increased somewhat, increasing risk as lockdowns are released

• Czech Republic, Norway, Germany, have maintained low enough daily new cases to avoid overwhelming test capacity

• US employs ~30M in retail, education, entertainment, transport and other priority non-WFH industries: at current testing rate, that would require >100 days to test all assuming all testing capacity was devoted to it

• In reality, capacity is still required to manage new outbreaks, and to ensure safety as elective medical procedures are restarting, so testing non-WFH workers would require even longer

• Around 2M tests per day in the US, and an analogous level in other countries would facilitate a conservatively safe reopening3

• Some disagree, including the LabCorp CEO, saying current capacity is adequate4

• Opinions vary on the level of testing necessary for broader relaxation, from low end estimates of <200K/day a to high end estimates of 20M/day5

• Most estimates cluster around broader ~2% of the population daily, translating to a capacity of 5M in the US

• It is unclear if most countries could reasonably reach this level of testing, and many lack the political conviction to do so. It is likely that most countries will reopen without this level of capacity

Tests per thousand people (Data as of 5/21/20)1

5241 38 37 35 29

152

Germany South KoreaItaly Norway Czech Republic UKUS JapanTests/

Confirmed case 14 27 19 8 43 8 70 16

1. Our World in Data (link) – testing units vary by country as different types of data are reported; 2. JHU coronavirus resource center (link) 3. Edmon J Safra Center for Ethics: Harvard U (link) 4. CNBC (link) 5. KFF (link)

2 | Testing

24© Oliver Wyman

EFFECTIVE CONTACT TRACING ALLOWS TARGETED ISOLATION TO AVOID THE NECESSITY FOR BROAD SUPPRESSIONGeneral approachPair manual and tech-based approaches with population awareness campaigns

• Expand the public health workforce and leverage existing or newly captured health and movement data to trace contacts of infected individuals

• Mix of manual (individuals IDing and reaching out to contacts) and technological (proximity tracking, cell-phone tracking, credit-card tracking, etc.)

• Scaled abilities to enforce and support quarantine (e.g. food delivery, isolation support, community-based treatment for quarantined individuals)

• S. Korea demonstrated that mass messaging is critical as the outbreak grows1

– Encouraging those with potential exposure to get tested

– Targeted broadcast of the movement of infected individuals to alert those who were exposed

What does it take to be successful?Massive scale of public health workforce and technological support as possible

• Depending on time required to isolate contacts and success in isolating infected individual, models suggest a 70-85% success rate is necessary to control spread if R0 is ~22, with higher R0s requiring higher success rates1

• Rapid tracing requires a massive workforce

– JHU has suggested adding at least 100K individuals to act as contact tracers as a “start” in order to trace every new positive test3

– Using European CDC manpower estimates, >200K individuals may be required in the US based on current new case projections

• Requires leadership at the local level (state and municipality) with the cooperation of leaders in government, business, education and faith, organizations (extends manpower and improves pubic cooperation)

• Speed and manpower deficits can be addressed with digital tools, i.e. Bluetooth enabled apps that track proximity positive tests, but this would require high buy in: 60% utilization at least3 (South Dakota’s recently released Care19 app has 2% uptake as of 5/19)Sources: 1. Lancet (link); 2. Science Magazine (link); 3. Edmon J Safra Center for Ethics: Harvard U (link)

3 | Contact Tracing

25© Oliver Wyman

THE US AND EUROPE BOTH FACE CHALLENGES IN BUILDING NECESSARY CONTACT-TRACING CAPABILITIES

Sources: 1. NBC (link) 2. StatNews (link) 3. USA Today (link) 4.WBUR (link) 5. Sacramento Bee (link) 6. The Guardian (link); 7. NPR (link) 8. CDC (link) 9. State of WA Dept of Health (link)

3 | Contact Tracing

Workforce • With only ~650 Federally employed contact tracers, US states are largely acting independently to build contact tracing capabilities– Latest relief bill contains $75B for a national system, but President Trump has indicated he will veto it in its current

form due to provisions expanding early and mail-in voting1

– Census Bureau will reportedly repurpose 25K workers to aid in contact tracing2 though little has been announced on this since mid April

• A total of 66K workers are planned across all states, with 11K staffed, however states are at different levels of readiness with some staffed up, some in the process, some with concrete plans, and some with vague suggestions or no plans :3

– MA has hired 1.4K workers in partnership with Partners in Health non-profit, with an additional 400 volunteers from the local Blue Cross Blue Shield and community health centers4

– CA planning to hire 20K contact tracers but is currently only at 33005

– WA has hired and trained 1.2K workers1

– NY State partnering with Johns Hopkins and Mike Bloomberg to train 17K contact tracers3, while NYC alone plans to have 5K tracers, 1K by June 16

– TX has begun to reopen with <50% of the contact tracers it has estimated it needs– OH has begun to reopen and suggests it needs 2K tracers but has hired none1

– ID and VA have stated publicly that local health departments will be responsible for contact tracing and have no estimate of statewide capacity7

Technology and Processes

• Initial wave contact tracing was not effective in the US or Europe– A CDC report on California’s initial attempt to contact trace incoming travelers only demonstrated that it was

overwhelmed and abandoned by mid-March8

– Anecdotal reports suggest Germany’s manual contact tracing efforts were overwhelmed early as well• A proximity tracking tool has been released by Apple-Google but uptake levels are TBD

Population Orientation

• Both American and European publics are suspicious of invasions of autonomy or privacy• Especially in the US, specific rumors and anti-tracing propaganda have created confusion, necessitating a public

statement by at least one state (WA) to attempt to ease fears9

26© Oliver Wyman

CONTACT TRACING: WILL TECHNOLOGY SAVE US?There are a few ways technology can supplement the otherwise highly manual contact tracing process but none are a silver bullet

Is anyone doing this? How it could save us Why it’s complicated

Proximity Tracing: Uses Bluetooth and specialize apps to identify individuals who have been in close proximity for a prolonged period with an individual who is later diagnosed

• In place in Singapore, and planned for Europe and US through a jointly developed Apple-Google tool with which state/ country apps can be built

• Short cuts the laborious process required to ID contacts

• IDs contacts that would not be revealed in an interview (e.g. stranger on a nearby park bench)

• Can maintain a high degree of privacy if it uses the DP-3T protocol as Apple/Google plan

• Requires very high uptake (>60%) to be effective– unlikely

• Privacy concerns are likely to continue (“We’re using the DP-3T protocol!” is unlikely to be widely persuasive)

Tech Facilitation of Manual Processes: Make the existing process more rapid and effective with workflow software

• Several state governments and private companies are working with existing tech vendors such as Salesforce

• Anything that reduces the person-hours and increases the accuracy of contact tracing will increase capacity and make reopening less risky

• Does not fundamentally change the time-consuming process

• Privacy concerns are likely to persist

Surveillance infrastructure integration: Harvest data from CCTV, cell-data, badge-swipes, payments, etc. to track contact between infected and non-infected individuals

• South Korea led the way in combining myriad data to effectively trace cases

• Private orgs such as universities are considering version of this

• Has the potential to provide a comprehensive view of individuals’ movements without requiring proactive uptake

• Massive privacy concerns—questionable that this would be tenable in most Western countries

• Complex from a technological perspective

3 | Contact Tracing

27© Oliver Wyman

FEAR OF LIABILITY AND UNCERTAINTY SURROUNDING GOVERNMENT ACTION HAS SPURRED THE PRIVATE SECTOR TO EXPLORE CONTACT TRACING

• The US Government has indicated that employee COVID tests and related symptom checks are allowable as employers decide who may return to work1

• Some companies are considering developing further COVID management capabilities:– To care for employees and customers– To minimize risk/liability of employees or customers

becoming infected– To improve consumer confidence

• 25% of CFOs say they will employ contact tracing capabilities with their employees2

• Companies are looking to repurpose customer relationship management software and other tools that allow tracking of meetings and contacts, but most are early in the process

Private deployment of contact tracing capabilities Employee and customer reactions

• Data privacy is a perennial concern, but there are indications that individuals will be open to contact tracing

• A recent Oliver Wyman survey found that >60% of individuals would be willing to share personal health data if it would aid in controlling the pandemic

• Some political differences notwithstanding, 66% individuals are willing to have some activity tracked via phone for contact tracing purposes if it will hasten the reopening of schools and businesses3

• However, individuals tend to prefer public health agencies rather than private companies to control this information: nearly 2x as many people are willing to share info with the CDC and public health officials vs. major tech companies.4

1. UE Equal Opportunity Employment Commission (link). 2. PwC (link) 3. KFF (link). 4. Axios (link)

3 | Contact Tracing

Private activity may be a valuable supplement to public contract tracing capacity

There may be some initial skepticism around private contact tracing, but if it reopens business sooner, the public will likely get on board

28© Oliver Wyman

AN EFFECTIVE SURVEILLANCE SYSTEM IS CRITICAL TO DETECTING NEW OUTBREAKS EARLY ENOUGH TO MANAGE WITHOUT WHOLESALE SUPPRESSION

What do we need?

Data

• Enough COVID-specific testing is taking place to provide a reliable view of COVID prevalence

• Availability of additional clinical and other data that can indirectly ID COVID prevalence (e.g. disproportionately high hospitalization rates for older individuals with pneumonia, travel from hot spots)

When can we get there?

• Testing capacity is likely to remain below requirements for the US and many European countries at least for another month

• Additional clinical data may help fill gaps in testing but these data are difficult to aggregate effectively in the US and are unlikely to be a short term aid

• European countries with more centralized healthcare/financing systems may be able to leverage additional data, as some Asian countries did in combining immigration with health information

• The US’s National Syndromic Surveillance System has been deployed for COVID tracking, and covers the majority of hospitals in the US, but using it as an early warning system for outbreak resurgence requires broader data gathering and a reduced lag time

• CDC’s Redfield acknowledged the current system is “archaic” in a 5/13 Senate hearing

• State/multi-regional initiatives are underway but timing is unclear

Central Aggregation

• Infrastructure and processes to rapidly aggregate data at a geographic level that:– Is empowered to make COVID management decisions

accounting for any delay in data reporting and aggregation– Is large enough to cover the extent of COVID outbreaks

(i.e. beyond one state when there is significant interstate commuting)

• As experience with of COVID is gained during the first wave, modeling the second wave will become easier

Analytics

• Analysis that identifies when COVID outbreaks threaten to escape control and guides decisionmakers

4 | Surveillance

29© Oliver Wyman

TO AVOID THE USE OF BLUNT SHUTDOWNS, COUNTRIES USE SURVEILLANCE SYSTEMS AND THE CAPACITY TO TRACE MOST INFECTED INDIVIDUALS’ CONTACTS

Case study: China1

• The Alipay Health Code: – Program originated in Hangzhou,

China; as of 2/24 90% of the province’s population had downloaded the app and 100 Chinese cities were using it

– Uses big data to determine if an individual is a contagion risk or not

– Individuals are assigned a green, yellow, or red color code that indicates health status

– QR code on phone is required for entry into many common areas, public transportation, health checkpoints, etc.

