Philadelphia Actuaries Club

Pandemics – Past, Present and FuturePandemics – Past, Present and Future

Presented by

Annemarie Brownmiller Consulting Services of Princeton, LLC

19 November 2009

Pandemics Past, Present and Future

• Definitions

• History of Pandemics

• Current Situation

• Implications of Pandemic

• Modeling Pandemics

Definition of Pandemic

• Pandemic: An epidemic (a sudden outbreak) that becomes very widespread and affects a whole region, a continent, or the world

• The most common characteristics are:• The ability to cause illness on a global basis

• Little or no pre-existing immunity

• Potential for serious complications

• Virus is new subtype

• No vaccines available in the early stages

• Influenza pandemic lasts longer than typical flu season

Definition of PandemicInfluenza Viruses

• Influenza Viruses– A

• Subtype (HxNx)

• Strain

• Multiple Species

– B

• Humans Only

– C

• Mild Illness

Definition of PandemicInfluenza Viruses

• Antigenic Drift– Minor change

– Same subtype

• Antigenic Shift– Major change

– New subtype

History of Pandemics

• History of Pandemics in the 20th century:

– 1918 Spanish Flu (most severe)– Infection Rate – close to 35%– Over 40 million deaths in 60 countries

– 1957 Asian Flu (moderate)

– 2 million deaths

– 1968 Hong Kong (mildest)

– 1 million deaths

Learning from the PastSARS

– SARS infected over 8,000 people in 25 countries resulting in almost 800 deaths

– Cost to global economy - $40 billion*

– Transported by air travel

*Roche, CDC

Inter-pandemic phase Low risk of human cases 1

New virus in animals, no human cases

Higher risk of human cases 2

Pandemic Alert No or very limited human-to-human transmission

3

New virus cases human cases

Evidence of increased human-to-human transmission

4

Evidence of significant human-to -human transmission

5

Pandemic Efficient and sustained human-to-human transmission

6

World Health OrganizationPhases of Pandemic Alert

21st Century Pandemic Threats H5N1 (Avian) Influenza

• H5N1 virus first identified in 2003

• 442 reported cases through 9/24/2009 and 262 deaths

• H5N1 is still a serious concern with the potential to cause a deadly pandemic.

21st Century Pandemic ThreatsNovel 2009 H1N1 (Swine) Influenza

• What is Swine Flu?– Morbidity– Mortality

• April 24, 2009– The World Health Organization reported 7 confirmed cases

of H1N1 in the United States.

• June 11, 2009– The World Health Organization declares a global pandemic

of the novel 2009 H1N1 (Swine Flu).

Current Pandemic Statistics Novel H1N1 2009 (Swine) Influenza

2009 H1N1 Cases Hospitalizations Deaths

0 – 17 8,000,000 36,000 540

18 – 64 12,000,000 53,000 2,920

65 + 2,000,000 9,000 440

Total 22,000,000 98,000 3,900

• CDC estimates of 2009 H1N1 Cases and Related Hospitalizations and Deaths from April – October 17, 2009 by Age Group (mid-level estimates)

Current Pandemic StatisticsInfluenza (Including Novel 2009 H1N1)

Source – CDC FluView as of Week 43

Implications of Pandemic Risks to Manage

• Economic

• Business Continuity

• Claims Surge

Risks to ManageEconomic

• Global recession

• Asset values

• Liquidity risk

Risks to ManageBusiness Continuity

• Employee absenteeism– How do we continue operations

when up to 30% of work force is absent

– In addition to sick employees, absenteeism results form sick family members along with the ‘worried well’.

• Disruption of infrastructure

• Flexibility

• Travel Policies

Risks to ManageBusiness Continuity

• Health Insurer– Demand for services

– Impact on revenue and reserves

– Supply chain

– Computer

– Plan benefits

– Communication

Risks to ManageClaims Surge

• Health Insurance Claims

• Disability Claims

• Workers Compensation

• Life Insurance Claims

Modeling Pandemic ImpactHealth Insurance

• Input

• Assumptions

• Scenarios

• Output

PandemicModel

Estimated excessclaims due to

pandemicNumber of Claims

Estimated excessclaims due to

pandemicClaim Cost

Estimated excessclaims due to

pandemicLimited by Capacity

Modeling Pandemic ImpactHealth Insurance

• Input to Model

– Exposure

– Duration

– Pandemic Waves

Modeling Pandemic ImpactHealth Insurance

• Occupancy and Surge capacity

– Hospital bed staffing

– Occupancy rate

– Surge capacity

– Critical care beds

– Ventilator capacity

Modeling Pandemic ImpactHealth Insurance

• Utilization

– Level of care

– Length of Stay

– Outpatient Visits

Modeling Pandemic Impact Health Insurance

• Cost Estimates

– Inpatient

• Non-ICU

• ICU

• Ventilator Dependent

– Outpatient

• Physician Visits

• RX Cost of Antiviral

Modeling Pandemic ImpactHealth Insurance

• Assumptions

– Infection Rate

• The attack rate of an influenza virus determines the percent of the population that becomes infected

• Attack rates can vary by age with illness among school age children tending to be highest

Modeling Pandemic ImpactHealth Insurance

• Assumptions

– Hospitalization rates

• Age

• Underlying health status

– Scenarios

• Mild Pandemic (1968 – Hong Kong Flu)

• Moderate Pandemic (1957 – Asian Flu)

• Severe Pandemic (1918 – Spanish Flu)

Modeling Pandemic ImpactHealth Insurance

• Output

– Number and cost of hospital admits• Non-ICU admits• ICU Admits• Ventilator Admits

– Number and cost of outpatient visits

– Capacity limits• Hospital surge capacity• Provider surge capacity

Pandemic Projections

Input Parameters Estimate*

US Population 307,024,641

Attack Rate 15%

Hospitalization Rate (of those infected) 6%

Acute Respiratory Failure Rate (of those hospitalized)

12%

* Source – Swine origin influenza A (H1N1) virus and ICU Capacity in the US: Are we prepared?

Authors: Marya D. Zilberberg, Christian Sandrock, and Andrew Shorr

Pandemic Projections

Outcomes Mean Estimate* CSP Model**

Total Cases 46,053,696 46,053,696

Hospitalizations 2,763,222 1,803,000

Acute Respiratory Failure 331,587 216,000

* Source – Swine origin influenza A (H1N1) virus and ICU Capacity in the US: Are we prepared?

Authors: Marya D. Zilberberg, Christian Sandrock, and Andrew Shorr

** CSP Model Using 15% attack rate and most likely assumptions for a moderate pandemic

Fighting the Virus

• Vaccines

– Development time

– Prioritization for vaccine distribution

• Populations at risk for complications

• Health care and public service

– Transmission impact

13%

18%

33%

25%

29%

57%

H1N FluVaccine

Seasonal FluVaccine

Very Safe Generally for Most People to Take

Fighting the Virus Safety of H1N1 vs. Seasonal Flu Vaccine

Very Safe for Pregnant Women to Take

Very Safe for Children 6 Months to 2 Years to Take

Harvard Opinion Research Program, Harvard School of Public Health, September 14-20, 2009.

Fighting the Virus

• Antiviral Medications

– Reduce the severity of influenza symptoms

– Lessen the risk of getting influenza

– Make people less contagious

Pandemics Yesterday vs. Today

– Better drugs

– Coordinated response

– Healthier population

– Global networks

– Global travel

– Population

• Size

• Density

– AIDS

PandemicsPast, Present and Future

• Review of pandemics

• Implications for insurance company

• Model insurance exposure

Questions?

Questions?

Thank you!