About This Project

The research project aims to develop new quantitative framework and tools for public health decision makers and risk management professionals to assess COVID-19 pandemic risk and develop contingency and response plans.

The work represents a collaborative effort by researchers from the University of Illinois at Urbana-Champaign (United States) and Nankai University (China). This website is maintained and regularly updated by Illinois Risk Lab. Model details and instructions can be found in "Pandemic risk management: resources contingency planning and allocation" by Chen et al. (2020) [Download] .


What is a Pandemic?

An epidemic is the rapid spread of disease to a large number of people within a given population. A pandemic is an epidemic that spreads to multiple countries or continents in a short amount of time. Usually, a pandemic is caused by the limited knowledge and immunity to a new pathogen. This is such the case for the 2019 novel coronavirus.

The image below provides various examples to help differentiate between these two terms.

How Often do they Occur, and Just how Serious are They?

The following graph demonstrates both the frequency and severity of some notable epidemics since 1900.

The graph reveals that there have been thirteen impactful cases of infectious diseases have occurred in just the first two decades of the 21st century. Some of them are even considered to be pandemic or pandemic-prone(e.g. H1N1 , Dengue , and Covid-19 . One systemic study shows that the diversity and the total number of outbreaks has had a significant global increase since 1980.

"This is a new normal, I don't expect the frequency of these events to reduce." warned Dr. Michael Ryan, the Executive Director of the Health Emergencies Program at World Health Organization in 2019 during an interview with BBC .

What Risks are Associated with a Pandemic?

This section demonstrates the challenges faced by the economy, businesses, healthcare systems, and individuals during this pandemic.


The Economy

A pandemic disrupts normal economic activities. Most governments implement public policies to slow down the spread of a pandemic. Their public policies can suppress productivity.

For instance, the policies involving the closure of businesses can negatively impact the economy by causing a drop in consumer spending to about 68% of the normal GDP . In addition, the estimated cost of SARS related to the loss of economic activity is about $40 billion.

A risk facing the economy is the slowdown in its growth, which is indicated by a contraction in Gross Domestic Product (GDP). The U.S. Bureau of Economic Analysis (BEA) has estimated that there has so far been a 4.8% drop in the U.S. GDP.

Additionally, a decrease in economic success results in the loss of tax revenue. The government often must cut down expenditures while fighting against the pandemic and will also reallocate resources to support nationwide healthcare systems.


Businesses

The risks faced by businesses include supply chain disruption, mandatory shutdown, and decreased labor force participation.

To control the spread of disease, many factories were required to close, which caused a demand-supply imbalance in the supply chain of various industries (such as the transportation industry). Such a disruption in the supply chain damages business material logistics and prevents the normal operation of affected companies.

Large unemployment rates also produce a huge financial burden on national unemployment insurance. For job-seekers, it becomes harder to survive in the job market due to the combination of the decreasing number of unoccupied jobs and the rise of those looking for work

Stores, restaurants, and all other business areas that were profiting from social interactions were also forced into lockdown due to government orders focused on reducing the spread of this disease. Some companies were able to adapt to this change by migrating their daily work to online platforms. Yet, businesses whose success was dependent on physical labor, such as grocery stores and coffee shops , suffered a great loss in their profit.

Because of the loss of profits and the increasing practice of implementing cost reducing plans during lockdown, many companies have been forced to decrease their employee numbers or freeze their hiring processes , which has caused massive pandemic-related unemployment. According to a report by McKinsey , it has been estimated that up to 53 million U.S. jobs are at risk for layoffs, furloughs and payment reduction. While certain expenses are saved due to the decrease money spent on human resources, this decision for lockdown has decreased the labor force participation rate, making certain companies less productive. This problem can also be detrimental to the development of businesses after the pandemic.

A rapid increase in unemployment also leads to a tremendous burden on national unemployment insurance. Because of the decreasing number of job opportunites and the increase in job applicants, job-seekers are unable to find jobs. Thus, the government must allocate more of its budget towards providing unemployment insurance to protect those that have been affected.


Healthcare Systems

The main challenge faced by the healthcare system is the lack of medical resources during this pandemic. Medical resources are more likely to not be delivered on time due to the disruption of the supply chain and the lockdown of factories. With the growth of infected cases during the Covid-19 pandemic, most American hospitals have declared shortages of personal protective equipment (PPE). The PPE that are at its lowest stock includes medical masks, face shields, booties, gloves, gowns, hand sanitizer, disinfecting wipes, and thermometers.

