The Schwab Test: As the world knows more, we might learn how to panic less

When the facts change, I change my mind. What do you do, sir?

John Maynard Keynes

The world has two fairly polarised views on COVID-19. The popular view is that the virus is extremely dangerous and we need to take whatever actions are necessary to suppress (or eliminate it) until we come up with a miracle vaccine.

The alternative (Sweden and Trump) view is that the virus itself isn’t that bad, and the actions taken to curb it have led to far more damage.

The problem, it seems, is we are looking at the wrong metrics. Because of what happened in northern Italy, New York and the UK, we assumed that COVID-19 was not only highly contagious but also concerningly lethal.

In northern Italy by the end of March, more than 60 doctors had died of COVID-19-related illnesses. Then came New York, where horrific management of aged-care facilities led to more than 30,000 deaths.

These facts led most people, your author included, to advocate for hard lockdowns — with the dual purpose of saving lives but also being able to reboot the economy quickly.

But in the last month something strange has happened that has made the popular view seem less sensible.

While there has been a significant acceleration in the number of reported COVID-19 cases globally, the number of people actually dying has dropped significantly. Not just in percentage terms, but in raw numbers as well.

That leads to two possibilities (or likely a combination of both): either doctors around the world have suddenly become far better at treating the virus, or increased testing has revealed people have it without even realising.

Johns Hopkins University found that in the past 30 days to July 11 there was an increase of 5,225,548 cases. During that time there have been 142,988 deaths. The reported fatality rate in the past 30 days: 2.73%. (In reality, the fatality rate is significantly less and upwards of a third of people with COVID-19 have no symptoms).

By contrast, Johns Hopkins data stated that in April there were 2,319,739 reported cases, and 184,661 reported deaths — a reported fatality rate of 7.18%.

Closer to home, on June 24, Victoria had conducted 696,263 tests and recorded 1884 confirmed cases — a positive test rate of 0.3%. As of July 11, Victoria’s number of active cases leapt to 3560, but it had conducted 1,095,219 tests. The positive test rate, almost identical, 0.3%.

Victoria has had a lot more cases lately, but it has also been conducting a lot more tests. The more testing that has happened, the more cases have mysteriously appeared, at what appears to be a linear rate. It is entirely feasible that if all of Victoria were tested tomorrow, the 0.3% rate would remain, and overnight, there would be 20,000 active cases.

In hindsight, authorities were likely correct in locking down Australia in late March. The imperfect information and, more critically, lack of testing and tracing infrastructure, meant that we needed to learn more about the virus and buy time.

But now, as subsequent waves occur, the decision to lockdown a second time is far less clear.