– App shares personal data including location with the police

Case study: South Korea2

• Tracking: – Retrace physical steps of anyone

who tested positive– Used credit card records, GPS data

and security-camera footage• Mass messaging:

– Emergency cell phone alerts any time there is a confirmed case in individual’s district

– Apps and websites list detailed timelines of infected individuals’ travel

– Anyone having potentially crossed paths with individual urged to go to testing center

• Quarantine enforcement:– Quarantined individuals required

to have cell phone apps that alert officials if they venture out with fines for violations

Case study: Apple & Google3

• Apple and Google have developed that uses Bluetooth to detect when people come into contact with someone who has tested positive for COVID-19 (rolled out 05/20)4

• The software will be incorporated into apps made by public health authorities

• Apple and Google will push the software to people’s phones automatically

• To protect anonymity, people will be notified whether they came into contact with someone who has COVID-19 “sometime later”, not in real-time

• The technology does not collect any GPS location data and instead relies on Bluetooth to keep track of smartphones that have been near each other

• Apple and Google have emphasized that people will have to opt-in to share their COVID-19 statusSources: 1. NY Times (link) 2. NY Times (link) 3. CNN (link) 4. Fierce Healthcare (link)

Most invasive Least invasive

4 | Surveillance

03RE-OPENING APPROACH AND CONSIDERATIONS

31© Oliver Wyman

WE CANNOT AFFORD TO REMAIN SHUT DOWN, BUT IT’S NOT WITHOUT RISK TO RE-OPEN FULLY. WE EXPECT >12 MORE MONTHS OF SOCIAL DISTANCING “CYCLES”

Initial Outbreak Long Haul of Suppression

Miti

gatio

n/Ec

onom

y • Closure of non-essential businesses

• Community-wide stay-at-home mandates

• Widespread remote work • Border closures and travel

restrictions

• Gradually re-open business with employee testing, social distancingin the workplace and new cleaning protocols

• Remote work and mask-wearing still the norm• No large gatherings• Quarantine for confirmed cases, close associates, and travelers• Stay-at-home order for elderly, ill, and/or immunosuppressed

• All businesses re-open with safety protocols

• Stay-at-home reinstated in areas with new outbreaks

• Prevalent use of vaccines, perhaps annually

Containment

~2 Months 12+ Months

Case

gro

wth

per

day

Therapeutic breakthroughs (treatment, vaccine) and/or scaled public health tools (testing, tracing, selective quarantine, surveillance)enable exit to New Normal

Cycles of relax/tighten as social distancing remains the only “brake”

Ramp up testing to watch for resurgence of virus and gauge progress to herd immunity1

32© Oliver Wyman

Controlled outbreak

Scenario 04

Minimally invasive measures (e.g. mask wearing, contact tracing) can be successful

Scenario 01

Moderate, on and off again partial social distancing

measures can be successful

Scenario 02

Full, blunt “lockdowns” are needed to be successful

Scenario 03

Virus resurges Maintain course and monitor

Are economic consequences acceptable?

No, approach proves too difficult to operationalize or doesn’t work

well enough

SOCIETIES AROUND THE WORLD ARE LOOKING TO CONTAIN THE PUBLIC HEALTH DISASTER WHILE MINIMIZING IMPACT ON THE ECONOMY UNTIL A VACCINE EMERGES

Stylized decision tree for public policy actions to contain the epidemic

No, moderate measures prove

ineffective

Yes

Yes

No

Yes

Yes

No

We are continuously monitoring global government responses and results across the world, incorporating them into our COVID-19 Pandemic Navigator, and creating sophisticated “what-if” scenarios

Success in each scenario defined as keeping projected active cases below

hospital system capacity

Decision criteria will be impacted by political factors, virus

characteristics, and breakthroughs in therapeutics/vaccines

yet unknown

33© Oliver Wyman

01 02 03 04Minimally invasive measures Moderate social distancing Blunt lockdowns Controlled outbreak

• We sacrifice privacy and some freedoms, but suppress the virus

• Regional borders remain controlled/closed to avoid contagion

• We have few slower-growth outbreaks over the next 18+ months

• When case counts reach a critical threshold against hospital capacities, stricter lockdowns imposed

• We will periodically be in ‘today’s world’ over the next 18+ months

• Fiscal and monetary stimulus measures expand significantly to account for future outbreaks

• The virus spreads quickly through the general population

• Potential for future outbreaks depends significantly on the immunity of those previously infected

Targets for no future outbreaks occur, and we are able to maintain a reasonable level of economic activity

Economic impacts are significant but lower than that with minimally invasive measures

Impact on most affected sectors of the economy will be deep and long-lasting

Immediate impact on economy is severe, but the pandemic is relatively short-lived

Lockdown

Outbreak

SMART SCENARIOS FOR THE FUTURE COURSE OF THE EPIDEMIC CAN BE DEVELOPED AT COUNTRY AND STATE LEVELS AND USED TO PROJECT CONSEQUENCES OF POLICY AND BUSINESS CHOICES

34© Oliver Wyman

$862 $746 $685$989

$445 $311 $287

$640

$756$532 $488

$721 $240 $352

Heal

thca

re

$1,492

$2,832

$1,660

$1,278

FIRE

1

Prof

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$1,250$1,720

Man

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tion

Who

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$81

$264

$685

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$457

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$1,173

$1,618

$74

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ultu

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$1,120

$4,492

$2,742

$2,360

$887$663

$335 $320 $236 $169$376

Small businesses

Large businesses

1. FIRE includes Finance, Insurance, real estate, and rental Source: US Bureau of economic analysis; US small business administration

United States GDP by industry, 2019$ BN

SCENARIOS SHOULD ACCOUNT FOR RELATIVE “BANG FOR THE BUCK” ECONOMICALLY…

Very disrupted: Business is nonexistent or severely disrupted

Somewhat: Most can at least continue a large portion of their business

Less: Nearly all can continue the much of their business

How disrupted by suppression measures

Healthcare sector has been massively impacted by the replacement of high margin elective care with lower margin COVID care

35© Oliver Wyman

(1.4) (1.3) (8.2) (2.2) (2.2) (0.3) (0.9) (0.4) (0.6) (0.9) (0.3) (1.3) (0.1)

… AS WELL AS GETTING PEOPLE BACK TO WORK

4.9

8.2

5.5

10.0

6.9

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1.8

Man

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4.5

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7.2

Small businesses

Large businesses

Job Changes in MMs, April 2020 jobs report, seasonally adjusted 2-month net change

Healthcare sector has been massively impacted by the replacement of high margin elective care with lower margin COVID care

United States employment by industry, 2018Full Time Employee equivalents, MM

1. FIRE includes Finance, Insurance, real estate, and rental Sources: 1. US Bureau of economic analysis; 2. US small business administration

Very disrupted: Business is nonexistent or severely disrupted

Somewhat: Most can at least continue a large portion of their business

Less: Nearly all can continue the much of their business

How disrupted by suppression measures

36© Oliver Wyman

$3,103 $3,097

$2,767

$2,252

$1,390

$1,082$979 $946 $930

$529 $519$373 $343

Other services,

incl. professional

services

Human health

Manufactu-ring

Trade Transport & storage

Finance & real estate

Construction Info. & comms

Education Utilities Tourism2 Agriculture Mining

1. Countries included: Albania, Andorra, Armenia, Austria, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Kosovo, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova, Monaco, Montenegro, Netherlands, Macedonia, Norway, Poland, Portugal, Romania, San Marino, Serbia, Slovakia, Slovenia, Spain, Svalbard, Sweden, Switzerland, Ukraine, UK, Vatican; 2. Tourism includes hospitality and food and beverage sectorsSource: Fitch Solutions – FitchConnect

European1 GDP by industry, 2018$ BN Very disrupted: Business is nonexistent

or severely disrupted

Somewhat: Most can at least continue a large portion of their business

Less: Nearly all can continue the much of their business

How disrupted by suppression measures

BANG FOR THE BUCK MAY DIFFER BY GEO AS ECONOMIC DRIVERS DIFFER – EUROPE HAS A HIGH FOCUS ON KNOWLEDGE INDUSTRIES BUT ALSO IN MANUFACTURINGEurope

37© Oliver Wyman

MANUFACTURING REPRESENTS A MUCH BIGGER PORTION OF THE ECONOMY IN ASIAAsia/Middle East

$7,646

$5,469

$4,315

$3,327

$2,098 $1,949$1,418

$929 $854 $798 $759 $630 $596

TradeManufacturing Tourism1Other services,

incl. professional

services

ConstructionAgricultureFinance & real estate

Transport & storage

Info. & comms

Education Human health

Mining Utilities

1. Countries included: Afghanistan, Azerbaijan, Bangladesh, Bhutan, Brunei, Cambodia, China, Georgia, Hong Kong, India, Indonesia, Israel, Japan, Kazakhstan, Kyrgyzstan, Laos, Lebanon, Macau, Malaysia, Maldives, Mongolia, Myanmar, Nepal, North Korea, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Tajikistan, Thailand, Turkey, Turkmenistan, Uzbekistan, Vietnam West Bank and Gaza; 2. Tourism includes hospitality and food and beverage sectorsSource: Fitch Solutions – FitchConnect

Asian/Middle Eastern GDP by industry, 2018$ BN Very disrupted: Business is nonexistent

or severely disrupted

Somewhat: Most can at least continue a large portion of their business

Less: Nearly all can continue the much of their business

How disrupted by suppression measures

38© Oliver Wyman

MONITORING FOR BEST PRACTICES ON REOPENING AND ASSESSING RISK OFFURTHER DISRUPTIONCountries across the globe are searching for pragmatic ways to balance public health with economic health

• As leaders of many geographies come to grips with the fact that they can not afford to keep their economies shuttered until the virus dies off, we are now witnessing a multi-faceted public health experiment globally, and across the U.S.

• We anticipate inevitable resurgence of the virus in many places as regions end containment measures to restart their economies

• Leaders may manage the staging and pacing of re-opening differently, but with the consistent objective of driving consumer and employee confidence while avoiding a resurgence of cases and deaths that would require further shutdown measures and economic disruption

• Regions are already differing in their re-opening strategies – based in part on their initial experiences with the first peak, local needs, population and cultural dynamics, and available infrastructure

39© Oliver Wyman

0

100

200

300

400

500

600

700

0

1000

2000

3000

4000

5000

6000

7000

8000

1/22 2/5 2/19 3/4 3/18 4/1 4/15 4/29 5/13

Daily new cases (7 day average) Estimated active cases

SOUTH KOREA HAS MAINTAINED CONTROL THROUGH IDENTIFICATION OF OUTBREAK CLUSTERS AND TARGETED SUPPRESSION MEASURES FOCUSED ON THOSE OUTBREAKS

Source: NYT, Korea Herald, Reuters, Reuters, NPR, Brookings, ABC News, The Guardian

Timeline of key actions Observations & Lessons LearnedRapidly deployed contact tracing and testing improves response capabilities across the board• South Korea approved its first test by February 4th, and was testing 10,000

people a day by March• Testing was fast, free, and widely available to the populace, in part due to

innovations such as drive-through testing centers• Widespread contact tracing allowed both the government and the public to

be informed of infection risks and potential carriers.

Digital contact tracing capabilities are helpful, but efficacy and ease of implementation are country-dependent• Contract tracing was substantially enhanced with credit card data, phone

location logs, and surveillance camera footage • This scale of data collection was possible due to pre-existing digital

infrastructure and the extremely connected nature of S Korean public (95% of adults own smartphones)

These capabilities enable targeted suppression measures• South Korea’s flexible response model involved levying suppression

measures for specific geographies and/or businesses based on identification of outbreaks (e.g., recent ban on bars and clubs in Seoul)

• The government had enough information to proactively quarantine risky individuals, avoiding more disruptive, widespread measures

Public compliance is key• The Korean public is more collectivist than many European countries, leading

to more acceptance of digital surveillance • Korea also had a high level of public involvement in contact tracing, both

from citizens proactively monitoring if they were in infection-risk areas, as well as private industry and citizens developing contact tracing capabilities

• Familiarity with MERS (in 2015) lead to widespread public compliance with PPE and social distancing guidelines, lessening the need for mandatory suppression actions

Estim

ated

act

ive

case

s

Daily

new

cas

es (7

day

ave

rage

)1 2 3

45 6

1

2

3

4

5

6

Date Active Cases Notes

Jan 20 1 First case noted in a Chinese tourist

Feb 18 15 “Patient 31” super-spreader drives accelerated outbreak growth in Daegu

Feb 24 806Daegu bans large public gatherings and closes churches and religious services as well as public museums, libraries, and schools

Mar 10 6,53699% of members tested from Daegu Shincheonjireligious sect, subject to super-spreader event via Patient 31

May 1 145 Patient tests positive after visiting at least five clubs/bars in Seoul

May 6 116 Federal govt. eases social distancing guidance

May 9 146 Seoul suspends operations for all clubs and bars7

7

40© Oliver Wyman

GERMANY’S APPROACH LEVERAGES A ROBUST HEALTH SYSTEM AND EFFECTIVE COLLABORATION BETWEEN THE FEDERAL GOVERNMENT AND LOCAL AUTHORITIES Timeline of key actions Observations & Lessons Learned

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Date Active Cases Notes

Jan 27 1 First confirmed case discovered in Munich

Feb 16 6First regional closures begin in North Rhine-Westphalia (libraries, municipal buildings, schools)

Mar 20 19,178 First regional lockdown begins in Bavaria

Mar 22 23,833National bans on gatherings of >2 people and non-essential businesses; regions are allowed to impose stricter measures

Apr 20 43,691 Low traffic businesses and retail shops <800 sqm allowed to reopen nationally

