Exploiting Change

By Richard Martin

The fundamental law of economics is that of supply and demand. The price for any commodity is set at the intersection of customers’ desire to acquire the commodity and its availability for purchase. The market price thus brings together sellers and buyers and is constantly adjusted to value which customers attribute to a commodity and the price which sellers are willing to accept.

What we are seeing right now in the Covid-19 pandemic is a breakdown, or rather the failure, of the natural workings of the market system. The pandemic has caused and continues to cause a surge in demand for medical care, especially acute care as represented by ICU bedspaces. Unfortunately, the medical supply system has failed to respond to those surges other than at the margins, by calling in retired medical professionals, converting some space, and deferring other potentially life-saving interventions (e.g., cancer and cardiac treatments).

To see how the market can respond in a rapid and effective manner, we only have to look at how private sector enterprises have been able to rapidly switch production lines to serve surging needs in many areas. Numerous manufacturers converted and ramped up production of surgical masks, respirators, nitrile gloves, clear plastic faceguards, medical garb, to name a few of the most needed items. While not instantaneous, the shift happened at light-speed by the standards of the medical community.  Private operators understood the commercial opportunity and reacted accordingly to meet an unfulfilled demand, without any prompting by ponderous government overseers.

The same has occurred in the field of DNA tracking, infection testing, contact tracing, and, most important of all, vaccine development. It is a wonder to behold how rapidly and effectively biomedical and IT companies have focused their efforts on developing treatments and counter measures. All is not perfect, but compared, once again, to the habitual inflexibility of existing medical care systems, the progress is nothing short of miraculous.

Except it isn’t miraculous. The adaptations that have successfully arisen over the last year are due to three key factors. First of the these is a new, unfulfilled demand.  The second is private initiative to satisfy that demand. And third is competition. Even public sector labs and research institutions have gotten in on the game, seeing who can come up with an effective treatment or vaccine first. A small manufacturer in Quebec came up with an innovative and elegant solution to filter out at least 99% of particles in the air. It was only the workplace safety bureaucracy in Quebec that was refusing to approve the new type of mask because it didn’t conform to antiquated and inflexible regulations, despite the proven effectiveness of the design by federal lab tests.

I present these various private and competitive initiatives to illustrate that the solutions for the surge in demand for acute medical care being adopted around the world are stuck in the past and completely incapable of adapting to the reality around them. Early in the pandemic, in the spring of 2020, there were signs of hope. Despite all the criticism he received, President Trump was the only head of government in the developed world to order the mobilization of military medical know-how. He despatched two massive hospital ships, one to New York and the other to Los Angeles. The Javits Center in New York was converted by the US Army Corps of Engineers into a multi-thousand-bed hospital. Trump also initiated the set-up of field hospitals throughout the US. As far as we know, none of these emergency facilities were used much as the first wave subsided over the summer, and we have heard nothing of them since.

We can criticize Trump’s political skills and incessant Tweeting all we want, but we cannot but acknowledge his response  in the manner of an entrepreneur. If the demand for your products is through the roof, you invest as quickly as possible in new capacity. The fact that he used the US military to do so also shows that the military approach to medical treatment is highly appropriate in a pandemic. Military planners are taught to anticipate and estimate casualties resulting from operations and to concentrate medical assets to absorb the shock.

What happened during the summer of 2020? Most of us deluded ourselves into believing that the worst of the pandemic was over. We thought we could go back to business as usual and just wait for a vaccine to be available. Our government and medical leaders instituted lockdown measures in the spring and early summer of 2020 to “flatten the curve.” Most of us accepted the logic of the decision as a temporary measure. The federal government and most of the provinces instituted financial assistance to those most in need. We can argue about whether either set of measures was effective and appropriate, but at least they tried to defend against the worst effects of the shutdown.

However, as any military strategist or entrepreneur will tell you, defence is only a temporary measure to reconstitute forces and plan for a counterattack. Eventually, all protective barriers are breached; all business success is undermined by competitors. Thus, when the going is good, or there is a lull in the battle, that is the best time for planning to go back on the offensive.

