COVID-19 Q & A

By Charlie Bilello

14 Jun 2020


There’s been a lot of confusing reports lately on COVID-19.

Some are saying the worst is over while others are saying a second wave is coming that will be worse than the first.

Let’s run through some questions and answers to parse out where we are with the virus and where we may be headed…

1) Is the virus going away?

From the data, it does not appear so. New positive cases globally hit a record high in each of the last 3 days.

2) But I heard things were getting better?

They are in many places, especially Europe. The decline in cases in Italy, Spain, Germany and France is self-evident.

Daily new cases in the US are also well off their peak levels in early April, but the downtrend is noticeably less steep than that of Europe.

3) So how are new cases globally still hitting new highs?

Good question. The sharp increases in cases from other regions throughout the world have outweighed the declines in Europe and US.

In Asia, there has been a steady uptrend in cases in India, Pakistan, Bangladesh, and Saudi Arabia.

In Latin America, we’ve seen outbreaks in Brazil, Peru, Chile, and Mexico.

In Africa, cases are trending higher in South Africa and Egypt.

Another contributor is Russia, where new cases are down from their peak in May, but remain elevated.

4) Do new highs in cases = new highs in deaths?

Not necessarily. While new cases globally are hitting new highs, daily deaths are down 38% from their peak in April.

5) Does that mean the virus is becoming less deadly?

Not necessarily.

There are likely a few factors at play…

a) Under-reporting

In the countries that are showing an increase in cases, per capita testing is lower than Europe/US and therefore deaths may be underreported.

For example, Brazil is the new epicenter for the virus with around 1,000 deaths per day. But Brazil has only tested 0.7% of its population compared to 7% in the US. The actual death toll in Brazil could be much higher.

In Mexico, where only 0.3% of the population has been tested, deaths are likely to have been under-reported as well.

The same could be true in India, which has tested only 0.4% of its population.

While Russia has reported higher testing rates than in the US and most of Europe, it is widely suspected that they are under-counting deaths by a sizable margin.

b) Demographics

All COVID-19 cases are not equivalent.

There is a dramatic differential in death rates based on age and underlying health conditions.

Nearly a third of all deaths in the US have come from adults 85 and older, with nearly 93% of all deaths from adults 55 and older.

In children, we’ve actually observed fewer deaths thus far from COVID-19 than from the seasonal flu (source: CDC).

If the new cases are increasingly coming from a younger and healthier population, then, we should see a lower percentage of deaths.

Comparing Italy and India illustrates this point. The median age in Italy is over 45 versus 28 in India and 23% of Italy’s population is above 65 versus 6% for India.

Based on these differences, one would expect there to be differences in death rates between the two countries.

As we get better at protecting those most vulnerable (elderly and immune compromised), we should also expect death rates to go down.

Singapore is perhaps the best example of this, with 40,604 reported cases and only 26 deaths (.06% case fatality rate). In stark contrast, New York City has reported 206,322 cases and 22,076 deaths (10.7% case fatality rate).

How in the world is such a differential possible?

About 90% of cases in Singapore are coming from young, foreign workers living in tightly packed dormitories. This is a population with a much, much lower risk of death. At the same time, Singapore has taken drastic measures to reduce the risk of infection in places like nursing homes where the risk of death is exponentially higher.

They went so far as moving thousands of nursing home employees to hotels to reduce their interaction with the community and prevent the spread of the virus.

While such extreme measures are unlikely to go over well in the US, having a policy of directing nursing homes to accept COVID-19 patients in New York clearly cost lives.

As we learn from such mistakes and how to better protect those most at risk going forward, fatality rates will hopefully go down.

c) Increasing Testing Rates

As countries increase testing capacity to include those with milder symptoms, cases could increase or show a slow decline with deaths going down at a faster pace.

We’ve seen this trend play out in the U.S. as cases are down 33% from their April peak while deaths are down 65%.

6) If the rate of testing changes, should you compare the number of new cases today with the number of cases a month or two months ago?

No.

The US is the perfect example of this.

On June 12, the US tested 583,961 people for COVID-19 with 23,752 positive cases (4.1% positive).

A month earlier, on May 12, the US tested 304,745 people with 21,483 positive cases (7.0% positive).

It is impossible to make any conclusions from the slight increase in positive cases on June 12 versus May 12 as the rate of testing has increased so dramatically. The minor increase is more likely to be from picking up milder cases than an increase in the prevalence of the virus.

Overall testing rates in the US have tripled over the last two months, from around 150,000 per day to over 450,000 today.

We went from only testing the sickest patients to including those with milder symptoms and even those with no symptoms who have been in contact with a COVID-19 positive case.

7) Does more testing, then, always lead to more cases?

No. A lot of people are saying this but it is simply untrue.

To start with, it is not a one for one ratio. The percentage of positive tests in the US has moved steadily lower as we have tested more. Part of this is the decline in the virus, and the other part is that you are now testing those without symptoms who are less likely to be infected.

When a virus is truly in decline, the number of new cases will go down regardless of how much you test.

We’ve seen this in New York, which has steadily increased testing over the last 2 months (from 20,000 tests per day to 60,000 tests per day) while the number of cases is going down.

Conversely, more testing will lead to more cases in places where the virus prevalence is steady or increasing. But the conclusion should not immediately be that it is more testing alone that is leading to more cases.