May 6 18,716

Reopening roadmap released; States are given autonomy to determine future reopening plans, but with “emergency brake” restrictions to be applied if state passes daily case threshold

Strong federal leadership with local autonomy allows for flexible response• Various local leaders (at the city or state level) were given autonomy to levy

stricter measures on residents than the federal government mandated, allowing for more stringent responses in hard hit areas

• Reopening guidance is primarily up to local leaders, allowing various states to adjust their reopening plans based on key industries and population dynamics

• However, the federal government has established a mandatory baseline for social distancing requirements, limiting risk from reopened businesses

• Additionally, Germany has stipulated that additional restrictions will be reimposed if any region sees acute infections reach 50/100k

Robust public healthcare system limits negative impact• Germany had a high rate of ICU and hospital beds per capita, reducing strain

on system and enabling them to accept overflow patients from neighboring countries

• Additionally, they built up a stockpile of test kits by the time the outbreak began in earnest in February

• Widespread testing (~350,000 per week by April) allowed for rapid detection of cases, enabling early, impactful treatment that lowered death rate

• Adequate supply of tests for medical professionals limited spread and reduced strain on workforce

• However, manual contact tracers were quickly overwhelmed at the beginning of the pandemic, necessitating stringent, country-wide lockdowns

Trust in public leaders encourages social distancing compliance• Public is generally deferential to expert advice and followed social distancing

guidance during the severe lockdowns in March and April• Decentralized nature of response allows for local authorities to provide

transparent, relevant updates, leading to a high degree of trust and popular support

41© Oliver Wyman

SWEDEN’S LESS STRINGENT APPROACH IS BALANCED BY FAVORABLE POPULATION DYNAMICS, BUT OUTCOMES HAVE BEEN WORSE THAN IN STRICTER NEIGHBORSTimeline of key actions Observations & Lessons Learned

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Date Active Cases Notes

Jan 31 1 First confirmed case in traveler from Wuhan

Mar 11 498 Ban on public gatherings >500 people

Mar 16 1,088Public Health Agency publishes set of social distancing guidelines, recommending limited travel and work from home

Mar 17 1,169

Public Health Agency recommends secondary schools and universities shift to distance learning (not primary/kindergarten); evidence suggests recommendations have been followed

Mar 27 2,255 Public gathering limit lowered to 50 people

Apr 18 7,379

Legislation passes allowing Swedish government to pass pandemic-related measures without prior parliament approval; legislation becomes obsolete June 30, has not been utilized yet

Adequate social distancing compliance and public cooperation may lessen the impact of the pandemic, but these are not a silver bullet• Daily mobility has decreased by ~20% among Swedes since mid-March, but

Norway and Finland saw larger decreases during their stringent lockdowns • Sweden has maintained adequate health system capacity thus far, but this

required the doubling of ICU beds from pre-pandemic levels and emergency resupply of medication and PPE in March

• However, absolute confirmed cases (~32k), cases per capita (~.003), case fatality rates (~12%), and excess mortality (+27%) are all well above Sweden’s Scandinavian neighbors across all age groups

This strategy likely requires high public trust in authority and favorable population dynamics…• Independent agencies staffed by experts (including the Public Health Agency)

are an important part of the Swedish government model and included in the constitution, allowing for expert advice to drive policy with less friction than other nations

• Trust in both the Swedish government and the Public Health Agency are very high, with the PHA enjoying public trust above any of the Swedish political parties

• Sweden also has several population dynamics that limit the risk from COVID, including an extremely high (57%) rate of single-person households, very low population density, and an overall healthy population

…and proper care for vulnerable populations remains vital to managing fatality rates• Nearly half of all deaths in Sweden have occurred in nursing (care) homes• Inadequate testing of residents and employees at care homes has

exacerbated the crisis• Existing guidelines have increased the difficulty of administering aid to elderly

patients, including avoiding the transport of fragile or elderly patients to the hospital and limiting the ability of workers to administer oxygen

42© Oliver Wyman

SINGAPORE SAW EARLY SUCCESS DRIVEN BY INDIVIDUAL TRACING AND QUARANTINE, BUT FAILED TO ACCOUNT FOR NON-PERMANENT RESIDENTSTimeline of key actions Observations & Lessons Learned

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Source: Singapore Government, Bloomberg, Channel News Asia, CNET, CFR, Nature, Time, CNN, CNN

Date Active Cases Notes

Jan 23 1 First confirmed case, tourist from Wuhan

Mar 16 135 Case growth accelerates due to repatriation of residents – 70% of new cases are imported

Mar 23 359 Borders closed to tourists and short term visitors

Apr 5 854By early April, most new cases are temporary migrant workers; Govt. quarantines 20,000 workers in response

Apr 7 923Government announces “circuit breaker” measures, including closures of schools and most non-essential businesses

Apr 21 7,644 Circuit breaker extended through June, additional businesses subject to closure

Jun 2 TBA Phased reopening to begin

Extremely strict testing, tracing, and quarantine protocols may effectively manage outbreaks…• Post-SARS, Singapore expanded isolation capacity and testing infrastructure for

future pandemics, enabling them to quickly scale up a COVID response• Singapore had extremely strong quarantine measures: isolation of

infected/suspected individuals and close contacts was strictly enforced• These measures allowed the public at large to enjoy relatively few restrictions

on daily life

…as long as the testing and quarantine is truly comprehensive • Cases spread undetected at cramped migrant worker dormitories; Migrant

workers are a “cognitive blind spot” for the Singaporean government, as pre-pandemic policy segregated workers to the outskirts of society

• Initially, stringent quarantining approach was not applied within this group

Digital contact tracing alone is not enough to adequately identify outbreaks• Despite international praise for Singapore’s voluntary TraceTogether app, only

~20% of the public has downloaded it• Government officials warn against an overreliance on digital tools, maintaining

that manual tracing and outreach should be the cornerstone of policy

Governments should be prepared to adapt to changing information and circumstances• Singapore’s “rational and incremental” approach to suppression allowed the

country to respond to changing circumstances (e.g., closing borders as imported cases rose), but delays may have caused increased transmission (e.g., initial hesitancy to impose lockdown)

• Singapore is addressing migrant worker cases with parallel but differentiated measures, including widespread quarantine and free, accessible healthcareOf on-going interest: Singapore’s CFR is 0.07%; as the bulk of active cases resolve it will be critical to track the evolving CFR and understand the drivers underpinning it

43© Oliver Wyman

AS US STATES RE-OPEN, WE ARE MONITORING A BROAD ARRAY OF DATA POINTS TO PREDICT REGIONS AT HIGHEST RISK OF ADDITIONAL DISRUPTION

• How hard has the region been hit?

• Where is the region on its first outbreak curve (emerging, stabilizing, recovering)?

• How well have hospitals been able to manage the first surge?

• How broadly and how quickly are businesses being allowed to re-open?

• How stringent are PPE and social distancing requirements?

• Is there sufficient testing capacity to detect patients early?

• Is there sufficient contact tracing capability to identify potential infections early?

• What increased capacity is being planned?

• How are mobility and social distancing indicators changing?

• How is transmission rate increasing?

• Using OW’s boots-on-the-ground Global Sensing Network, how are individuals and businesses behaving and complying?

• Is the region higher-risk due to age, population density, comorbid conditions, socioeconomic factors?

• Is there a cultural bias toward social distancing, or multi-gen households?

Contact tracingSurveillance

Testing % positiveTests per day

Reopening timing, policy, stringency, seq.

PPE/distancing mandateTravel restrictions

Mobility indices (Apple, Google, etc.)

PPE complianceOW transmission rateAnecdotal compliance

New cases trajectoryCase fatality rateCases per capita

Impact on hospitals, PPE, vents, workforce

Age, density, % urbanChronic conditions% essential, % WFH

Household size, x-genTravel exposure

1 2 3 4 5Initial peak experience

Reopeningpolicy

Public health infrastructure

Leadingindicators

Populationdynamics

44© Oliver Wyman

A STATE’S EXPERIENCE WITH THE INITIAL OUTBREAK AND SUBSEQUENT POSTURE TOWARDS RE-OPENING POINT TO RISK OF FURTHER DISRUPTION

Is the state past its first peak

of cases?

Has the state reopened2?

Was testing adequate at reopening?

1. We considered “significantly impacted” to be 500+ cases per 100K. 2.We defined “reopened” as having opened non-essential indoor settings requiring close person-to-person contact (e.g., retail, salons, dine-in restaurants); a state is not considered “reopened” if it has reopened only outdoor settings, construction, manufacturing, and non-customer-facing offices.

1Yes

2No

YesNo

Has the state reopened?

Yes

No

4No

5Yes

Hard hit, through the worst of it, giving recovery more time and scaling up testing; tend to be dense population areas with earlier outbreaks

Less affected states waiting for growth to peak and cool off

Highest risk of disruptionOpened before peak, with less testing in place

Moderate risk of disruptionOpened after peak with strong testing, but less cautious policy

Moderate risk of disruptionOpened before peak, but with adequate testing in place

3Yes

Has the statebeen significantly

impacted1 byCOVID-19?

Surviving and recovering

Preparing for recovery

Eager Reopening

Spared and reopened

Managing the surge

Picture is quickly evolving; states are expected to move between archetypes as circumstances change

45© Oliver Wyman

1 2 4 53

WE BELIEVE SOME ARCHETYPES CARRY A HIGHER RISK OF FURTHER DISRUPTION AS WE EMERGE FROM THE FIRST PEAK

Surviving and recovering

Preparing for recovery

Managing the surge Eager Reopening Spared

and reopened

• Dense urban populations severely affected, leading to highest case fatality and cases per capita

• Most have not yet reopened indoor businesses despite declining new cases

• All require face masks in public, and reopening plans are staged and regional

• Major cities remain at risk despite cautious approach to reopening

• Most have not yet reopened indoor businesses, or have reopened very narrowly as they hope to see cases decline

• Preparing for testing and tracing by boosting capabilities

• Reopening policies vary: some reopened broadly, while others are taking regional and/or staged approaches

• New cases continue and oscillate unpredictably, posing the potential to outpace testing

• Most states reopened as new cases were rising – but have since managed to stabilize and decline new cases (except SD)

• Reopening policies vary: some reopened broadly, while others are taking regional and/or staged approaches

• Insufficient testing may be obscuring true case growth

• Least affected by the pandemic to-date

• Most reopened statewide, but those with denser cities are taking a regional approach

• Testing was strong, but is starting to decline, and mobility is rising

• Most have relatively vulnerable populations, and demonstrated less distancing during the first outbreak – leaving them less prepared for one in the future

Picture is quickly evolving; we are tracking state movement between archetypes as circumstances change

46© Oliver Wyman

Database: Rapid export and visualization of 50+ metrics across several market dimensions

OUR COVID-19 PANDEMIC DATABASE, ARCHETYPE FRAMEWORK AND DETAILEDSTATE PROFILES PROVIDE AN UP-TO-DATE VIEW OF EVOLVING RISKOW’s pandemic database compiles key Covid-19 information at a country, state, MSA, and county level

State Archetypes: OW continuously updates archetype view to identify areas with greatest risk‒ Current pandemic status‒ Reopening policy‒ Public health infrastructure‒ Leading indicators‒ Population dynamics

State profiles: Detailed profiles double click on key issues facing states and MSAs

Profiles available upon request

47© Oliver Wyman

PENNSYLVANIAPA is at moderate to high risk due to low testing and tracing, declining social distancing, and relatively high population density in Eastern PA; its cautious reopening policy may allow time to improve its ability to contain future transmission

STATUS: Most of PA is now in first phase of reopening, but Eastern PA still trails on meeting reopening criteria

RISK OF DISRUPTION: MODERATE - HIGH

Current pandemic

status

Hard hit, but now recovering• New cases decreasing (-22% weekly)• Relatively high case fatality rate of 7.4% (US

median: 4.4%), and total cases (67K, or 520/100K vs. US median: 267/100K)

• 4.8K deaths, more than half in nursing homes

Reopening approach

Most counties reopened, Eastern PA still closed• Regional approach to lifting stay at home orders

and reopening - rural counties opened first• By 5/22, most of the state will reopen; Eastern

PA (including PA5) will remain closed

Public health infrastructure

Testing and tracing improving but still below benchmarks • 11% positivity rate and decreasing with 7K daily

tests (much better than on 4/20: 27% positive with ~5K daily tests, HGHI recommends 15K daily)