In the case of the pandemic, our governments should have done everything possible to go on the offensive. Vaccine development has led to the first immunization campaigns, but it’s still way too early to see if the strategy will be effective. The 2020 summer lull in the pandemic presented an opportunity to build up capacity in the medical system. No doubt there was trimming and tugging around the edges of the system, but nothing like what was already then being anticipated as needed.

The Trump administration’s mobilization of military medical expertise is indicative of the type of campaign that should have occurred. In Canada, Quebec and Ontario asked for, and got, the temporary assignment of Canadian Armed Forces personnel to clean up the mess in nursing homes and long-term care facilities that had been neglected for too long. But that was only a stopgap measure. The premier of Quebec, François Legault, did launch an emergency campaign over the summer of 2020 to recruit and train 10,000 new caregivers for the province’s long-term care facilities. He did this despite resistance from within the provincial health department and unions. Part of the program involved offering much more enticing salaries. The program has not been perfect, but it has been largely successful and continues to fill out the ranks of the provinces long-term care facilities. Is it happenstance that Legault is a former businessman?

Instead of just mailing cheques to individuals and businesses, the Trudeau government should have ordered a massive campaign to mobilize the military to provide medical expertise and field engineers to the provinces to build standard field hospitals, complete with emergency facilities, ICUs, and casualty transportation and evacuation. The military was against using the armed forces in that manner, citing the need to maintain “preparedness.” However, this is like cutting off your nose to spite your face. The country, the entire world in fact, was engaged in a battle where time and resources were of the essence. The Prime Minister should have overruled the Chief of the Defence Staff and the Minister of National Defence. The war was happening, and the main resource that the nation has was busy practising manoeuvres in Wainwright Alberta. It reminds one of the joke extant within the professional officer class at the end of the First World War: “Now, we can finally get back to real [i.e., colonial] soldiering”.

Meanwhile, the most imaginative solution that anyone in government and in the medical system can come up with is to shut down society, by force if necessary. Thus, confinement, lockdowns, and even curfews are in effect everywhere, not just in Canada and the US. Instead of really going on the offensive against the pandemic and investing massively in upgrading and supplementing medical infrastructure, our leaders in government and medicine have chosen to blame the victim and make him/her pay by suppressing their liberty, freedom of movement, and right to earn a living and associate.

The population has by and large complied, at least in Canada and Europe. The only exception is the US, where the natural rebelliousness of the people and willingness to risk arrest and even death has meant that a large percentage of the population is actively resisting the lockdowns.  There is a logical argument to be made in favour of lockdowns and restrictions of movement and human contact. However, to the best of my knowledge, there is no scientific, evidence-based demonstration of their effectiveness to stop or resist the spread of the virus. The effectiveness of such radically disruptive and impoverishing measures is just assumed, apparently based on nothing more than common sense and that everybody is doing it.

I’ve proposed in this article an alternative solution, to be used instead of or in combination with any number of other measures. The lack of imagination of our health care and governmental leadership is breathtaking. On the other hand, we have seen what can be done when private initiative and competition are allowed to seek out solutions to obvious problems. Selective restrictions to contact and movement, as well as medical triage are no doubt needed and valuable. But they can’t be the only solution. We need to go back on the offensive, relaunch society and the economy, allow people to earn a living, and force our medical practitioners and administrators to stop dictating how to fight the pandemic.

We can see that the lockdowns and curfews are of dubious value while generating massive direct and opportunity costs for individuals, families, whole industries and countries. We will regret the restrictions because we’re not maintaining and upgrading the wealth and systems in a timely and effective manner. Moreover, we’re hoping that vaccination and immunization hold the key. But what if they don’t? What if in a year people are still dying and we still don’t know how to eradicate the disease? Shouldn’t our leaders, our governments, our doctors and medical administrators be looking for other options?

The author is an expert in crisis leadership and a former officer in the Canadian Army, with over 26 years’ experience in various missions around the world. He is currently the president of the Canadian Academy of Leadership and Development of Human Capital (canlead.org) and principal of Alcera Consulting Inc. (Alcera.ca), a firm that helps executives and organizations exploit change to grow and prosper. He is the author of Brilliant Manoeuvres: How to Use Military Wisdom to Win Business Battles.

© 2021 Richard Martin