Smaller healthcare institutions suffer more from the broken supply chain . During Covid-19, many American hospitals have relied on international supplied, especially those in Asia. Yet, most of the available supplies are required to be sold in large quantities or sell at an inflated price. Due to limited budgets, small healthcare institutions don't have the resource to outbid larger counterparts for medical materials.


Individuals

Pandemic risks facing common people can be divided into two categories: health related and non-health related

Health related risks include not only the presence of physical health and mental health problems caused by the pandemic, but also related medical costs. Infected individuals are burdened by many issues, such as paying for huge medical expenditures and lose a portion of their income due to hospital bills. Usually, physical health risks usually differ in different age groups of the population. For example, for Covid-19, older adults are at a higher risk for developing more serious symptoms.

The growing public fear of the Covid-19 pandemic generates many mental health problems , such as depression and suicide. The suicide rate is on the rise in certain areas of the United States due to development of mental health caused by social isolation and fear of the pandemic.

The non-health-related risks vary from person to person, but they are all related to financial loss. These include risks such as loss of income due to pandemic-related unemployment and excess expenses from inflated costs of necessary supplies.


What is Risk Management?

The concept of risk management began as a means of analyzing and minimizing potential financial shortcomings. In general, the practice of risk management attempts to predict elements that have a potential to go awry and plan ahead to lessen levels of uncertainty. In recent years a risk analysis plan has become an important piece of success in countless sectors.

In a broad sense, risk management can be broken down into five steps:

  • Identify the risk
  • Analyze the risk
  • Evaluate or rank the risk
  • Treat the list
  • Monitor and review the risk
Examples of Risk Management Strategies in Practice

Still, the risk management process is highly variable to industry. For example, governments may use risk management strategies to handle issues related to domestic and international defense.

In the insurance industry, risk management is primarily used to assess and quantify the likelihood of events. An example of a potential current misstep in risk management strategizing can be seen through the extreme amount of unemployment uninsurance claims. Although the amount of claims are fairly unprecedented, a more successful plan would have accounted for the potential of surges to this degree.

Small businesses are beginning to implement risk analysis plans; an example of this is improving the security of a local business by installing security cameras around the premises to reduce potential crime.

Even on an individual level, risk management is an important tool. One way many people engage in risk management is by budgeting their expenses on a monthly basis, saving some money each month in case of an emergency.

Risk Management and Strategies Related to Pandemics

We are currently living in a crucial time for risk management strategy development. The inevitable truth when dealing with a pandemic is that risk is a certainty. Some of the most urgent risks facing the United States in the midst of the COVID-19 pandemic aside from the obvious medical ramifications are:

  • A halted economy
  • Supply chain backup
  • Mass unemployment
  • Hiring freezes
  • Shortage of medical resources
  • Decreased labor force participation
  • Decrease in GDP
  • Growing public fear

These truly only scratch at the surface of the potential risks associated with a pandemic. Proper contingency planning paired with a coherent strategy for resource allocation can greatly manage the severity of some of these risks.

contingency planning is heavily tied to risk management. A contingency plan is essentially a calculated response to the appearance of risk. Ideally, a contingency plan will help to control the risk that was accounted for. On the same note, strategies of risk management help to guide resource allocation by providing a framework for situations where supplies are not constant.

Our Mission Through a Risk Analysis Mindset

The CovidPlan team aims to provide insights for public health professionals and ultimately guide decision makers in their process of developing a successful contingency plan through dynamic modeling of resource allocation as the pandemic continues.


Regional Parameters

Compartment Initial Conditions

Mild Infected Cases

Severe Infected Cases

ICU Cases


Economic Cost of Surplus/Shortage

Regional Adjustment Cost

Perishable Resources Demand

Compartment Initial Conditions

Mild Infected Cases

Severe Infected Cases

ICU Cases


Economic Cost of Surplus/Shortage

Regional Adjustment Cost

Perishable Resources Demand

Shared Parameters

Total Durable Resources

Total Perishable Resources


What is Contingency Planning?

A contingency plan is a plan devised for an outcome other than in the usual (expected) plan. The contingency plan protects resources, minimizes customer inconvenience and identifies key staff, assigning specific responsibilities in the context of the recovery.

