To safely reopen the economy, experts say the United States needs about 20 million tests per day: a test for every American about every two weeks. The White House plans, however, call for facilitating testing for approximately 2 percent of the population per month. At current rates, it would take more than three years to test everyone in the United States for covid-19. This failure to expand testing places the burden of a hasty reopening squarely on blue-collar Americans — and risks a dangerous second wave later this year.
Testing millions daily can be done. A bipartisan team of experts convened by the Rockefeller Foundation — of which I am a member — drew up plans for scaling up testing from 1 million to 30 million weekly.
The rub is that because huge numbers of tests are needed over a short time, scaling up testing will cost hundreds of billions of dollars. Spending, say, $250 billion for testing is a small amount compared with the trillions of dollars the economy is losing during the pandemic. Moreover, funding a testing surge is imperative to lower the risks that essential workers face during a recovery that stands to disproportionately benefit those who can work from home and who can afford to social distance.
Manufacturers of tests and testing supplies, and the providers who deliver covid-19 tests, are facing a unique market failure. Firms generally recoup research, development and other fixed costs over long time horizons. In the highly stylized models described in economics textbooks, producers get paid roughly their marginal costs — the cost of producing an incremental unit of their goods. But the pandemic has upended the usual model.
Huge numbers of tests are needed urgently. In all likelihood, presuming a vaccine is developed, the demand for testing will erode in 18 months. That means asking firms to bear huge costs to scale up production and figure out how to deliver tests without the usual runway to recoup startup expenses. Reaching the necessary volume of testing will cost more than we ever would have considered paying pre-pandemic.
Congress and the White House have not taken into account this market failure. While trillions of dollars have been allocated toward stimulus, small-business loans and other assistance to ease the pandemic’s economic impact, only $33 billion has been allocated to covid-19 testing. Federal Reserve and congressional actions have buoyed the stock market and eased the financial pain of nonessential workers. But most essential workers — the people powering the daily lives of the millions of Americans sheltering at home — don’t make their money off stocks. Our collective underinvestment in testing places much of the risk of reopening on those who will not proportionally benefit from their own labor.
As with much else, covid-19 has disproportionately affected vulnerable communities and blue-collar Americans. Looming disruptions in our food chain highlight the consequences of underinvesting in testing. Scores of essential, lower-paid workers at meatpacking facilities have contracted covid-19. President Trump could have surged testing to ensure the safety of these employees and, in turn, guaranteed their ability to put food on all Americans’ plates. Instead, he used the Defense Production Act to force workers back on the job in unsafe conditions. Here, a lack of testing forced workers to choose between their safety and their livelihoods, with the nation’s food security in the balance.
As White House practices illustrate, the technology exists to return covid-19 test results in minutes. That technology needs to be scaled up. Many have pinned U.S. testing shortages on a lack of reagents and swabs, unused testing capacity and trouble linking existing labs to providers’ electronic medical records systems. At their core, these problems are attributable to inadequate funding. Framed differently, there are not many supply-chain or production problems that a congressional allocation of $250 billion couldn’t solve.
Ultimately, the United States faces a choice. We can reopen the economy without adequate testing, a move that raises the likelihood of a second wave of infections and places the costs of reopening squarely on the backs of essential workers. Alternatively, Congress could allocate more money for covid-19 testing and the White House could use those funds to test essential workers at the same rates White House staff are tested. This is both economically justifiable and our moral imperative.