• PA is among several states reporting antibody and viral tests together

• Plans to increase contact tracing, but details are sparse and current levels are well below targets

Leading indicators

Rising mobility and declining social distancing • Social encounters have increased ~40% in the

two weeks leading up to 5/19, mobility has increased ~20% in two weeks leading up to 5/13

Population dynamics

High population density (PA: 284/mi2, PA5: 1K+ vs. US: 108) and moderate health risk

Updated 5/21 – Additional states available upon request

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PA 5 (Philadelphia, Chester, Delaware, Bucks, Montgomery Counties)

Philadelphia MSA (includes parts of NJ, DE, MD)

Pittsburgh MSA

4/1: Stay home for all counties

7-day Moving Average, New Cases per 1M

3/23: Stay at home for PA5 5/8: Reopen

24 counties 5/15: 13 counties reopen

48© Oliver Wyman

OHIOOhio is at moderate risk of disruption despite a decline in new cases and a low % positive testing rate. Quick reopening and below target overall testing and tracing capabilities pose a risk for future disruption

STATUS: The vast majority of businesses have reopened in May, with social distancing guidelines

RISK OF DISRUPTION: MODERATE

Current pandemic

status

Severe cluster outbreaks in April, now under control• New cases are declining (-14% weekly) • Prisons of Marion and Pickaway county became

national hot spots in April, now few new cases • High case fatality rate of 6.0% (US median: 4.4% with

29K total cases (251/100K v. US median: 267/100K)

Reopening approach

Relatively quick, statewide reopening of businesses • More than 90% of Ohio businesses have reopened in

May with social distancing limitations, including retail, food and drink, and personal care

• Schools, museums, theaters and large gatherings remain closed

Public health infrastructure

Low % pos. with ambitious testing and tracing plans • 6% positivity rate and decreasing with 9K daily tests

(Gov. set goal of 22K/day by end of May, HGHIrecommends 14K/day)

• Ohio has at least 700 tracers with plans to hire ~1,100 (15 / 100K, guidelines suggest 30 / 100K is target)

Leading indicators

Rising mobility and declining social distancing • Social encounters have increased ~40% in the two

weeks leading up to 5/19, mobility has increased ~25% in the weeks leading up to 5/13

Population dynamics

High population density, but average population risk factors• High pop. density (282/mi2 vs. US median: 108/mi2)• Relatively average share of adults at higher risk of

serious illness from Covid (39% v. US median: 38%)

Updated 5/21 – Additional states available upon request

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Cluster outbreak in Marion and Pickaway

Prisons

7-day Moving Average, New Cases per 1M

3/22: Stay at home order

5/21: Most businesses open including retail, food, and drink

5/4: Begin reopening

throughout May

Shoulder driven by growth in Franklin

County (below)

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4/29 5/6 5/13 5/20Columbus MSAFranklin County (Includes City of Columbus)Aggregate of Marion, Pickaway, Franklin, and Morrow Counties (2nd Axis)

49© Oliver Wyman

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Michigan Detroit MSA Grand Rapids MSA

MICHIGANMichigan is at moderate risk of disruption despite a sustained decrease in new cases throughout May and strong testing results. With floodwaters surging, MI is facing two emergencies at once, complicating both responses.

STATUS: Significant progress made in May; cautious reopening with more planned for coming weeks

RISK OF DISRUPTION: MODERATE

Current pandemic

status

Progress in May, but new cases increasing in Grand Rapids• No change in new cases over last week, decrease in cases

(-9% 7 MA) over last two weeks• Case fatality rate has been high (9.5% vs. US median:

4.1%), and infection has been broad with 53K total cases (530/100K, US median: 267/100K)

Reopening approach

Cautious, regional approach to reopening• Curbside retail, construction and manufacturing open;

Offices, bars, and restaurants open in some counties• Gatherings of <10 people now allowed statewide• Further reopening of retail, auto, and non-essential

healthcare services will occur in the coming week• Stay at home order is set to expire on 5/28

Public health infrastructure

MI has quickly bolstered testing and tracing capacity• <4% positivity rate and decreasing with 17K daily tests • Recruited over 2,200 contact tracers with plans to hire

3,400 for 35/100K (guidelines suggests 30/100K)

Leading indicators

Restless pop. less likely to comply with restrictions• Social encounters increased 43% in the two weeks leading

up to 5/19 and mobility increased 25% in the weeks leading up to 5/13

Population dynamics

High risk population, Central MI dealing with flooding• High pop. density (177/mi2 vs. US median: 108/mi2)• Above average obesity and diabetes rates• On 5/19, floodwaters surged through central Michigan

after two dams broke. 10K+ people were evacuated from Midland, many brought to shelters, complicating the coronavirus response

3/24: Stay at home order

5/7: Reopen construction,

real estate, outdoor work

5/21: Gathering

of <10 allowed

Updated 5/21 – Additional states available upon request

7-day Moving Average, New Cases per 1M

While MI overall and Detroit MSA have

stabilized, Grand Rapids is an area to watch

50© Oliver Wyman~2 Months 12+ Months

Case

Gro

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Day

EXECUTIVES WILL OPERATE IN THE FACE OF A PERVASIVE RISK OF DISRUPTION AS ECONOMICS REOPEN

Seemingly “random” regional

shutdowns

20%+ absenteeism,

with some employees severely ill

Significant mental health and wellbeing challenges for

employees

Unequal economic

impact across sectors

1 2 3 4

HALLMARKS OF THE ROAD AHEAD

Current Peak Long Haul of SuppressionSystematic, scaled, and sophisticated tools to enable near real-time

monitoring of the disease become well-established

Initial period of volatility when reopening begins, before testing and monitoring

mechanisms are perfected

Changed customer behaviors (perhaps

permanently)

5

51© Oliver Wyman

ILLUSTRATIVE PLAYBOOK COMPONENTS ON WORKFORCE RESILIENCE AND READINESSNon-exhaustive

Functionalredesigns

• Workflow redesign to reduce hand-offs, complexity, and intensity of rare skills

• Automation of critical processes and processes with higher personnel risks

• Infrastructure and IT configured for enablement of full program portfolio

• No sharing of equipment when possible

Alternativestaffing models

• Formal separation of a-teams and b-teams to ensure backup availability

• “Flex pool” or “pool of pools” to plug live gaps

• Reallocation of workforce across sites to mitigate undue risk in one location

• All who can work-from-home do so• Cross-training of all critical skill sets• …

Physical work space safety• Increased ventilation• Floor layout redesigns and foot

traffic guidance to reduce congestion and maintain 6 ft distance

• Comprehensive disinfection practices at appropriate intervals (particularly of high touch surfaces and restrooms)

• Bans on 10+ person meetings• New behaviors, e.g. masks/gloves at all

times in public spaces, frequent hand washing, toilet closure)

• Cafeteria/social space closure• …

Proactive monitoring and intervention

• Elevation of centralized risk monitoring function

• Real-time tracking and evaluation of all key risks

• SWAT teams for rapid intervention• Contingency plans for

opening/closing/relocating operations based on evolving local risk

• Alerts and compliance monitoring• …

Scalableemployee support

• Expanded communications, e.g. educational campaign on social responsibility

• Managing workforce concerns about returning to work

• Transportation burden assistance (e.g. to avoid subway use)

• Mental wellbeing coaching resources• Productivity training for remote

collaboration• Policy & technology provision for

extended work-from-home for large portions of workforce

• Child care assistance • …

Management of special people situations

• Formal identification of higher risk employees (demographics, health status, rare skills)

• Alternative work rotations and extended WFH for populations at higher health risk

• Enhanced HR admin capacity for special employee circumstances (e.g. Sick days, PTO, furlough, alternative work arrangements)

• …

Healthscreening/testing

• Temperature checks or assessments at entry

• Testing (on site or protocol for referral to local public health entity/physician)

• Policies related to health screening/testing (e.g. management of medical data and privacy, payment for testing and time required for testing, reporting of results, policy for use of results in deployment of staff)

• Education of management about disease and control measures

Legal and labor agreements• Managing responsibilities to labor

unions with regards to lay offs, reduced work hours, testing, etc.

• Appropriate compliance with wage and hour laws, anti-discrimination laws, health and safety laws, the Americans with Disabilities Act, various new (and old) paid sick and family leave rules, etc.

• Preparation for any potential claims filed by employees as a result of measures undertaken during crisis period

• …

OLIVER WYMAN PANDEMIC NAVIGATOR: SCENARIO MODELING

04

53© Oliver Wyman

OW COVID-19NAVIGATOR

Decision support toolsControl tower

Covid strategy operational delivery

Granular challenge to macroeconomic views

Epidemiology and Govt health response (by country)

Macro overlay and recovery• Industry capacity and earnings by

sector• Fiscal/Monetary Stimulus

Financial system• Loss-bearing capacity, funding

etc• Risk/Loss Transmission• Banking/Insurance/Funds/PE

Lockdown Patterns • Timing and frequency• Severity (sophisticated vs blunt)

SCENARIOS BUSINESS USE CASES• Back to work planning• Footprint decisions• Cashflow expectations• etc

• Workforce availability• Customer behaviours• Liquidity management• etc

• Models• Processes• Capacity

BUSINESS DECISIONS MUST REST ON A SOLID SET OF SCENARIOSOliver Wyman has developed a fully integrated “analytical stack” which connects COVID scenarios through to economic and business impacts

SCENARIOS

54© Oliver Wyman

WE HAVE THE ABILITY TO ESTIMATE BOTH REPORTED AND UNDETECTED CASES –EXAMPLE OUTPUT

Example outputs for New YorkSimilar outputs are available for all U.S. States

Note: Peak appears as unknown if there are insufficient cases in that county to accurately project a peak at the county-level

55© Oliver Wyman

OUR MODELS HAVE BEEN GENERATING STABLE AND ACCURATE RESULTS. WE TRACK STATISTICAL TESTS EVERY DAY - RESULTS FOR NEW YORK STATE 4/10/2020

Forecasted trajectories for Confirmed Cases from yesterday (T0) and earlier projections from the previous 7 days

Forecasted trajectories for New Cases

Out-sample test results comparing Actuals 4/9/2020 with historically calibrated versions from the past

Forecast trajectories for Active Cases (confirmed-death-recovered)

Past predictions have been highly accurate

Forward projections of new cases fall exhibit high stability

Active cases are core driver of hospitalization rate and ICU needs

Ultimate confirmed cases fall within a stable range of estimates.

56© Oliver Wyman

Google Mobility Indices reveal what has changed in movement activity; Oliver Wyman COVID-19 transmission rate measure confirms that social distancing worked in reducing spread of COVID-19 in confirmed/detected cases

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Transit Stations -- Mobility Index Change vis-à-vis BaselineOW Covid-19 Transmission Rate Based on Reported Universe (5-Day Average -- RHS)

Mobility Index% change compared to baseline

Oliver Wyman Covid-19 Transmission Rate Based on Reported Universe

5-day average

Grey line shows index data from Google showing drop in mobility through transit stations in Italy following lockdown measures

Red line shows Oliver Wyman model for COVID transmission intensity. Our model links policy choices and impact on interaction intensity to understand choices in certainty of containment vs economic impact

Example: Italy

OUR MODEL IS PHYSICS-INFORMED, DATA-DRIVEN YET CAUSALLY CONFIRMED (1/2)We have linked out transmission rate model to independent, observable metrics for human interaction

57© Oliver Wyman

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Beta values Stringency index

Example: Italy

OUR MODEL IS PHYSICS-INFORMED, DATA-DRIVEN YET CAUSALLY CONFIRMED (2/2)For example, the transmission rate model has been linked to the Oxford University Government Response Stringency Index

58© Oliver Wyman

WHEN WILL ECONOMIC ACTIVITY RESUME WHEN WE LIFT RESTRICTIONS?People are staying at home even where lockdowns are not in place -- Sweden

Consumers will not resume normal economic activity for some time

Would you feel comfortable going out to a restaurant or being in other settings with crowds such as theatres, stadiums, subways?

If your state were to “re-open”, would you feel safe going to your workplace?