We’re seeing this play out in Florida where on May 13 there were 15,159 tests given and 479 positive results (3.2% positive) while on June 13 there were 34,514 tests given and 2,581 positive results (7.5% positive).

Yes, the testing in Florida doubled over that time but the % of positive results increased as well. One cannot not simply dismiss the increasing case numbers, then, as a product of more testing. It is likely that the rate of infection is increasing.

8) If the number of new cases can be skewed by testing, what is a better raw metric to follow?

Hospital admissions are perhaps the best metric as they are a leading indicator of deaths and are not greatly influenced by the amount of testing.

On that front, we’ve seen a continued downtrend in the US overall, with total hospitalizations today at their lowest level since April 4. We are all hoping this trend continues in the coming weeks and months.

9) Are all states in the US showing a similar decline in hospitalizations?

Unfortunately, no.

The states that were hit hardest are showing the biggest improvements and skewing the data overall. New York, for example, has reported a decline in hospitalizations for 61 consecutive days, from a peak of 18,825 to the current level of 1,734.

Meanwhile, at least 12 states have shown an increase in hospitalizations since Memorial Day.

Source: CNN.com

While nowhere near the levels in New York at its peak, hospitalizations in Texas and Arizona are at new highs and should be monitored more closely going forward.

10) Are cases going to spike due to the reopening of the economy?

It’s too early to tell but thus far a “spike” higher does not appear to be occurring. Europe is ahead of us in terms of the virus and reopening and they have yet to see any spike higher (in fact, the downtrend has continued in most countries).

While some increase is to be expected with a reopening in the US (particularly the later phases), the worst fears will hopefully not be realized unless broad behavior reverts back to where it was before the lockdowns started.

This seems unlikely, especially in areas that were hit hard by the virus (my theory: the more likely you are to know someone who died or was hospitalized from COVID-19, the more likely you are to be careful going forward).

Many more people are wearing masks (whether they are required to or not) and being more cautious in general, most businesses that can work from home still are, schools are closed at least until the fall, travel and mass transit use is way down, and mass gatherings for the most part are still not permissible. While restaurants and stores are slowly reopening, they are taking increased precautions and nowhere near full capacity.

When was the last time you shook someone’s hand or hugged and kissed them hello?

My guess is it’s been a while. We don’t know how much of an impact this had on spreading the virus a few months ago, but it was certainly a contributor.

So in order to predict the trajectory of the virus going forward, the increase in interactions from reopening will have be viewed differently than a few months ago. We are not flipping a switch and going back to the activity and behavior in February, and hopefully that will be enough to at least keep the virus from getting out of control.

11) Are cases going to spike due to mass protest gatherings?

During Memorial Day weekend in New York, we were told that gatherings of more than 10 people were prohibited and social distancing (6 feet apart/masks) must be practiced at all times.

A week later, tens of thousands of people were in close proximity throughout the city with little social distancing.

There is at least a few-week lag between the time someone is infected with this virus and the time they show symptoms severe enough to get tested, so we will not know the ramifications for another week or two.

Hopefully any increase in cases/deaths will be minimal, and if so, we will have learned much about the risk of transmission in large crowds.

12) What is the risk of death if infected with COVID-19?

All questions seem to come back to this, and rightfully so. If 10% of people are dying from this virus it would warrant a much different response than 0.1%.

In March, the WHO was trumpeting a 3.4% fatality rate, which if true would have been disastrous.

Thankfully, they were off by a wide margin. As I argued in a post back in March, we were vastly underestimating the denominator (number of people actually infected with the virus). The only way to figure out the true number of people that had the virus was to not only test more broadly, but also do random antibody studies to determine who already had the virus and recovered.

Thankfully, many of these studies have since been done throughout the world, giving us much more information on the true infection fatality rate.

While the results have varied widely from study to study, most are estimating an infection fatality rate well below 1%.

The CDC’s “best estimate” is now a 0.4% fatality rate for those with symptoms and around 0.26% if we include the asymptomatic cases as well.

This is multiples higher than that of the seasonal flu, but orders of magnitude lower than the WHO’s estimate (3.4%) back in March.

13) What do we do with an infection fatality rate of 0.26%?

Yes, that is the central question and there’s no easy answer.

Everything ultimately comes down to an assessment of risk and reward. The virus has not disappeared (the charts above clearly illustrate this) but the risks of a continued global economic shutdown were simply too high to maintain for much longer (not only in terms of dollars, but ultimately lives as well).

A balance will have to struck going forward and every country, region, and individual therein will have to make an assessment of risk. The COVID-19 risk for an 8 year-old is not remotely the same as for an 80 year-old and it would therefore be unreasonable to expect the same behavior or levels of risk-taking between these two age groups.

While there are still many unknowns with this virus, we know a lot more today than we did just a few months ago. That’s true not only in terms of its actual fatality rate, but in terms of potential treatments, prevention, and immunity.

I’m confident we’ll continue to build on this knowledge and hopeful that we’ll use data and evidence to drive our decisions on the best way to proceed going forward.

To sign up for our newsletter, click here.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For our full disclosures, click here.

About the author

Charlie Bilello

Charlie is the founder and CEO of Compound Capital Advisors.

Share this post

Recent posts
8 to 80 Spotlight: Netflix
Covid-19: The Third Wave