COVID-19: Top‐​Down Confusion vs Horizonal Cooperation

April 8, 2020

The former CEO of the Bill and Melinda Gates Foundation, Susan Desmond‐Hellmann, discussed ways to prepare for the next pandemic in the Wall Street Journal:

First, there is no substitute for federal preparedness when it comes to ensuring a ready supply of personal protective gear. Companies like Apple and Facebook stepped up to donate masks they had stockpiled when California wildfires pushed them to protect their staff, and other private companies were able to leverage their global supply chains to pitch in. As grateful as we should be for these efforts, it’s not the private sector’s job to save us in a public health emergency.

It is the role of the federal government to adequately stockpile and plan for a pandemic. Clear accountability on the National Security Council, matching the authority that already exists for the military procurement and supply chain, would allow asset allocation to the states and regions in greatest need. It would avoid what we see today, with states competing against each other for vital supplies.

Alas, I fear that is a harmful message—that the nation should rely on the federal government to do the planning and stockpiling for crises. Such reliance would undermine incentives for the states, hospital systems, and other institutions to build their own inventories of emergency supplies. A diversity of approaches and distributed supplies will create more resilience than putting all our eggs in one basket, especially when the one basket is the failure‐prone federal government.

Desmond‐Hellmann wants a military‐style “authority,” but such a centralized structure would produce inferior decisions because, as Walter Olson noted, state leaders have more knowledge of local resources, hazards, and priorities. Also, experience shows that federal intervention can slow disaster response by adding layers of unneeded rules.

In the current crisis, federal intervention into medical supply chains is creating confusion. The Los Angeles Times reported yesterday that “the federal government is quietly seizing orders, leaving medical providers across the country in the dark about where the material is going and how they can get what they need to deal with the coronavirus pandemic.” A new CNN report similarly describes the confusion and complexity that FEMA and White House manipulation of medical supplies is creating.

During his daily briefings, President Trump seems to relish acting like a central planner dishing out ventilators and masks here and there to various states. But the LAT and CNN reports suggest that the nontransparency of federal seizures—basically theft—is creating anger and uncertainty in the medical community.

Desmond‐Hellmann thinks that federal stockpiling would avoid “states competing against each other for vital supplies.” But wouldn’t it do the opposite? The larger the share of the nation’s medical supplies controlled by the federal government, the more intense the political jockeying would be because states and hospital systems would face more uncertainty and desperation.

People may think that federal coordination is needed during disasters, but the states coordinate among themselves all the time. As I discuss here, the states have a standing agreement (EMAC) to share assets during disasters such as hurricanes. When Hurricane Katrina hit in 2005, Florida rushed its stockpile of emergency supplies to Louisiana. During wildfires, the states share firefighters and equipment. Similarly, electric utilities share crews and equipment during disasters. Where I live in Virginia, utility trucks have come in from other states to assist after storms have knocked out power. Such horizontal cooperation is more efficient than vertical control through Washington, which adds regulations, delays, and politics.

The federal government has important roles to play during disasters. The military has unique assets that can be crucial, such as Navy hospital ships during the current crisis and Coast Guard vessels during hurricanes. And it does make sense for the federal government to have backup supplies of critical medicines and other resources. But federalism should underpin disaster preparation and response, and emergency supply systems should be mainly based on distributed stockpiling, markets, and horizontal cooperation.


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