The main purpose of pandemic contingency planning to address potential uncertainties as a result of unexpected pandemic outbreak such as COVID-19. Many industries and organizations responded quickly in the early stage of the pandemic owing to their well-thought and adequate contingency plans.

Why is Contingency Planning Important?

Repeated history of epidemics has shown that pandemic risk is inevitable. Contingency plans help us prepare for the eventuality of pandemics. Due to the lack of preparation and planning, the three human influenzas pandemics occurred in the 20th century, causing illnesses over 30 percent of the population. Many businesses nowadays still don't have a developed contingency plan for a pandemic. Based on a study by JP Morgan Chase Institute, companies with fewer than 500 employees have less than a month of cash reserves on average. Moreover, the likelihood for a pandemic to result in a high rate of absenteeism, disruption to supply chains, disruption to business travel could create a devastating impact on companies. Therefore, it is crucial for companies and markets to have a contingency plan to prepare for pandemics.

How Do We Plan for Contingency?

Contingency planning exists in both healthcare and non-healthcare sectors. The Center for Disease Control and Protection (CDC) provides detailed checklists for organizations in different sectors.


Companies

Companies and businesses create contingency planning by assessing the impact on the business, and come up with concrete plans for employers and customers. CDC has created a checklist for business industries in case pandemic happens.

  • Plan for the impact of a pandemic on your business

  • Plan for the impact of a pandemic on your employees and customers

  • Establish policies to be implemented during a pandemic

  • Allocate resources to protect your employees and customers during a pandemic

  • Communicate to and educate your employees

  • Coordinate with external organizations and help your community


Education

Universities and other educational institutions set up contingency planning with the priority of students and faculties' safety, measures like moving classes remotely would be taken into place. CDC also created a checklist for educational institutions to prepare for pandemic flu. The checklist for educational institutions including following:

  • Promote the daily practices for everyday preventative actions at all time

  • Provide flu-preventions supplies in the school

  • Plan for staff and students' absences and keep track of the flu-related absences

  • Plan ways to increase space or limit face to face interactions between people

  • Develop a risk-management process for your school


Markets

Markets also set up contingency plans for emergent situations. However, industries like airline, cruise operations, hotels and other travel related business are vulnerable to such a significant financial impact. CDC has created a guideline in general to help markets overcome their business and sustain their operations. The checklist for educational institutions including following:

  • Identify any specific regulatory requirements related to contingency planning

  • Conduct a business impact analysis (BIA) to identify and prioritize critical system, business processes, and components

  • Identify and implement preventative controls and measures to reduce the effects of disruptions, increase availability, and reduce contingency costs

  • Develop contingency plans containing detailed guidance and procedures to recover from disruptions

How Does the Government Prepare for a Pandemic?

The Federal Government will collaborate fully with international partners to attempt containment of a potential pandemic wherever sustained and efficient human-to-human transmission is documented, and will make every reasonable effort to delay the introduction of a pandemic virus to the United States. If these efforts fail, responding effectively to an uncontained pandemic domestically will require the full participation of all levels of government and all segments of society. Government goals during pandemic are:

  1. Try best to stop, slow or limit the spread of pandemic to the United States

  2. Limit the domestic spread of a pandemic, and mitigate disease, suffering and death

  3. Sustain infrastructure and mitigate impact to the economy and the functioning of society


What is the National Response Plan (NRP)?

The National Response Plan (NRP) serves as a guideline, which defines the Federal responsibilities for sector-specific responses, and provides the structure and mechanisms for efficient coordination among Federal, State, local, and tribal authorities, the private sector, and non-governmental organizations (NGOs). It provides the primary mechanism for coordination of the Federal Government's response to Incidents of National Significance, and will guide the Federal pandemic response.

Healthcare contingency plans contains three steps: identify resources needed, demand forecast, and develop a centralized stockpiling strategy. Resources could categorize to Therapeutic resources, Preventative resources, and Diagnostic resources, and based on the demand forecast model, develop a stockpiling strategy by using the Stockpiling calculator.


