Covid, AIDS and the Dismal Science of Public Health

The field suffers from a lack of expertise in the economic incentives that limit disease

Letter to WSJ.

"John Tierney’s “Unlearned AIDS Lessons for Covid” (op-ed, Oct. 4) correctly stresses the public-health community’s history of overforecasting diseases. But the lack of expertise in the economic incentives that limit disease is much broader, as Richard Posner and I argued three decades ago. Since then, the field of economic epidemiology has exploded, and Covid-19 represents many déjà vu experiences of its main lessons.

First, the course of communicable diseases is driven more by incentives in the private sector than by government policy. The incentive for prevention rises with disease occurrence. This implies a self-limiting effect on disease growth—contrary to public-health predictions—but also exponential growth early on in the outbreak. Thus, testing in early 2020 was not as central as claimed by many, including by Drs. Deborah Birx and Scott Gottlieb. A great testing program would still battle low prevention incentives, including demand for tests.

Second, government prevention has less impact than hoped. In the short run, individuals react quicker than governments. President Reagan’s response to HIV and President Obama’s to H1N1 are extreme illustrations of government lags, and restaurants were already empty due to Covid when many states banned attendance. Government policy may drive down cases temporarily, reducing private prevention and leading to a disease’s re-emergence in the long run—hence Covid cycles following lockdowns. Public prevention “crowds out” private prevention, thereby increasing total prevention by less than promised.

Third, innovation is often the cheapest prevention. Drugs for HIV or bariatric surgery for obesity are less costly than changing the demand for reproduction and food, hard-wired by evolution. For Covid, medical R&D in the billions was far cheaper than economic losses in the trillions.

Fourth, appropriate policy does not minimize disease but balances the total losses from prevention and disease. The evidence shows the U.S. balanced it better than many “role-model” countries in 2020. “Doctor knows best” does not apply to disease policy, in part because it induces “government knows best” policies.

Prof. Tomas J. Philipson

University of Chicago

Chicago"