Yes 21% No 79% Yes 30% No 70%

Source: Oliver Wyman Weekly Consumer COVID Survey

59© Oliver Wyman

OUR SCENARIO GENERATION AND ANALYIS CAPABILITY COVERS A NUMBER OF POTENTIAL SCENARIOSExample: Scenarios on the timing of re-opening the economy

U.S. – Active Cases

U.S. – New Cases• Open Too Fast/Too Soon: Widespread

lifting of restrictions in early May, leading to a rapid rise in transmission rates (all else equal); as active case counts are still high at this point (roughly 400K nationally) this leads to a spike in new and active cases, potentially prompting the reinstatement of lockdowns

• Open Timely: Gradual lifting of restrictions starting in late May, starting with States that are less vulnerable; majority of active cases have resolved, allowing the outbreak to be effectively managed within a target range (roughly 100K active) through the end of the summer

• Open Too Late: Blunt restrictions maintained through the beginning of June in an effort to “squash the bug”, leading to a substantial decrease in active cases; restrictions are lifted slowly as active cases stabilize around 50K

0

10,000

20,000

30,000

40,000

50,000

Mar-20 Mar-20 Apr-20 Apr-20 May-20 May-20 Jun-20 Jun-20 Jul-20

Open #1: Too Fast / Too Soon Open #2: Timely Open #3: Too Slow / Too Late Actual

0100,000200,000300,000400,000500,000600,000700,000800,000

Mar-20 Mar-20 Apr-20 Apr-20 May-20 May-20 Jun-20 Jun-20 Jul-20

Open #1: Too Fast / Too Soon Open #2: Timely Open #3: Too Slow / Too Late Actual

60© Oliver Wyman

WE HAVE PUBLISHED A WHITE PAPER TO ALLOW FOR PEER REVIEW

Note: White paper accessible on our public Pandemic Navigator website: https://pandemicnavigator.oliverwyman.com/

AN END TO THE CYCLE:VACCINE AND THERAPEUTICS

05

62© Oliver Wyman

THREE CATEGORIES OF THERAPEUTICS COULD SPEED UP ERADICATION OR AT LEAST LESSEN THE BURDEN OF SEVERE DISEASE AND MORTALITY

Sources: Adapted from Business Insider (link), Journal of Chinese Medicine Association (link), Archives of Emergency Medicine (link), Healthline (link)1. JAMA (link) 2. PNAS (link) 3. NEJM (link)) 4. Medscape (link) 5. Tech Crunch (link) 6. Science Alert (link) 7. NIH (link) 8. Lancet (link) 9. DailyMail (link)

Product type Description Examples Current state

Antivirals and products with antiviral effects

• Products either directly target the virus or prevent it from targeting/entering cells

• Many of these products have already been proven safe as a result of clinical trials for efficacy against other diseases

• These products generally work best when given early in the course of the disease

• Remdesivir (Ebola)• Chloroquine/

Hydroxychloroquine (Malaria)

• Kaletra (HIV)• Favipiravir (Influenza)• Avigan (Influenza)• Lopinavir (HIV)• Galidesivir

• Multiple on-going clinical trials with existing products and combinations of products

• Early results with Remdesivir suggest positive response, more data is forthcoming and FDA issued an EUA for its use in patients with severe disease (5/1)3,7

• FDA granted EUA for Chloroquine and Hydroxychloroquine (3/31) based on initial positive results, but subsequently issued a warning about their use (4/24) due to heart risks and new reports citing limited impact5,6 and toxicity4

• A new study reported positive results with a combination of interferon beta-1b, lopinavir-ritonavir, and ribavirin8

Passive immunization

• Products help the immune system fight the virus

• This type of product is common in treating cancer, rheumatoid arthritis and Ebola

• These would be the first generation of therapeutics specific to COVID-19

• Convalescent plasma (from recovered patients)

• Plasma-derived products• Monoclonal antibodies

(e.g. Leronlimab, Tocilizumab)

• Natural Killer cells (e.g. CYNK-001)

• Initially positive reports on use of convalescent plasma (China)1,2

and multiple on-going trials at more than 40 institutions in the US coordinated by Mayo clinic

• Early clinical trials for many new and existing monoclonal antibodies as well as CYNK-001

• Takeda and partners have formed the COVID-19 Plasma alliance to work on a plasma-derived product (unnamed); clinical trials set to start in summer

• Sorrento recently identified a potentially promising antibody that blocks viral entry in a lab-based setting9

Symptom and complication relief

• A broad category of products that lessen the effect of the disease or the complications resulting from it (e.g. severe inflammatory response in the lungs)

• Actemra, Kevzara• Sylvant• Blood purification

• Phase III clinical trials with Actemra and Kevzara testing drugs’ potential in reducing severe inflammation from COVID-19 infection (Kevzara trial scaled back on 4/27)

• Clinical trial with Sylvant testing ability to reduce need for ventilation and shorten ICU length of stay

• FDA granted EUA for blood purification devices (4/10)

63© Oliver Wyman

WHAT COULD REMDESIVIR DO FOR US AND WHY EVEN IF IT WORKS, IT WON’T BE A MAGIC BULLET

If Remdesivir proves safe and effective, what might we gain?Initial data suggests some positive effect on the most severely ill patients

• Reduction in mortality: If the drug is effective in improving the outcomes for severely ill patients, mortality numbers will decrease and with them, the overall level of threat of COVID-19

• Lower pressure on ICU capacity: If the drug is able to speed the recovery time for the severely ill, ICU capacity will stretch to cover more patients than currently estimated as patients will clear the ICU faster

• Reduced need for scarce resources: If the drug is able to prevent progression of the disease to the most severe cases, the need for limited resources (e.g. ventilators) will be reduced

Why Remdesivir is not(and will not be) a magic bullet• Remdesivir is administered intravenously, in a hospital setting

with no current plans of converting the product into a pill, which means that:– The product cannot be used prophylactically

to prevent infection– It likely won’t be able to be given early in the course

of the disease (when it would likely be most effective) without dramatically increased testing and scaled delivery capacity

– It will require a trained workforce for delivery, further straining the shortage of medical staff and PPE

• Current Remdesivir stocks are limited– Remdesivir was not manufactured by Gilead, but rather

contract manufacturers– Gilead is beginning to ramp up manufacturing by partnering

with generic drug makers1, but it is too early to tell how soon broad enough supplies might be available

– HHS has stepped in to help allocate the available doses within the US via individual state health departments2

Adapted from Chemical &Engineering News (link)1. Fierce Pharma (link) 2. Fierce Healthcare (link)

64© Oliver Wyman

How long could that take?

• In short, 18+ months is likely for development, trials, approval and mass production

• The best comparison we have is the development of H1N1 vaccines under similar circumstances:

What is the current status?

• Several vaccine types are being considered for COVID-19: 1) traditional protein-based (longer development, manufacturing timeframe but proven approach), 2) mRNA-based (quick to design but less proven technology and efficacy, 3) DNA-based (quick to design but less proven technology)

• Several manufacturers are suggesting they could receive US’ in fall 2020 if trials are successful

Sources: H1N1 timeline (link), Credit Suisse Equity Research, Nature (link), Artis Ventures (link) and Biocentury (link)1. Fierce Biotech (link) 2. WSJ (link)

Vaccine clinical trials begin

July 2009

FDA approves four H1N1 vaccines

Sep 2009 Aug 2010

WHO declares end of pandemic

Summer 2009

Source region possibly under control

Mar 2009

First world-wide case emerges

Apr 2009

US Gov declares state of emergency

H1N11

6 months until vaccine approval; 12 months critical conditions; 18 months until end of pandemicDec 2009

Vaccine available broadly

HOW AND WHEN WILL WE RECOVER COMPLETELY? A successful vaccine manufactured and deployed at scale is the only certain path to eradication

• The number of confirmed vaccine programs is rising rapidly, as of 4/28 60+ are in pre-clinical stages and 12 are in clinical stages

• Key front runners:– Moderna – first patient was dosed on 3/16/20; results are expected late spring or summer;

Moderna received FDA fast-track tag (5/12)1 and reported early positive results (5/18)2

– CanSino Biologicals – first patient also dosed on 3/16/20; company announced intent to move into Phase II trials soon based on preliminary Phase I data; preliminary data due in May

– Inovio Pharmaceuticals – first patient dosed on 4/6/2020, preliminary data due at the end of June– University of Oxford/Vaccitech – first patient dosed on 4/23/2020; preliminary data due in summer– Pfizer/BioNTech – first US patient dosed on 5/4/2020 with smaller German trials started in April

65© Oliver Wyman

LIMITED UNDERSTANDING OF THE IMMUNE RESPONSE TO COVID-19 CREATESADDITIONAL UNCERTAINTY BEYOND TYPICAL HURDLES OF VACCINE DEVELOPMENT

Key questions1. Are individuals who have recovered from COVID-19 immune?

– While the initial assumption was “yes”, mixed early evidence suggested a lot more data is needed; more recent studies are pointing in a positive direction

– Positive tests after clearance1: S. Korea, China and Japan have all reported cases who tested positive after being cleared – could be due to reinfection, viral reactivation or testing errors. Recent studies suggest those individuals did not pass on infection to anyone else, supporting the hypothesis that the findings are driven by testing anomalies7

– Varying levels of neutralizing antibodies2: A study examining presence of neutralizing antibodies in recovered COVID-19 patients identified significant variation in levels of produced antibody with 6% of patients producing no detectable antibody

– High frequency of seroconversion6: A new study showed that nearly all individuals (out of a pool of ~1300 patients in NYC) who tested positive for COVID-19 became seropositive

– Protection against reinfection in macaques: A pair of recent studies showed that macaques were protected from infection both by a candidate vaccine and prior infection8

2. If immunity is conferred, how long will it last?– Best estimates are based on other coronaviruses and range from months up to 3 years3

– Survivors of SARS outbreak had antibodies that lasted up to 3 years– Survivors of MERS had antibodies that lasted just under a year

3. Is the virus stable enough for a single vaccine?– Thus far, mutations have been minor, making it unlikely that a more flu-like strategy will be required– Mutations thus far identified in COVID-19 have not been significant enough to cause concern among vaccine scientists4

– The virus has been accumulating an average of 1–2 mutations per month vs 2–4x that rate for the flu5

– There are structural differences between the genome of the flu and SARS-CoV-2, which make it easier for flu to mutate5

1. DownTo Earth (link) 2. Medrxiv (link) 3. Time (link) 4. HealthLine (link) 5. Business Insider (link) 6. Medrvix (link) 7. WSJ (link) 8. Science (link) and (link)

66© Oliver Wyman

PRODUCTION OF AN APPROVED VACCINE AT SCALE AND ENSURING EQUITABLE GLOBAL DISTRIBUTION REPRESENT ANOTHER SET OF HURDLES

1. Vaccine volume required is staggering– Vaccination will be required globally, given current spread of COVID-19 across the globe– 60–85% of the population will need to be immune (either through vaccination or through acquired immunity post infection) given

an R0 of 2–5.7– Assuming two doses per patient, vaccinating 60% of just the adult population is ~6.5 billion doses (this is equivalent to the WHO’s

estimates of annual global pandemic flu vaccine production capacity)

2. Production of current vaccines must remain uninterrupted– Annual flu vaccine production currently requires total vaccine capacity for ~ 6 months each year

3. Which processes, components and facilities will be needed at scale is an unknown– Vaccines under development span a broad array of types (e.g. RNA, DNA, inactivated virus, surface protein) and each carries different

requirements for scaled manufacturing– Some, like Moderna’s RNA vaccine require simpler processes, but will rely on entirely new infrastructure since no RNA vaccines

are currently approved– Others, may leverage existing infrastructure (e.g. inactivated vaccine particle) but may have much more complex processes

4. Production of vaccine is not sufficient, it must also be distributed and administered equitably– Vaccine production is centered in the US, China and Western Europe– People living in low and middle income countries account for 79% of the world population– Achieving vaccination in these populations requires prevention of hoarding by wealthier countries producing the vaccines, adequate

supplies (e.g. syringes, needles) and people to administer the vaccines as well as ability to maintain appropriate conditions (e.g. cold chain) while delivering vaccine to all areas

Source: Adapted from Nature (link) and Vaccine (link)

67© Oliver Wyman

Proportion required for herd immunity1 Proportion required for herd immunity1

Infected proportion of population, by country Infected proportion of US population, by MSA