Current Practices

The Strategic National Stockpile (SNS) is a repository of antibiotics, life-support medications, IV administration, airway maintenance supplies, and medical/surgical items. It is designated to support healthcare systems with any public health threat. The role of SNS is to supplement medical or protection supplies during public health emergencies. It serves as a buffer when there is a shortage of medical equipment like ventilators during pandemics like COVID-19. The SNS serves as a repository, which located throughout the United States that houses a vast inventory of antibiotics, antitoxins, antiviral drugs, vaccines, medical supplies and materials in various secrete locations. Federal agencies like HHS/ASPR will evaluate the demand and requests, current situation, and determine a prompt course of actions to release those assets that are most appropriate. The SNS's 12 Hour Push package which is less than 5% of the SNS inventory could be delivered within 12 hours of a federal decision to deploy. According to Public Health Emergency website, the following items are shipped during COVID-19 for emergency use:

  1. 12,339 tons of cargo shipped to support U.S. repatriation efforts and state PPE needs

  2. 468 flights transporting supplies

  3. 2,957 trucks transporting supplies

  4. Assigned more than 175 staffers to serve in the stockpile's operation center

  5. Engaged more than 100 private industry partners for medical supply chain and delivery

  6. Deployed SNS liaisons to the Department of Health and Human Services (HHS) Secretary's Operations Center in Washington, D.C.

What is a Centralized Stockpiling Strategy?

A centralized stockpiling strategy is intended to provide a stopgap measure to meet the surge in resources demand at the early stage of the pandemic. A practical stockpiling strategy is often based on an act of balance between adequate supply and economic cost. During a pandemic outbreak, the central authority will have to base on the prediction to allocate resources across various subsidiaries. More information about resource allocation could be found here.

Stockpiling Calculator

This calculator is designed to calculate and predict the amount of demand and to determine the size of optimal stockpiling.


Introduction to Resource Allocation

One of the most important contingency plans in the pandemic risk management cycle is resource allocation .When there is a severe research shortage, like the one experienced during COVID-19, a coordinated effort to obtain supplies and manage existing resources becomes essential. Not all states experience an equal surge in demand at the same time. Therefore it can be argued that the federal government should track the current use of resources and project the need of resources in all states to coordinate the allocation of resources. In doing this, the state can avoid both shortage and surplus. Resources that need to be distributed during a pandemic include perishable and durable resources. Examples of perishable resources include PPE, testing kits, and IV fluids. Examples of durable resources include hospital beds, ICU beds, and ventilators. There are many reasons that resources would need to be actively monitored and allocated in the midst of a pandemic.

Supply and Demand

The increase of total system supply may not keep up with the surge in demand over a short period of time. When the demand far exceeds the available system wide supply, the system can experience a spatial competition of resources.


Expense

It is expensive to stock up regional inventories to meet the demand over a short period of time, due to transportation, disruption to supply chains, etc. One may have to take a cost-benefit analysis to assess its stockpiling strategy.


Difference in Shelf Life

Medical resources have different shelf life. Many sterile medical devices have short expiration dates. Disposable devices are typically intended for use on a single patient on a single procedure. On the other hand, durable medical resources such as hospital beds and ventilators last a while.


Future Anticipated Demand

Central authority may anticipate a surge in demand at a later time and need to reserve a portion of newly acquired supplies/ raw material for future distribution or production. Temporal competition of resources.

There are two sects of resource allocation : macro level resources pooling and micro level rationing. Macro level resource pooling describes resource allocation at the macroeconomic level. In macro level resource pooling, a central authority acts in the best interest of a union of many regions to increase supply as well as coordinate the distribution of existing and additional resources among different regional healthcare providers. Micro level rationing describes resource allocation at the microeconomic level. In micro level rationing, individual hospitals have to make difficult but necessary decisions to ration limited existing resources as well as new supplies.


While in both cases the aim of allocation is to deliver limited resources to where they are most needed, the macro level pooling addresses more of the spatio-temporal differences and the micro level rationing addresses more of the healthcare effectiveness and justice. The setting of standards, protocols, and policies can have a profound impact on the functioning of a healthcare system at the time of a crisis. Therefore, the best practice of resource allocation should be based on scientific assessment and evaluation rather than in the moment decisions. To put it more simply, resource allocation must follow a set of rules.

Holistic Approach

The holistic approach aims to take into account many different facets of hospitals and patients in order to decide where the resources are best put to use. It seeks to strike a balance among different objectives for various stakeholders.


Optimization Objectives

The optimization approach aims to follow a set of conditions that optimize the way that resources are distributed. There are many different ways optimization conditions can be formed.

