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A right pig’s ear

The government panicked over the threat of swine flu – and got its response completely wrong

Brace yourself - swine flu is on the rise again. The second wave coincides with mounting disquiet among doctors about the way we as a nation are responding to the disease. A recent survey by Pulse, a leading GP periodical, found that 61 per cent of family doctors believe the government should review its policy of blanket provision of Tamiflu to all suspected sufferers. It also reported a growing number of cases that have resulted in death or serious harm after conditions such as meningitis have been misdiagnosed as flu, and wrongly treated.

Swine flu has wrong-footed everyone. For many years it was assumed that when the next pandemic arrived, it would create havoc: thousands would die in Britain alone; the exponential demand for services would be mirrored by the decreasing number of healthy doctors able to deliver them; societies would crumble. This projection was based in part on the 1918 global flu pandemic - which caused an estimated 50 to 100 million deaths - coupled with the high fatality rate among the few hundred cases of "bird flu" (H5N1) over the past few years.

In the UK, huge quantities of antiviral drugs were stockpiled, plans for establishing a national pandemic flu phone line were laid, and organisations both public and private were exhorted to draft detailed contingency plans for when the carnage began. Both chambers loaded, the shotgun was trained on the far horizon, the collective eye of the viral surveillance world squinting down the barrel, seeking out the first sign of an emergent threat.

Along came swine flu (H1N1). To be clear: people have died - 82 in the UK and an estimated 4,041 worldwide, at the time of writing. According to the World Health Organisation (WHO), roughly 60 per cent of the severe or fatal cases have occurred in recognised risk groups, such as people with grave underlying health problems; the remaining 40 per cent have affected fit children and adults. Each death is tragic, but the mortality figures are tiny, viewed against the millions of mild cases globally.

Writing in the British Medical Journal in September, Peter Doshi, a doctoral student at the Massachusetts Institute of Technology, proposed a framework to differentiate between disease patterns. Type 1 infections are widespread and severe - exactly the kind towards which the current pandemic flu plans are geared. But swine flu sits in Doshi's type 3 - widespread but usually mild. These different beasts present different challenges, but because pandemic planning failed to anticipate anything other than a type 1 scenario, swine flu has triggered a completely inappropriate response.

Marginal effects

Central to doctors' unease is the National Pandemic Flu Service (NPFS). Telephone-based and web-based assessments of symptoms are made using a computer algorithm. If the computer says "swine flu", patients are given antiviral medication, usually Tamiflu. The problems are twofold.

First, data from the Health Protection Agency, which conducts confirmatory laboratory tests on a sample of cases, shows that less than 10 per cent of NPFS diagnoses are correct. The other 90 per cent of supposed swine flu sufferers have other illnesses whose symptoms happen to overlap. (Doctors fare only slightly better, diagnosing at best a quarter of cases accurately.) Second, the drugs being doled out are by and large worse than useless, even in the correctly diagnosed cases. Tamiflu makes only a marginal difference to the course of uncomplicated flu and causes side effects in up to 40 per cent of people who take it. On the whole, these are just bothersome - vomiting is the most frequent - but serious, even fatally adverse reactions do occasionally occur.

In late August, WHO advised that antivirals were not necessary for fit patients suffering from uncomplicated swine flu. The Department of Health defends its continued policy of Tamiflu-for-all on "safety first" grounds. Its concern is those exceptional cases of severe disease in fit individuals, where Tamiflu might (no one knows for sure) make a difference if started early. However, the logic - that it is better to treat everyone than risk missing those who might have benefited - belongs to a strategy for dealing with a Doshi type 1 pandemic, where the chance of severe disease is high. For swine flu, damage from indiscriminate use of antivirals outweighs the supposed benefits of catching atypical cases early.

The real challenge of a Doshi type 3 pandemic is identifying the small minority who actually and urgently require help. These could be those rare individuals with severe flu, or they might be patients in the early stages of another serious disease such as meningitis. Doctors are good at doing this (though far from infallible) and many GPs believe that only medically qualified staff should be undertaking flu assessments, but this is not achievable, given our capacity for mass hysteria. During the first wave of swine flu - before the NPFS was launched - the NHS front line was overwhelmed by waves of worried callers in flu hot spots. One of the main reasons for setting up the NPFS was to prevent a meltdown in services, but it should now change its focus from diagnosing swine flu (at which it is hopeless) to identifying patients in trouble.

