Success with New Zealand's bold elimination strategy will see tight restrictions gradually lifted - but how should that happen?

In a new analysis, economists have proposed a path out of lockdown that might enable authorities to ease certain restrictions as rates of Covid-19 transmission begin to fall, with allowing more domestic travel a possible first step.

But a scientist has pointed out that care and context is needed when making such cost-benefit calculations.

In their report, Dylan James and David Gawith of strategic advisors Castalia, said there would soon be evidence to show whether the nationwide lockdown was working to reduce transmissions rates to manageable levels.

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They used such rates to carry out their analysis: a rate of 2.5 implied the virus could be passed from a person to infect an average 2.5 people, while a rate of below one implied the virus could die out.

In Korea, China and Taiwan, there was some evidence that tough suppression measures worked.

While there was some uncertainty about the reliability of that data, analysis of infection rates in the Chinese province of Hubei, where the pandemic emerged from, suggested the rate had fallen to 0.32 during the height of efforts.

"We will not have to wait long for an empirical understanding of the R that the lockdown measures are achieving in New Zealand," they wrote.

"Over the next few weeks, we will have enough observations to determine the trend in our infection rate under lockdown, and thus calculate R."

They said that, to gain control of the outbreak in the initial phase, almost all measures that reduced "R" should be taken – but added that the costs of these measures could not be sustained for long.

"Lockdown measures carry enormous social costs, losses in productivity, administration costs, and compliance costs," they said.

"Over time additional costs could emerge as new problems are created in areas such as law and order, domestic violence, mental health, lost educational opportunities, and the like."

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There was now a rapidly-compounding economic crisis, which could drive a 10 per cent fall in New Zealand's GDP in the three months to June.

While under-shooting interventions meant the loss of lives, over-shooting them – either by maintaining restrictions for too long, or imposing them unnecessarily - equally carried enormous economic costs.

"To guide decisions, we need a strategy for relaxing restrictions that balances the risk of further outbreaks against social and economic costs."

They assessed interventions to push down transmission rates – including case isolation, public hygiene campaigns, travel restrictions, bans on gatherings and forced closures of businesses and institutions – and then looked at which might be relaxed at what point.

This table sets out the potential interventions that can be used to reduce transmissions of Covid-19. Source / Castalia
This table sets out the potential interventions that can be used to reduce transmissions of Covid-19. Source / Castalia

They categorised the economic cost of different interventions, with forced closures and lockdown measures at the high end of the scale; and bans on recreational sport and international travel in the middle; and measures like contact tracing and case detection at the lowest end.

This table illustrates estimates of the impact of interventions on transmission rates. Source / Castalia
This table illustrates estimates of the impact of interventions on transmission rates. Source / Castalia
This table gives initial estimates of the real economic costs and cost effectiveness of different interventions, with rankings included. Source / Castalia
This table gives initial estimates of the real economic costs and cost effectiveness of different interventions, with rankings included. Source / Castalia

But they noted that the actual cost effectiveness ranking of the various interventions could only be estimated once more data had been gathered and more analysis done.

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They proposed that, as soon as transmission rates had been pushed to well below one, domestic travel restrictions and people being forced to stay inside their homes, could be relaxed first.

This figure sets out how NZ might relax restrictions at different stages. Source / Castalia
This figure sets out how NZ might relax restrictions at different stages. Source / Castalia

They noted that the closure of businesses and institutions like schools and retailers are likely to remain marginal policy calls.

"Our proposed framework, properly applied, can provide a foundation for the difficult policy decisions of if, when and which interventions to relax," they said.

"To properly apply the framework, we need to gather and assess information on the economic costs of the various interventions.

"Additional, more in-depth analysis is required before applying the framework to ease any restrictions. If we can get the evidence, then we can use this framework to find the most cost-effective way to protect New Zealanders against the corona virus epidemic."

Professor Shaun Hendy, director of Te Pūnaha Matatini, New Zealand's Centre of Research Excellence in Complex Systems and Data Analytics, said caution needed to be exercised when making cost-benefit analyses of the pandemic response.

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"Importantly they note that there would be what economists call 'crowding out' effects," Hendy said.

"That is, if you relax domestic travel restrictions, then you might make testing less effective, because you are having to trace contacts and manage tests for one case over the whole country rather than in one geographic region.

"This is a key weakness of their approach. In fact, because we are dealing with a complex system with a tipping point - will we contain the outbreak or won't we - then their analysis needs to properly take into account the dynamic interdependence of the interventions.

"A naive cost-effectiveness analysis could prove highly misleading."

James acknowledged the point.

"As Professor Hendy says, we need to understand the complex dynamic nature of the system if we are to crack this," he said.

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"We also need insight from epidemiologists. It's going to be really important for different disciplines to work together in the next days and weeks to chart the best course for New Zealand."

Meanwhile, Kiwis should know this week whether they will be kept in lockdown for longer than four weeks as Prime Minister Jacinda Ardern and her Cabinet ministers are set to receive fresh advice.

Director-General of Health Ashley Bloomfield said there had been a flattening off in new coronavirus cases, but that he would like to see if that continued over the next two or three days.

A team of Otago University epidemiologists have also looked at what will make elimination of Covid-19 successful in New Zealand – and when restrictions could start being lifted.

Writing in the New Zealand Medical Journal, they singled out key measures as border controls and quarantine for incoming travellers; fast case detection, widespread testing and swift contact tracing; strong promotion of hygiene, such as hand-washing; and "intensive" physical distancing, such as the current lockdown, which could be relaxed if elimination was working.

They also suggested smartphone technology to speed up contact tracing, along with greater use of face masks so infected people who were pre-symptomatic had less chance of spreading the virus.

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"The exit path will need to be based on demonstrable high-performing border controls and case and contact follow-up, along with sufficient testing and surveillance to detect a low risk of Covid-19 circulation in the population," they said.

"Under these circumstances, the lockdown can be gradually relaxed, potentially on a regional basis."