  • Minimization of Shortage and Oversupply

    One optimization condition seeks to minimize shortage and oversupply. Authorities must allocate more resources to epicenters of a pandemic than other regions under less immediate threat.

  • Promoting and Rewarding instrumental Value

    This optimization condition details that critical preventive gears and medical care be provided first to healthcare workers in the front line and employees in essential businesses and critical infrastructures. The society bears heavy economic cost when these workers fall ill and are unable to return to work.

  • Prioritizing the Worst Off

    This optimization condition details that access to critical medical treatment should be reserved for patients facing life-threatening conditions, when there is an insufficient supply of equipment such as ventilators.

  • Maximization of Benefit from Treatment

    This optimization condition details that individuals with the best chance of survival should be given treatment before individuals with the least chance of survival. Following this logic, access to ventilator treatment should be prioritized to patients with the highest chance of survival, patients who are younger and can benefit the most from treatment.

GetusPPE.org Statistics

The statistics from GetusPPE.org showed a lot of resource shortages. For example, 22% of institutions surveyed reported that they had no N95 respirators remaining. Additionally, 36% of institutions surveyed had no face shields remaining. A quote from an institution surveyed by GetusPPE.org emphasizes the severity of the situation saying, "We are out of everything. Providers using one mask for 3+ weeks. Many COVID patients. Zero gowns. Great need. Large academic hospital."


Peru Oxygen Shortage

There is a shortage of oxygen in Peru, where coronavirus is hitting hard. Oxygen is one of the main tools keeping patients alive. As a response to the shortage of oxygen, black markets have emerged which has led to immense price gouging. Before the price gouging, one cylinder of oxygen cost $353, but now on the black market it costs as much as $1,470. Many people are dying because they are unable to find or afford oxygen. A quote from someone in Peru in desperate need of oxygen exemplifies the severity of the situation in Peru saying, "I feel helpless, angry, and furious, I feel like my hands are tied. My father is sick and we can't afford something that is so essential for him to survive." In addition to the oxygen shortage, Peru faces an extreme lack of hospital beds having less than two hospital beds per 1000 people.


Regional Parameters

Compartment Initial Conditions

Mild Infected Cases

Severe Infected Cases

ICU Cases


Economic Cost of Surplus/Shortage

Regional Adjustment Cost

Perishable Resources Demand

Compartment Initial Conditions

Mild Infected Cases

Severe Infected Cases

ICU Cases


Economic Cost of Surplus/Shortage

Regional Adjustment Cost

Perishable Resources Demand

Shared Parameters

Total Durable Resources

Total Perishable Resources



  • Visit Illinois Risk Lab
  • About This Project

    The research project aims to develop new quantitative framework and tools for public health decision makers and risk management professionals to assess COVID-19 pandemic risk and develop contingency and response plans.

    The work represents a collaborative effort by researchers from the University of Illinois at Urbana-Champaign (United States) and Nankai University (China). This website is maintained and regularly updated by Illinois Risk Lab. Model details and instructions can be found in "Pandemic risk management: resources contingency planning and allocation" by Chen et al. (2020) [Download] .


    Faculty Members

    Project Manager

    IRisk Lab Associates

    Han Bai

    Actuarial Science, Chemistry, Statistics

    Ajay Dugar

    Econometrics & Quantitative Economics, Mechanical Engineering, Statistics

    Akshay Dugar

    Engineering Mechanics, Mathematics, Statistics

    Cameron Groch

    Actuarial Science

    QingXuan Kong

    Statistics

    Xuan Lin

    Statistics, Economics

    Ben Lipka

    Statistics

    Jingying Luo

    Actuarial Science, Statistics

    Sihan Meng

    Actuarial Science, Economics

    Pasqua Ruggiero

    Statistics

    Charan Sankaran

    Computer Science, Statistics

    Erchi Wang

    Statistics

    Yanbing Yi

    Geographic Information Science, Statistics

    Jasmine Yi

    Econometrics, Statistics

    Yi Yuan

    Actuarial Science, Statistics

    Yuqi Zhang

    Statistics

    Annie Zheng

    Statistics


    Contact Us

    We are open to professional partnership and sponsorship for this project, which provides invaluable experiential learning opportunity for student associates of Illinois Risk Lab. If you are interested in collaboration, please contact us using the form below.