The trickiest problem is when patients who initially feel mildly unwell start to deteriorate. The Department of Health stresses that patients are advised to consult a doctor if they get worse, but this fails to appreciate the Tamiflu effect. Having been "diagnosed" with swine flu and put on antivirals, patients are then falsely reassured that appropriate treatment is under way. By stopping its blanket use of Tamiflu, the NPFS would greatly increase the likelihood of patients consulting a doctor if they deteriorate.

Lessons in planning

Swine flu may in time be seen as a great learning opportunity. It has exposed a rigidity in pandemic planning that needs urgent correction. WHO has a scale to denote the spread of in­fection - level six being pandemic. It needs to develop a simple, parallel system to differen­tiate between Doshi types, one that should trigger responses appropriate to the particular challenge posed.

For now, the Department of Health should stop sticking doggedly to contingencies laid against a very different threat. The public and the NHS need clear identification of the at-risk groups and a message that the danger of swine flu, for everyone else, is almost certain to be minimal. They also need information about the warning signs of a more serious problem. The vast stocks of antivirals should be left on the shelf to go quietly out of date.

Yet it may be too late. Another facet of the Tamiflu effect is that we have educated hordes of people that what they thought felt like just a bad cold (and, most of the time, was just a bad cold) needed treatment with powerful drugs involving mystical rituals with a special authorisation number and a flu friend. Doctors will be dealing with mass hysteria in the face of ­minor illness for some time to come.

Phil Whitaker is a doctor and novelist. He is currently working on his fifth novel, "Sister Sebastian's Library"

 

Computer says flu

What do malaria, meningitis, diabetic coma, leukaemia and appendicitis have in common? They are just a few of the conditions that were originally diagnosed as swine flu during the first wave of the pandemic. Most patients have lived to tell the tale; some have not. The case reports have been appearing in the letters pages of medical journals, and on discussion forums of networking sites for doctors. The GPs reporting them are frequently unsure who in authority should be informed.

In fact, the National Patient Safety Agency (NPSA) has been tasked by the Department of Health with investigating alleged misdiagnoses. In a statement, John Scarpello, NPSA deputy medical director, confirmed that the agency had received "a small number of reports where swine flu may have been misdiagnosed", but was unwilling to go into detail while the facts had not been established. Given that the reporting system is entirely voluntary, and few clinicians know to contact the NPSA, this "small number" of reports is likely to be the tip of an iceberg.

The National Pandemic Flu Service is a first: never before have patients been diagnosed by computer or unqualified call-centre staff. There is a real need for research to examine this approach, yet none appears to be planned. The Department of Health refers inquiries about patient safety to the NPSA, while the NPSA believes commissioning such a study would be outside its capacity and brief.

Phil Whitaker

This article first appeared in the 12 October 2009 issue of the New Statesman, Barack W Bush

MILES COLE
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The new Brexit economics

George Osborne’s austerity plan – now abandoned by the Tories – was the most costly macroeconomic policy mistake since the 1930s.

George Osborne is no longer chancellor, sacked by the post-Brexit Prime Minister, Theresa May. Philip Hammond, the new Chancellor, has yet to announce detailed plans but he has indicated that the real economy rather than the deficit is his priority. The senior Conservatives Sajid Javid and Stephen Crabb have advocated substantial increases in public-sector infrastructure investment, noting how cheap it is for the government to borrow. The argument that Osborne and the Conservatives had been making since 2010 – that the priority for macroeconomic policy had to be to reduce the government’s budget deficit – seems to have been brushed aside.

Is there a good economic reason why Brexit in particular should require abandoning austerity economics? I would argue that the Tory obsession with the budget deficit has had very little to do with economics for the past four or five years. Instead, it has been a political ruse with two intentions: to help win elections and to reduce the size of the state. That Britain’s macroeconomic policy was dictated by politics rather than economics was a precursor for the Brexit vote. However, austerity had already begun to reach its political sell-by date, and Brexit marks its end.

To understand why austerity today is opposed by nearly all economists, and to grasp the partial nature of any Conservative rethink, it is important to know why it began and how it evolved. By 2010 the biggest recession since the Second World War had led to rapid increases in government budget deficits around the world. It is inevitable that deficits (the difference between government spending and tax receipts) increase in a recession, because taxes fall as incomes fall, but government spending rises further because benefit payments increase with rising unemployment. We experienced record deficits in 2010 simply because the recession was unusually severe.