30%

70%

40%

10%

0%

20%

60%

80%

90%

Spai

n

Fran

ceUS

Sout

h Ko

rea

Italy

Germ

any

Nor

way UK

Japa

n

Chin

a

Swed

en

Czec

hia

Estimated total – high2Estimated total – low2Confirmed

70%

30%

0%

10%

80%

20%

60%

40%

90%

New

Orle

ans

Detr

oit

San

Fran

cisc

o

Seat

tle

Chic

ago

Bost

on

NYC

3

Sources: Total confirmed cases by country as reported by Johns Hopkins University as of 5/21/2020; total confirmed cases by US county as reported by US facts as of 5/21/2020; world population as reported by link; total population for MSAs as reported by Claritas.1. Estimates for herd immunity for COVID based on R0 of 2–5.7 and a target of R0<1 (link) and (link) 2. Estimated total infected based on Oliver Wyman Pandemic Navigator Model 3. NYC includes 5 boroughs only, not full MSA 4. Oliver Wyman Pandemic Database4

Information as of 5/21/20

WHAT ABOUT HERD IMMUNITY – CAN THAT HELP?Herd immunity is a long way off, even in heavily affected epicenters like NYC

CN JP SK CZ NO DE US IT ES UK FR SEDeaths per 1M4 3 6 5 29 43 98 280 540 600 530 430 380Total Deaths4 5K 800 260 300 230 8K 94K 32K 28K 36K 28K 4K

San Fran Seattle Chicago Detroit NOLA Boston NYCDeaths per 1M4 50 190 460 950 1,000 910 1,840Total Deaths4 250 740 4K 4K 1K 4K 20K

MACROECONOMIC OUTLOOK

06

69© Oliver Wyman

U.S. Real GDP Growth Forecasts – Q1, Q2, Q3, Q4, and annualAnnualized growth rate, by select economic analysts (9) 1,2

Key observations from estimates

• Forecast updates have been frequent and sizable – Consensus is that bad news on the virus continues to outweigh good news on policy actions

• Forecasted Q2 qoq annualized growth rate in the US (~30–40% drop) will be the worst since we have quarterly data available

• Key indicators to track include:– Trend for percent of U.S.

population infected (scenarios ranging up to 80%)3

– Reliance on “smart” mitigation strategies (e.g., mass testing, use of analytics)

Apr 20 – 30May 1 – 15 GDP Actual Nowcast

Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 (annual)

Median -3.9% -38.9% 21.9% 12.0% -6.3%

Average -5.2% -37.3% 17.2% 12.8% -6.2%

Max/Min -2.3%/-9.9% -30.0%/-41.4% 29.0%/-1.0% 25.0%/5.7% -5.6%/-7.1%

Actuals -4.8%

Q2 Mid-March consensus

Q2 202030

Q1 2020

-50

-30

-40

20

-20

-10

0

2020 (annual)

10

JP Morgan

DB

TD

DB

Moody’s

Goldman CBO

JP Morgan

Nowcast (May 15)

DB

Annu

aliz

ed g

row

th ra

te (%

)

JP Morgan

CBO

CBO

GoldmanMorgan Stanley

TD

UBSCBO

Morgan StanleyTD

UBS

B of A

Morgan Stanley

TDDB

B of A

Goldman

CBO

DB

GDP Q1 Actual Nowcast (May 1)Goldman

Goldman

Last updated: 5/18/2020

LATEST GDP FORECASTS INDICATE A SEVERE SHOCK IN THE U.S. ECONOMYThe escalation of the Covid-19 crisis has lead to significant downward revisions in GDP forecasts globally

1. Sources: Bank of America (May 8), Moody’s (Apr 28), UBS (Apr 29), Goldman Sachs (May 12), Morgan Stanley (May 15). TD (Apr 20), JP Morgan (May 8), BEA (Apr 29), CBO (Apr 24), DB (May 12), FRBNYNowcast (May 1, May 8, Nowcast not included in table calculations), Q1 estimates based on latest forecast before release of Q1 GDP Actual2. Quarterly estimates in terms of qoq% seasonally adjusted annual rate (saar)3. Imperial College COVID-19 response team

Q3 2020 Q4 2020

70© Oliver Wyman

U.S. Real GDP Growth Q2 Forecasts over timeAnnualized growth rate, by select economic analysts (8) 1,2

Apr 15 – Apr 28Mar 15 – Mar 20 Mar 22 – Apr 2 Apr 29 – May 15

Mid March Late March – Early April Mid – Late April Early May

Median -13.5% -30.0% -36.3% -38.3%

Average -15.8% -28.9% -34.9% -36.3%

Max/Min -12%/-24% -25%/-34% -25.5%/-41.4% -30%/-40%

-10

-45

-25

-20

-5

-40

-35

0

-15

-30

DB

Goldman

GoldmanUBS

Annu

aliz

ed g

row

th ra

te (%

)

JP Morgan

DB

B of A

Goldman JP MorganTD

B of AMorgan Stanley

UBSJP Morgan

DB

TDB of A

JP MorganCBO

UBS

Nowcast (May 15) B of A

DB Morgan Stanley

Last updated: 5/18/2020

1. Sources: Bank of America, UBS, Goldman Sachs, Morgan Stanley, TD, JP Morgan, DB, CBO, FRBNY Nowcast (Nowcast not included in table calculations)2. Quarterly estimates in terms of qoq% seasonally adjusted annual rate (saar)

Late March – Early AprilMid March

• This degree of updating is unprecedented there is just a lot of uncertainty!

• Forecasts have begun to stabilize, showing less downward revisions in the past month

• Expect similar uncertainty for Q3 GDP predictions

Key observations from estimates

Early May

Q2 GDP FORECASTS HAVE BEEN TRENDING DOWNWARDS OVER THE PAST 2 MONTHSThe spread between estimates though has remained relatively constant across each time segment

Mid - Late April

71© Oliver Wyman

U.S. Unemployment Forecasts – Q1, Q2, Q3, and Q4Quarterly unemployment rate, by select economic analysts (5) 1

Key insights

• Most annual unemployment forecasts assume a steady economic recovery starting in June, and do not account for the possibility of subsequent significant waves of infection

• 36.5 million unemployment claims filed since start of the COVID-19 lockdown, wiping out the last eleven years of job gains3, 4

• Congressional Budget Office forecasts a slower employment recovery than most major banks

• The CARES Act has allocated ~$660B in forgivable loans to cover small business payroll expenses, padding against additional job losses in the short term

May 8 – 12 ActualsApr 17 – 24

THE DOWNWARD SHOCK TO GDP IS MIRRORED IN UNEMPLOYMENTThe escalation of the Covid-19 crisis has lead to significant bearish revisions unemployment forecasts globally

Peak unemployment during financial crisis2

1. Sources: Goldman Sachs (May 12), TD (Apr 20), Deutsche (May 12), JP Morgan (May 8), CBO (Apr 24)2. Sources: U.S. Bureau of Labor Statistics3. Source: Federal Reserve Bank of St. Louis4. Tracking unemployment forecasts against unemployment reports may be misleading – unemployment reports only record jobless workers actively searching for employment

Last updated: 5/18/2020

Q3 2020 Q4 2020

Q1 2020 Q2 2020 Q3 2020 Q4 2020

Median 3.8% 16.5% 14.0% 11.0%

Average 3.8% 17.8% 14.2% 10.1%

Min/Max 3.8%/3.8% 14.0%/25.0% 9.2%/18.5% 7.1%/12.0%

Actuals2 4.4% (Mar) 14.7% (Apr)

Q2 2020

20

Q1 2020

15

5

10

0

25

CBO

Deutsche

TD JP MorganMarch Actual

Deutsche

TD

JP Morgan

CBO

Deutsche

CBOApril Actual

Goldman

CBO

Goldman

JP Morgan

JP Morgan

Deutsche

TD

Goldman

Une

mpl

oym

ent r

ate

(%)

TD

72© Oliver Wyman

87

91

8889

929394

90

95969798

10099

Q8 (2009 Q4)

(4Q 21)

Q3 (2008 Q3)

(3Q 20)

2020 COVID Crisis consensus1

Q7 (2009 Q3)

(3Q 21)

Q4 (2008 Q4)

(4Q 20)

Q5 (2009 Q1)

(1Q 21)

Start(2007 Q4)

(4Q 19)

Q2 (2008 Q2)

(2Q 20)

Q6 (2009 Q2)

(2Q 21)

CCAR 2020

Financial Crisis

Q1 (2008 Q1)

(1Q 20)

U.S. Real GDP relative to Q4 2019 (100) and compared to CCAR and Financial crisisEstimates as of Apr-201 US GDP Indexed to P0 (CCAR 2020)2 and 4Q07 (Financial Crisis)3

CCAR projected quarterFinancial Crisis quarter2020 COVID Crisis projection

1. Consensus as the average of Goldman Sachs (May 12), JP Morgan (May 8), Morgan Stanley (May 15), CBO (Apr 24),TD (Apr 20), UBS (Apr 29), Deutsche (May 12) forecasts, Bank of America (May 8) Q1 forecasts based on latest estimates before release of Q1 GDP actual2. Source: “CCAR 2020 data release” - Federal Reserve3. Source: Federal Reserve Economic Data

GDP PROJECTIONS ASSUME A RETURN TO PRE-COVID LEVELS BY EARLY 2022We continue observing downward adjustments: as of last week, the expectation was to recover by early 2022

Last updated: 5/18/2020

73© Oliver Wyman

U.S. Unemployment Forecasts compared to CCAR 2020 and Financial CrisisQ1 2020 – Q4 2021

CCAR projected quarterFinancial Crisis quarter2020 COVID Crisis projection

1. Consensus as the average of Goldman Sachs (May 12), JP Morgan (May 8), Deutsche (May 12), TD (Apr 20), CBO (Apr 24) forecasts; consensus for 2020 Q4 – 2021 Q4 does not include CBO estimates2. Source: “CCAR 2020 data release” - Federal Reserve3. Source “Unemployment Rate” – Federal Reserve Bank of St Louis

UNEMPLOYMENT PROJECTIONS ASSUME A RETURN TO PRE-COVID LEVELS BY EARLY 2022

Last updated: 5/18/2020

8%

4%

6%

10%

12%

14%

16%

18%

2%

20%

22%

24%

26%

Q3 (2008 Q3)

(3Q 20)

Q5(2009 Q1)

(1Q 21)

Une

mpl

oym

ent r

ate

Financial Crisis3

Q1 (2008 Q1)

(1Q 20)

Q2 (2008 Q2)

(2Q 20)

Q4(2008 Q4)

(4Q 20)

Q6(2009 Q2)

(2Q 21)

Q7(2009 Q3)

(3Q 21)

Q8(2009 Q4)

(4Q 21)

CCAR 20202

2020 COVID Crisis consensus1

= range of COVID Crisis forecast estimates

74© Oliver Wyman

THE FINANCIAL CRISIS RESULTED IN A LASTING SHIFT IN THE LONG-TERM TREND OF REAL GDP

U.S. Real GDP in log scale1947 – April 2020

Long-term trend lines

Source: Federal Reserve Economic Data

Break in level and slope post 2008

75© Oliver Wyman

LATEST GDP ESTIMATES IN SELECT REGIONSThe escalation of COVID-19 crisis has lead to significant downward revisions in GDP forecasts globally

Consensus 2020 Real GDP Growth Forecasts, Nov 20191 vs May 20202

% growth YoY, median

2.9%2.0% 1.6% 1.0% 1.0% 0.4%

5.7%

-1.1%

-5.5%

-3.3% -3.9% -4.5% -4.2%

1.5%

-3.2%

-6.4%-6.1%

-7.7% -7.6%-6.1%

1.3%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

Global US Canada U.K. Euro Germany China

2020 est. (in Nov 2019) 2020 est. (~early April 2020) 2020 est. (~early May 2020)

Last updated: 5/18/2020

1 Source: OECD.2. Sources, date of latest update: Bank of America (May 8), Moody’s (Apr 28), UBS (Apr 29), Goldman Sachs (May 6), Morgan Stanley (May 8), Deutsche (May 12), JP Morgan (May 8). GDP growth forecasts obtained as the median of estimates.3. Q1 GDP results in terms of qoq annualized rates4. Estimate from novel ‘flash estimate’ measure from Statistics Canada

