The COVID-19 Virus
In this series of blogs, we have been supporting our argument that the United States has been undergoing a historic migration in our economy between manufacturing products and goods versus services for several decades. This is not a new argument, in fact, it is quite well established within the economic and financial systems. However, one thing that is important to note is that healthcare is being overlooked by financial markets and by most investors; healthcare, a service industry, is quietly becoming a predominant part of the service industry in the U.S. economy.
Previously, we noted how healthcare continues to grow and take market share from other industries because “opportunity cost” is still a factor in the macro market as it is in our own pocketbooks. We have also noted that in good times, healthcare compared to the overall economy does well, and in economic downturns, it actually leaps forward; again, a factor of opportunity cost and the desire of investors for a “safe haven,” until the economy spurs and they can look for the newest “shiny object” to invest their money.
As we write this, the world is being consumed by the growing epidemic, or possible pandemic of the COVID-19 virus. The world’s stock markets have reacted with material drops in valuation. In a recent news conference, the U.S. President, Donald J. Trump, shared an amazing graph:
The accompanying report states:
“…the Global Health Security Index was released and it examined whether countries across the world are prepared to deal with an epidemic or pandemic. The topic was thrust into the spotlight in 2014 when an Ebola outbreak devastated parts of West Africa, killing more than 10,000 people. That prompted many other countries to boost their levels of preparation.”
“The index analyzes those preparation levels by focusing on whether countries have the proper tools in place to deal with large scale outbreaks of disease. Measured on a scale of 0 to 100 where 100 is the highest level of preparedness, the United States came first, followed by the United Kingdom and the Netherlands. Unsurprisingly, higher income countries tended to record better scores in the index.”
President Trump made a point noting the United States has the premier research and disease management agency in the world, the Centers for Disease Control and Prevention (CDC). The CDC “is the leading national public health institute of the United States. The CDC is a United States federal agency under the Department of Health and Human Services and is headquartered in Atlanta, Georgia.” 
As everyone will point out (both foreign and domestic critics), the United States has an “expensive” healthcare industry, but we also have a deep and diverse healthcare infrastructure, supply chain and delivery system. It is also incredibly well interconnected and other than for “price” (another sore issue for me) is relatively transparent; for instance, we know the number of prescriptions each doctor writes. We know how much a doctor gets paid and what procedures they bill Medicare, and all their credentials are displayed in numerous platforms. Furthermore, we know that hospitals are highly regulated, certified and inspected regularly.
We are taking this threat of the COVID-19 virus seriously just as we take the exposure to the seasonal flu very seriously. In the United States, we average about 40,000 annual deaths from the flu.
I wonder if the extra precautions taken for the COVID-19 virus may reduce normal late season flu patterns?
Healthcare in most countries is a cost item, as it is in the United States; however, it is also a business. I will close this blog with two more facts; first from the Bureau of Labor Statistics. 
The median annual wage for healthcare practitioners and technical occupations (such as registered nurses, physicians and surgeons, and dental hygienists) was $66,440 in May
2018, which was higher than the median annual wage for all occupations in the economy of $38,640.
Secondly, the statistics on deaths associated with the COVID-19 virus are showing a marked difference in countries with a robust healthcare system and those without, i.e., China and Iran in the following chart.
|Country||Confirmed Cases||Deaths||% Death / Infection|
Above data issued by The WHO on 3/3/2020
For all the ills, difficulties and shortcomings perceived in the U.S. healthcare system, this brief snapshot indicates that our healthcare system is working, and the protective measures instituted by the government are protecting the public as well or better than any other nation. The business of America has indeed become healthcare – and thankfully for all of us here in the United States.
 Source: “Coronavirus Disease (COVID-19), Situation Report – 43, World Health Organization, https://www.who.int/docs/default-source/coronaviruse/situation-reports/20200303-sitrep-43-covid-19.pdf?sfvrsn=2c21c09c_2