In 2009 governments had raised spending and cut taxes in an effort to moderate the recession. This was done because the macroeconomic stabilisation tool of choice, nominal short-term interest rates, had become impotent once these rates hit their lower bound near zero. Keynes described the same situation in the 1930s as a liquidity trap, but most economists today use a more straightforward description: the problem of the zero lower bound (ZLB). Cutting rates below this lower bound might not stimulate demand because people could avoid them by holding cash. The textbook response to the problem is to use fiscal policy to stimulate the economy, which involves raising spending and cutting taxes. Most studies suggest that the recession would have been even worse without this expansionary fiscal policy in 2009.

Fiscal stimulus changed to fiscal contraction, more popularly known as austerity, in most of the major economies in 2010, but the reasons for this change varied from country to country. George Osborne used three different arguments to justify substantial spending cuts and tax increases before and after the coalition government was formed. The first was that unconventional monetary policy (quantitative easing, or QE) could replace the role of lower interest rates in stimulating the economy. As QE was completely untested, this was wishful thinking: the Bank of England was bound to act cautiously, because it had no idea what impact QE would have. The second was that a fiscal policy contraction would in fact expand the economy because it would inspire consumer and business confidence. This idea, disputed by most economists at the time, has now lost all credibility.

***

The third reason for trying to cut the deficit was that the financial markets would not buy government debt without it. At first, this rationale seemed to be confirmed by events as the eurozone crisis developed, and so it became the main justification for the policy. However, by 2012 it was becoming clear to many economists that the debt crisis in Ireland, Portugal and Spain was peculiar to the eurozone, and in particular to the failure of the European Central Bank (ECB) to act as a lender of last resort, buying government debt when the market failed to.

In September 2012 the ECB changed its policy and the eurozone crisis beyond Greece came to an end. This was the main reason why renewed problems in Greece last year did not lead to any contagion in the markets. Yet it is not something that the ECB will admit, because it places responsibility for the crisis at its door.

By 2012 two other things had also become clear to economists. First, governments outside the eurozone were having no problems selling their debt, as interest rates on this reached record lows. There was an obvious reason why this should be so: with central banks buying large quantities of government debt as a result of QE, there was absolutely no chance that governments would default. Nor have I ever seen any evidence that there was any likelihood of a UK debt funding crisis in 2010, beyond the irrelevant warnings of those “close to the markets”. Second, the austerity policy had done considerable harm. In macroeconomic terms the recovery from recession had been derailed. With the help of analysis from the Office for Budget Responsibility, I calculated that the GDP lost as a result of austerity implied an average cost for each UK household of at least £4,000.

Following these events, the number of academic economists who supported austerity became very small (they had always been a minority). How much of the UK deficit was cyclical or structural was irrelevant: at the ZLB, fiscal policy should stimulate, and the deficit should be dealt with once the recession was over.

Yet you would not know this from the public debate. Osborne continued to insist that deficit reduction be a priority, and his belief seemed to have become hard-wired into nearly all media discussion. So perverse was this for standard macroeconomics that I christened it “mediamacro”: the reduction of macroeconomics to the logic of household finance. Even parts of the Labour Party seemed to be succumbing to a mediamacro view, until the fiscal credibility rule introduced in March by the shadow chancellor, John McDonnell. (This included an explicit knockout from the deficit target if interest rates hit the ZLB, allowing fiscal policy to focus on recovering from recession.)

It is obvious why a focus on the deficit was politically attractive for Osborne. After 2010 the coalition government adopted the mantra that the deficit had been caused by the previous Labour government’s profligacy, even though it was almost entirely a consequence of the recession. The Tories were “clearing up the mess Labour left”, and so austerity could be blamed on their predecessors. Labour foolishly decided not to challenge this myth, and so it became what could be termed a “politicised truth”. It allowed the media to say that Osborne was more competent at running the economy than his predecessors. Much of the public, hearing only mediamacro, agreed.

An obsession with cutting the deficit was attractive to the Tories, as it helped them to appear competent. It also enabled them to achieve their ideological goal of shrinking the state. I have described this elsewhere as “deficit deceit”: using manufactured fear about the deficit to achieve otherwise unpopular reductions in public spending.