2020 Q1 GDP3 -4.8% -10.0%4 -7.7% -14.2% -8.6% -34.7%

76© Oliver Wyman

THERE ARE SEVERAL POTENTIAL PATTERNS FOR ECONOMIC RECOVERY

Time

GDP

V-shaped recovery

Economy recovers relatively quickly

Time

GDP

Time

GDP

W-shaped recovery

Economy ‘re-opened’ too quickly

Increase in cases causes GDP to suffer

Swoosh-shaped recovery

Recovery slower than V-shape, but

faster than U-shape

Time

GDP

U-shaped recovery

Economy recovers slower than V-shape

Time

GDP

L-shaped recovery

Economy never fully recovers

77© Oliver Wyman

BREAKEVEN INFLATION RATES HAVE FALLEN BUT REMAIN ABOVE LEVELS REACHED DURING THE FINANCIAL CRISIS

10-Year & 5-Year Breakeven Inflation Rates2005 – May 15th 2020

Jan/05 Oct/13Apr/06 Jul/12Oct/08Jul/07 Jan/10 Apr/11 Jan/20Jan/15

2.0

1.0

Apr/16 Jul/17 Oct/18

0.0

-1.0

Apr/21

-2.0

3.0

-2.5

-1.5

-0.5

0.5

1.5

2.5

-2.12%

0.73%

0.12%

1.12%

10-Year Breakeven Inflation Rate5-Year Breakeven Inflation Rate

Source: Federal Reserve Economic Data

78© Oliver Wyman

FORECASTS OF FUTURE INFLATION ARE LOW BUT ABOVE DEFLATIONARY LEVELS

Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 (annual)

Median 2.1% 0.1% 0.3% 0% 0.7%

Actuals 2.1% 0.3% (April)

U.S. CPI Forecasts – Q1, Q2, Q3, Q4 and annualCPI %YoY, by select economic analysts (5)1

Deflation Inflation between 0 & 1.5% Inflation between 1.5 & 2.5%

3.9% 78.5% 17.1%

U.S. PCE Probability estimations, as of April 2020 Probability of PCE over next 12 moths falling below 0 or staying within the identified range, by FRB St. Louis2

1. Sources: Bank of America (May 8), UBS (Apr 29), Goldman Sachs (May 12), Morgan Stanley (May 8), Deutsche (May 12), JP Morgan (May 8). 2. Federal Reserve Economic Data3. FRB St. Louis (Apr 9), Financial Times (Apr 28)

Quotes from select economic analysts3

• “In the short term, though, the negative demand shock (a possible deep recession) combined with the collapse in crude oil prices will likely result in an economy-wide disinflationary shock that could last for several months.” –Economic Research at FRB St. Louis

• “Longer-term market gauges show investors do not expect the extraordinary rescue measures undertaken by the US central bank and the federal government are likely to trigger a surge in consumer prices” – Financial Times

APPENDIX

80© Oliver Wyman

NOT ALL COVID-19 INFECTIONS ARE CREATED EQUAL: SOME WILL SPARK MORE SUBSEQUENT INFECTIONS THAN OTHERS, WITH SIGNIFICANT IMPLICATIONS

• While R0 denotes the mean number of new infections sparked by any one infection, k reflects the variability inherent in this distribution

• Values of k closer to 1 indicate that the number of new infections sparked tends to be uniform, while values closer to 0 reflect high variability, e.g. most infections will result in no subsequent infections, while a few will result in many

• Very early evidence suggests that COVID-19 has a low k1, with several implications– Suppression measures: Situations that pack many

individuals together are far more likely to create outbreaks than many one-on-one contacts, suggesting bans on large gatherings are indicated

– Second wave: A second wave will arrive at an unpredictable time post re-opening as it may take a long time for any one infection to spark a large number of further infections; states aren’t safe just because they have made it a few weeks past re-opening

– Luck: Some geos with good outcomes may simply have gotten lucky, and that luck may run out

R0 of 3

k = ~1 (low variability– 1918 flu)

k= ~.1 (high variability- COVID-19)

1. Science (link)

81© Oliver Wyman

55%of Americans say COVID-19 is impacting their mental health1

52% of Americans report concern about job security, and 45% are worried aboutreductions in income 6

33% of respondents indicated frequent feelings of isolation5

20% admitted increases in alcohol consumption5

>50% of respondents reported new musculoskeletal concerns5

50% of respondents reported discontent with current work-life balance5

64% report loss of sleep due to worry5Other Risk Factors

Since the Emergence ofCOVID-19

9XDisaster distress helpline calls at SAMHSA compared to March 20194

24%of Americans indicated thatCOVID-19 has resulted in anincrease in family conflict3

+34%Increase in anti-anxietyprescriptions from mid-February to mid-March2

HOW ARE AMERICANS BEARING UP?

1. Sykes - Americans’ Perceptions of Telehealth in the Era of Covid-19 Program observations, 2. ESI – America’s State of Mind Report, 3. American Psychiatric Association, 4. SAMHSA, 5. Institute for Employment Studies, 6. Kaiser Family Foundation

82© Oliver Wyman

MASKSThere is no easy answer on masks: N95 and surgical masks are necessary for medical workers, other types of masks may reduce transmission for other essential workers and the general public, but efficacy is uncertain and may promote counterproductive behaviorsMask Description Commentary

N95 Respirator • Disposable, tight fitting• Creates seal on face to limit

particle inhalation• Filters at least 95% of very

small particulates

• CDC and WHO recommend that general public do not use N95 respirators; reserve for healthcare professionals• Effective at blocking transmission, but does not completely eliminate risk of infection• Many studies suggest respirators are more effective at filter efficiency across all particle sizes than other methods–

however, some medical masks may achieve similar filter efficiency6

• Other evidence suggests for non-aerosol generating care, N95s and surgical masks are roughly similar in efficacy8

Surgical/Medical mask • Disposable, loosely fitted• Creates physical barrier

between contaminants and wearer; does not create seal around nose/mouth

• WHO recommends that medical masks be reserved for healthcare workers• Use of medical masks by symptomatic individuals may reduce transmission; WHO recommends medical masks when

symptomatic• Evidence on efficacy is varied

– Some studies showed that surgical masks (worn by the healthy) can reduce the risk of infection through respiratory droplets, but not in aerosols (particles floating in air for up to three hours)4

– However, others showed no evidence that surgical masks worn by sick individuals reduced transmission5

• Only effective in tandem with other hygiene guidelines (e.g. handwashing regularly); may create false sense of security in public, reducing overall adherence to hygiene recommendations

• May lead to increased touching of the face among public, increasing transmission• Improper use of masks (e.g. reusing disposable masks) may increase risk of infection

Cloth face coverings • Reusable face coverings, often homemade

• Creates physical barrier between nose/mouth and air

• CDC recommends use of cloth face coverings in public settings where other social distancing guidelines are difficult to maintain

• As with surgical masks, evidence is varied: – Some evidence suggests that cloth masks offer no protection for healthcare workers inhaling infectious particles near

an infected or confirmed patient6

– Others suggest broad population benefits, with limited harm7

– A broad review of literature suggested fabric masks may reduce the transmission or larger respiratory droplets, but have little effect on small aerosoles9

• Possible that cloth masks increase transmission due to wearers ignoring other social distancing guidelines and increased face touching

Sources: 8. The Lancet (link); 2. CDC (link), (link); 3. WHO (link), (link),; 4. Nature (link); 5. Annals of internal medicine (link); 6. University of Minnesota (link); 7. BMJ Nutrition, Prevention and Health (link); 8. Influenza and Other Respiratory Viruses (link); 9. National Academies of Engineering, Science, Medicine (link)

83© Oliver Wyman

HEALTHCARE SUPPLY CHAIN: PPEAn already precarious PPE supply chain met with a surge in demand and disruptions to manufacturing and transportation has created an ongoing shortage

Sources: 1. Health Security (link); 2. Asian Development Bank (link) 2. Marketplace (link), 3. NPR (link) 4. NEJM (link) 5. House Oversight Committee (link). 6. GetusPPE (link)

Existing supply chain issues revealed by 2009 H1N11

• Gaps and a lack of transparency in supply, driving overly large demand through counterproductive stockpiling behavior

• Lack of clarity around product specifications or potential substitutes

• Reliance on foreign manufacturers

Current manufacturing and transportation issues• A significant proportion of PPE is made in early hot spots

(50% in China alone2) disrupting manufacturing• Some countries (22 at last count) that manufacture PPE

such as Taiwan which at least temporarily halted export3

• Reduction in passenger flights reduces a channel by which PPE freight has traditional traveled4

Coordination• Continued lack of national transparency and coordination

in demand has led to reports of shipments diverted or seized by the Federal Govt5

• Localities remain confused on logic for Fed Govt PPE distribution (e.g. does not seem to be driven by case count)6

Implications• Will delay reopening or greatly increase risk of reopening

– PPE represents a greater bottleneck for healthcare supply than beds and personnel

– Potential vicious cycle: shortage of PPE is likely to result in more sick healthcare personnel, further reducing capacity

– Also makes public social distancing measures more difficult (i.e. if masks must be reserved for healthcare staff)

• Healthcare providers will need to carefully consider infection control when reopening to non-COVID care– If PPE remains too scarce to provide to all, completely

separate facilities or a slow ramp up in elective care may be necessary

Result: A Shortage: % of providers in each state saying they have less than 1 week of N95 mask supply7

53%

64%

63%

74%

64%

41%

65%

0% 10% 20% 30% 40% 50% 60% 70% 80%

California

Florida

Illinois

Massachusetts

Tristate Area (NY, NJ, Conn.)

Pennsylvania

Texas

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1. Tourism includes hospitality and food and beverage sectorsSource: Fitch Solutions – FitchConnect

GDP BY INDUSTRYAfrica

$442

$406

$276$261

$239$210

$179 $174

$69 $68$53 $43

$22

Trade MiningAgricultureManufacturing Construction Tourism1Other services,

incl. professional

services

Transport & storage

Finance & real estate

Human health

Education Info. & comms

Utilities

African GDP by industry, 2018$ BN Very disrupted: Business is nonexistent

or severely disrupted

Somewhat: Most can at least continue a large portion of their business

Less: Nearly all can continue the much of their business

How disrupted by suppression measures

85© Oliver Wyman

$127$121

$105 $104

$84$79

$72

$55

$37

$22 $19$14

$8

Manufacturing MiningTradeFinance & real estate

ConstructionOther services,

incl. professional

services

Transport & storage

Tourism1Agriculture Education Utilities Human health

Info. & comms

1. Tourism includes hospitality and food and beverage sectorsSource: Fitch Solutions – FitchConnect

GDP BY INDUSTRYSouth America

Very disrupted: Business is nonexistent or severely disrupted

Somewhat: Most can at least continue a large portion of their business

Less: Nearly all can continue the much of their business

How disrupted by suppression measuresSouth American GDP by industry, 2018$ BN

86© Oliver Wyman

WHERE ARE THE KEY RISKS AS WE REOPEN? Indoor spaces with limited air exchange where people spend extended periods of time pose the biggest risks

LOCATION TYPES POSING GREATEST RISK• Large workspaces: Call centers, meat packing plants and other

densely populated work places where individuals work in an enclosed space sharing the same air for prolonged periods of time are a high risk (e.g., outbreak in S. Korea call center, multiple US meatpacking plants)

• Restaurants and Bars: While restaurants are taking steps to spread out diners and even put up physical partitions between tables, recirculating air in a small space has the potential to infect many diners simultaneously (e.g., Guangzhou restaurant outbreak associated with air conditioning air flow, recent S. Korea outbreak linked to bars)

• Transportation: A study of 318 outbreaks in China identified transportation as the location of 34% of the identified outbreaks, likely driven by close quarters, limited ventilation and necessary contact with high touch surfaces

• Choir / Church: The combination of spending an extended period of time in the same air space and singing which increases respiration increases likelihood of a significant transmission event (e.g., Community choir in Washington State)

• Indoor sports: Similar to above, the combination of extended time, heavy breathing and enclosed spaces lead to risks of significant transmission (e.g., Edmonton outbreak post curling tournament)

INFECTION = EXPOSURE x TIMEInfection is dependent on an individual’s exposure to sufficient viral particles. This can occur either via a single event with a high number of particles (e.g., a cough or sneeze) or prolonged exposure to a low level of viral particles (e.g., breathing near an infected co-worker for multiple hours)

Adapted from Erin Bromage’s “The Risks – Know them - Avoid them” (link), NYT “Is it Safer to Visit a Coffee Shop or a Gym?” (link) and medRxiv (link)

Get outside: Increasingly, research suggests that outdoor activity poses significantly lower risks. Many re-opening regions are starting with outdoor activities (e.g., parks) and guiding businesses to think about moving as much activity outside as possible

Think creatively about operations: Re-think not just traffic patterns and distance between employees / customers, but about ventilation and airflow patterns, seating arrangements and other means of lowering the number of potentially circulating viral particles

87© Oliver Wyman

WHAT IS THE EVIDENCE AROUND EFFECTIVENESS OF SUPPRESSION MEASURES?While it will take time to truly understand impact of individual suppression measures on R0, initial modeling and empirical evidence is beginning to identify more and less effective measures

Modeling and now empirical studies have begun to identify more and less effective measures

Modeling1,2,3

Targeted isolation is the biggest bang for the buck

Empirical Restaurant closures proved effective, school closures, less so

• Case isolation of infected patients, home quarantines of all patient contacts, and social distancing, esp. of vulnerable populations were estimated to have the greatest impact

• School closure had a meaningful impact in most models, but was often less impactful (e.g. lowest effect in an Imperial College London Study)

• These assumed ability to ID and intervene the majority of cases; without this capability, broader suppression is necessary

• German analysis demonstrated effects for large event cancellation, school closure, business closure, and strict stay at home orders all had effects, though all effects were relatively minor until the full stay at home order4

• US study suggest restaurant closures and stay at home orders were most effective, while school closures and large event cancellation did not have a significant effect5

• Recent French outbreak connected to schools was misleading: most cases likely predated reopening6

1. Imperial College London (link) 2. Science (link). 3. Lancent (link) 4. Science (link). 5. Health Affairs (link) 6. NBC News (link)

But don’t over interpret

• Error bars are large: Researchers are using limited sets of noisy data; conclusions are suggestive but not final, and lack of significance does not mean no effect exists

• Based on a different stage of the pandemic: Data is based on growing stages of the pandemic and may not reflect the dynamics of releasing suppression as cases lessen

• Results may vary widely by geo: Suppression measures that are necessary in a geo with limited targeted mitigation capabilities or specific cultural characteristics may not be effective in other geos

And this is just one half of the equation

• Governments are unlikely to make decisions based purely on suppression measure effectiveness

• The economic and social impacts of suppression measures will be considered as well

• For example: limited evidence that school closures are effective will likely lead to significant pressure to reopen schools, mixed evidence around restaurants may result in more conservative behavior

88© Oliver Wyman

SCHOOL CLOSURES ARE A DRASTIC MEASURE WITH FAR-REACHING IMPACT; EVIDENCE IS MIXED ON WHETHER THE MEASURE MAKES SENSE

Are kids at riskof severe illness?

• Initial epidemiological evidence from China suggested lower infection rates and lower severity of illness in children (~1%)

• This evidence has been reproduced in Europe and the US, but criticized for potential challenges due to 1) lack of testing in children and 2) studies being conducted post school closures

• Studies on broadly tested populations (S. Korea, Vo) also reveal very low rates of infection in children

• Mortality for children has been low, only a handful of cases worldwide

• Cases of pediatric multisystem inflammatory syndrome (a severe complication that in some cases resembles Kawasaki disease) potentially linked to COVID-19 illness are beginning to emerge in children aged 3-18:

– Number of cases is still small, but progressively more are being identified in retrospect (e.g., Italy)

– New reports have identified several young adults in their 20’s also affected

Do kids transmitCOVID-19 to adults?

• Multiple tracing studies suggested that children were rarely the index case in a familial cluster and that transmission from child to adult was infrequent

• A recently published study from Wuhan and Shanghai found that while children were 1/3 as likely to get infected, they had 3 times as many contacts (when school was open) evening out the risk of transmission

• Another recent study from Germany demonstrated that children that test positive, harbor as much virus as adults suggesting infectiousness

• Multiple larger studies aimed at understanding transmission patterns in children are underway (e.g. NIH HEROS, St. Michael’s Hospital, Toronto)

Do simulation models suggest school closures impact R0?

• Imperial College COVID-19 response team’s simulation suggested that while school closures reduce R0, it was the least effective of the measures they modelled

• Simulations from a recent study in China suggest that while school closures are not sufficient on their own to control the epidemic on their own, they can reduce peak incidence by 40–60%

• A recent review of the literature also sites an early simulation of a SARS-like illness which concludes that school closures would reduce the effective R0 by 12–41%

Sources: Adapted from Science (link) and (link), New York Times (link) and (link), Don’t Forget the Bubbles (link) and Lancet (link)

Summary: yes, but at a lower frequency than adults

Summary: evidence is very mixed Summary: most models suggest some impact, but extent varies

89© Oliver Wyman

SURVIVING AND RECOVERING

Description

This group includes states and cities hardest-hit by the pandemic. Most states have passed their peaks – some weeks ago –and are remaining closed or beginning to reopen with the lowest-risk areas first.

COVID-19 has spread widely across these communities. 0.5-1.7% of these populations have been diagnosed, and 15-20% of some states may be infected.

Risk factors in these areas (urban density, reliance on public transit, and high degrees of intra/inter-state travel) require particular caution and planning.

Regional reopening approaches in these states will help mitigate risk of spread in major urban areas.

Implications for public health

• Testing is not sufficient for the degree of spread, as results range from 10-40% positive (vs. South Korea at ~2%)

• Contact tracing hiring is up, but current plans do not yet meet the NACCHO target

• Mask use in public and social distancing are required in most states, and should be reinforced as new social norm

Implications for the economy

• These states are likely to be the last to fully reopen their economies, including small indoor businesses and entertainment venues (e.g. Broadway not slated to open before September 6) – and will have lower tolerance for a repeat shut-down

• Increasing testing, tracing, and selective quarantine capabilities is the best strategy to bring these economies back online

Key metrics as of 5/15

Cases/100K500-1K

CFR4-10%

New growth-5 to -25%

Testing5-25% pos.

1

Implications for businesses in these states • Since major cities in these states rely heavily on public transit,

employers will have to consider how essential employees can get to work safely

• These states are likely to be last to reopen schools, childcare, and camps – so working parents may continue to juggle job productivity with caregiving and may require further support

Picture is quickly evolving; states are expected to move between archetypes as circumstances change

90© Oliver Wyman

PREPARING FOR RECOVERY

Description

These states were impacted but not as severely, either due to fewer risk factors in their population or thanks to an aggressive early containment approach (CA, NM, OR, WA).

These states are still near their active cases peak, but new cases are slowing, and states are preparing for testing and tracing by increasing testing capacity (some doubling weekly) and contact tracing (e.g., MN plans to bolster their existing workforce by 900%).

Implications for public health

• Maintain or improve testing to reach <5% positive (VA, WI, NH, MN)

• Hire, train, and deploy contact tracers in advance of the next major reopening milestone (NH, NM, and WY are far below estimated need)

• Strengthen expectations around PPE and social distancing, which are currently recommendations rather than requirements

Implications for the economy

• Regional approaches to reopening are often warranted for states with larger metros (e.g. LA stay-home order in effect until September)

• Once testing, tracing, and quarantine capabilities are shored up, if new cases continue to be stable or declining, these states will be well-positioned to open up parts of their economy, region by region

Cases/100K100-300

CFR4-6%

New growth-40 to 0%

Testing1-15% pos.

Implications for businesses in these states • These states can learn from other states’ experiences as they reopen,

and can leverage the lead time before reopening to develop more robust return-to-work site and workforce safety plans (i.e., delineate staging of employees for return, create longer-term WFH roles and transition packages, develop onsite testing and tracing plan if needed to supplement government programs)

2

Picture is quickly evolving; states are expected to move between archetypes as circumstances change

Key metrics as of 5/15

91© Oliver Wyman

Description

These states lifted stay-home orders and/or business restrictions while they were still nearing their peaks, however their testing rates had improved to WHO standards (below 10% positive), and new case growth rates were largely stable (except TN and ND).

Reopening policies vary: Some reopened broadly (NC, ND, TX), while others are taking regional, staged approaches (TN, ME, UT).

Since reopening, these states continue to see stable new case growth, and most states have further improved testing (TN, UT, ND have reached <5% positive results).

Implications for public health

• Countries like South Korea have demonstrated that strong testing, tracing, mask-wearing, and quarantine can contain the pandemic without needing stay-home orders and blunt economic lock-downs; even as they face subsequent infections

• These states have demonstrated adequate testing, but that may not be enough given their extremely low contact tracing capabilities (TN, NC, ME, UT)

Implications for the economy

• Consumer confidence indices are 20-30% below pre-pandemic levels, likely keeping volumes low at reopened businesses in the near future

• While most businesses are reopened, high-risk businesses (bars, entertainment venues) are still likely to be delayed

• Even South Korea and Japan, which have been managing the pandemic relatively successfully, have had to re-close bars due to secondary outbreaks

Cases/100K100-300

CFR1-5%

New growth-20 to 20%

Testing2-9% pos.

MANAGING THE SURGE

Implications for businesses in these states • Since these states are reopening while the transmission is still active -

and growing in some areas, the population needs to be particularly cautious about distancing, PPE, and hygiene

• Create zero-tolerance culture around not wearing PPE or coming to work sick

3

Picture is quickly evolving; states are expected to move between archetypes as circumstances change

Key metrics as of 5/15

92© Oliver Wyman

EAGER REOPENING

Description

These states were hit later by the pandemic, applied stay-home orders and/or business restrictions, but lifted those restrictions while still nearing peak and with new cases growing.

Many had short periods of restriction (GA for 3 weeks, MO for 4 weeks) or had limited restrictions to begin with (IA, NE, SD).

At reopening, these states had insufficient testing (avg 18% positive), but since reopening, most have improved (now avg 12% positive). Most states have slowed their growth of new cases – but there is risk of new surges.

Reopening policies vary, and while masks in public are recommended, they are not required.

Implications for public health

Increasing testing and tracing is critical and urgent given the reopened economies

• Strategies should be deployed to enforce distancing / PPE

• Testing has not yet achieved WHO guidelines (<10% positive)

• Contact tracing should also be developed, as every state’s projected contact tracing workforce is insufficient to meet NACCHO standards (except NE)

Implications for the economy

• Despite the state lifting restrictions from businesses, retail activity is still ~20 – 30% below pre-pandemic levels, and consumer confidence is slightly negative overall, threatening economic recovery1

• New cases in select regions (SD) threaten secondary outbreaks that may require subsequent lock-downs

Cases/100K100-450

CFR1-6%

New growth-30 to 20%

Testing4-17% pos.

4

Implications for businesses in these states • Employees and customers may be more likely to feel unsafe • Create stay-home policies that ensure employees who test positive

or become symptomatic can be safely and reliably quarantined• Consider need for frequent testing and contact tracing of your employee

population relative to states’ capacity

Classification as of May 15: Picture is quickly evolving; states are expected to move between archetypes as circumstances change

1 Source: link

Key metrics as of 5/15

93© Oliver Wyman

SPARED AND REOPENED

Description

These states have been least impacted by the pandemic to date, and reached their peak early (nearly all within 3 weeks of the 100th case)

At reopening, these states had passed their peak, and most had strong testing results of <5% positive (with the exception of NV and SC). Most reopened statewide, but those with denser cities are taking a regional approach (FL, NV, HI)

Since reopening, test results have worsened slightly, but new cases have remained mostly stable. Mobility indices are highest in this group

Implications for public health

• Don’t allow testing and tracing to slip – identifying sufficient cases was critical to these states reopening without a major secondary outbreak yet, but average per capita testing is currently lower than the other archetypes

• Hospitals must have surge capacity planning in the event of a future outbreak, even if they were spared initially

• Distancing / PPE requirements may be needed, given less direct experience with pandemic impact

Implications for the economy

• Consumer confidence may recover faster in these regions, since they were spared from the most damaging effects;current sentiment is slightly higher than other reopened archetypes, and is roughly neutral (vs. significantly positive or negative)

Implications for businesses in these states • States with major urban centers face a more significant risk of outbreak,

so businesses will need to convey the gravity of the risk to employees and consumers, even though their communities have not experienced the damage first-hand

Cases/100K50-250

CFR2-6%

New growth-20 to 80%

Testing0-8% pos.

5

Picture is quickly evolving; states are expected to move between archetypes as circumstances change

Key metrics as of 5/15

94© Oliver Wyman

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