The UK recovery from the 2008/2009 recession was the weakest on record. Although employment showed strong growth from 2013, this may have owed much to an unprecedented decline in real wages and stagnant productivity growth. By the main metrics by which economists judge the success of an economy, the period of the coalition government looked very poor. Many economists tried to point this out during the 2015 election but they were largely ignored. When a survey of macroeconomists showed that most thought austerity had been harmful, the broadcast media found letters from business leaders supporting the Conservative position more newsworthy.

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In my view, mediamacro and its focus on the deficit played an important role in winning the Conservatives the 2015 general election. I believe Osborne thought so, too, and so he ­decided to try to repeat his success. Although the level of government debt was close to being stabilised, he decided to embark on a further period of fiscal consolidation so that he could achieve a budget surplus.

Osborne’s austerity plans after 2015 were different from what happened in 2010 for a number of reasons. First, while 2010 austerity also occurred in the US and the eurozone, 2015 austerity was largely a UK affair. Second, by 2015 the Bank of England had decided that interest rates could go lower than their current level if need be. We are therefore no longer at the ZLB and, in theory, the impact of fiscal consolidation on demand could be offset by reducing interest rates, as long as no adverse shocks hit the economy. The argument against fiscal consolidation was rather that it increased the vulnerability of the economy if a negative shock occurred. As we have seen, Brexit is just this kind of shock.

In this respect, abandoning Osborne’s surplus target makes sense. However, there were many other strong arguments against going for surplus. The strongest of these was the case for additional public-sector investment at a time when interest rates were extremely low. Osborne loved appearing in the media wearing a hard hat and talked the talk on investment, but in reality his fiscal plans involved a steadily decreasing share of public investment in GDP. Labour’s fiscal rules, like those of the coalition government, have targeted the deficit excluding public investment, precisely so that investment could increase when the circumstances were right. In 2015 the circumstances were as right as they can be. The Organisation for Economic Co-operation and Development, the International Monetary Fund and pretty well every economist agreed.

Brexit only reinforces this argument. Yet Brexit will also almost certainly worsen the deficit. This is why the recent acceptance by the Tories that public-sector investment should rise is significant. They may have ­decided that they have got all they could hope to achieve from deficit deceit, and that now is the time to focus on the real needs of the economy, given the short- and medium-term drag on growth caused by Brexit.

It is also worth noting that although the Conservatives have, in effect, disowned Osborne’s 2015 austerity, they still insist their 2010 policy was correct. This partial change of heart is little comfort to those of us who have been arguing against austerity for the past six years. In 2015 the Conservatives persuaded voters that electing Ed Miliband as prime minister and Ed Balls as chancellor was taking a big risk with the economy. What it would have meant, in fact, is that we would already be getting the public investment the Conservatives are now calling for, and we would have avoided both the uncertainty before the EU referendum and Brexit itself.

Many economists before the 2015 election said the same thing, but they made no impact on mediamacro. The number of economists who supported Osborne’s new fiscal charter was vanishingly small but it seemed to matter not one bit. This suggests that if a leading political party wants to ignore mainstream economics and academic economists in favour of simplistic ideas, it can get away with doing so.

As I wrote in March, the failure of debate made me very concerned about the outcome of the EU referendum. Economists were as united as they ever are that Brexit would involve significant economic costs, and the scale of these costs is probably greater than the average loss due to austerity, simply because they are repeated year after year. Yet our warnings were easily deflected with the slogan “Project Fear”, borrowed from the SNP’s nickname for the No campaign in the 2014 Scottish referendum.

It remains unclear whether economists’ warnings were ignored because they were never heard fully or because they were not trusted, but in either case economics as a profession needs to think seriously about what it can do to make itself more relevant. We do not want economics in the UK to change from being called the dismal science to becoming the “I told you so” science.

Some things will not change following the Brexit vote. Mediamacro will go on obsessing about the deficit, and the Conservatives will go on wanting to cut many parts of government expenditure so that they can cut taxes. But the signs are that deficit deceit, creating an imperative that budget deficits must be cut as a pretext for reducing the size of the state, has come to an end in the UK. It will go down in history as probably the most costly macroeconomic policy mistake since the 1930s, causing a great deal of misery to many people’s lives.

Simon Wren-Lewis is a professor of economic policy at the Blavatnik School of Government, University of Oxford. He blogs at: mainlymacro.blogspot.com

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt