Paying Our Way to Herd Immunity
by robert litan
robert litan is a non-resident senior fellow at the Brookings Institution, where he formerly directed the institution’s Economic Studies Program. This piece expands on commentary originally published by the Brookings Institution.
Published September 3, 2020
As divided as the country is, we surely agree on one thing: in light of the immense suffering caused by the Covid-19 pandemic, we are becoming desperate to get our economy — and our lives — back. That includes going to restaurants that have somehow survived, shopping in brick-and-mortar stores, attending sports events and traveling freely without fear of catching the virus. We’ve been told by leaders of both political parties that approval of one or more vaccines will accomplish all that. It’s surely one reason President Trump keeps promising that a vaccine will be available by the end of the year and maybe, maybe, maybe even approved by the Food and Drug Administration for health care and possibly other “essential workers” before the November election.
But public health experts are beginning to worry that with the politicization of everything known about the virus — its lethality, the benefits of testing, wearing masks and social distancing, and lately, about the due diligence of the FDA itself — many people will just say no to at least the initial version of vaccine once it arrives. A Gallup poll in mid-August indicated that as many as 35 percent of Americans won’t accept vaccination. And a poll from early September conducted by WebMd was grimmer. It found that almost half of Americans wouldn’t take the shot — although that figure was down from almost 60 percent in July.
Some may ask, why worry? As long as those who want the vaccine can get it, who cares whether others go along? The answer is that if you want our economy and society to go back to some semblance of pre-pandemic normal, we must achieve herd immunity. This means giving a high enough percentage of people immunity through the vaccine that Covid-19 will lack sufficient hosts to keep replicating rapidly and eventually will die out.
Planning by the Numbers
According to one of the nation’s leading infectious disease specialists, Dr. Michael Osterholm of the University of Minnesota, herd immunity will likely be reached when 60 percent of the population is immune. But no vaccine is perfect; far from it. The seasonal flu vaccine is, at best, about 50 percent effective. And the FDA has said it won’t approve a Covid-19 vaccine that doesn’t do better. This implies that more than 60 percent of Americans accept the vaccine for us to all to benefit from herd immunity.
How much more? Suppose, optimistically, that one or more approved vaccines is judged 75 percent effective. At that level, 80 percent of the population must be vaccinated to reach Osterholm’s 60 percent immunity. A few scientists are more optimistic about the herd immunity threshold, thinking it could be as low as 50 percent, which would reduce the required vaccination rate. But then, the vaccine could also prove to be less than 75 percent effective in the field. In that event, more than 80 percent of the population would need to be vaccinated in order to reach herd immunity.
But if the recent polls are right that only two-thirds of Americans (or fewer) will agree to the shot, how will we ever reach an 80 percent target? Even with a vaccine blessed by the wider medical community as well as the FDA and Dr. Anthony Fauci (the director of the National Institute of Allergy and Infectious Diseases) — minimum conditions, I believe, given the suspicion that the FDA is hurrying its approval in time for the election — there is an uncomfortably high risk that the best public education campaign in the world won’t get us where we need to go.
In the current political climate, forcing people to accept even a truly safe and effective vaccine as the price of moving freely in public is out of the question. If mask mandates draw the fury of freedom-worshiping Americans, imagine the resistance to a painful poke in the arm that fills your body with alien chemicals.
What’s left? Well, those of you who know my training can probably guess: economic incentives. Yes, paying people to take the vaccine (one shot and perhaps a booster). No one knows in advance what cash reward it would take to convince people otherwise opposed to or fearful of taking a well-validated vaccine. But my best guess is that $1,000 a person in an economy with tens of millions wondering when they’ll be evicted is a reasonable figure. For a family of four, that means $4,000, which is a lot of money but peanuts compared to the tangible and intangible gains from eliminating Covid-19 from our midst.
In any event, I am not proposing to pay everyone the full $1,000 upfront. To ensure that a specific target — such as 80 percent vaccination coverage or an observed reinfection rate below 1.0 — is reached, the payment should be split. I would start with a modest initial payment, say $200, followed up by the $800 balance when that national target is hit. That way, people will have strong incentives to encourage their friends, coworkers, fellow congregants and social media “friends” and “followers” to take the vaccine too, so that all can collect the full $1,000.
Even with a vaccine blessed by the wider medical community as well as the FDA and Dr. Anthony Fauci, there is an uncomfortably high risk that the best public education campaign in the world won’t get us where we need to go. We should pay people to take it.
To be sure, most people who will get the money would want to be vaccinated anyhow, and so paying them is a waste seen in narrow terms. But that’s the price of managing our political division: those willing to take the vaccine will not realize its full benefits — an economy and society back to normal — unless those who are now reluctant are induced to change their minds.
It wouldn’t be cheap — about $265 billion. But compared to the trillions spent so far to cushion the economic pain of the pandemic and the billions’ worth of output that will be lost every day until the economy fully recovers, the $265 billion price tag would be a bargain.
Starting with a lower sum than $1,000 and only raising it if that amount proves inadequate to lure the reluctant would be big mistake. If people anticipate they can get more by waiting for a higher payment, then large numbers will have incentives to wait until the payments in fact are increased.
Since I initially proposed this idea in a Brookings Institution essay, readers have offered two observations I think are worth discussing. One is that it would be much less expensive to accept whatever level of population immunity that voluntary vaccination achieves and then wait for researchers to discover much more effective therapeutics than exist now so that the public is less fearful of catching the virus.
But if these hypothetical improved remedies must be administered in lengthy hospital stays, a large portion of the public will still be afraid to resume normal life — and for good reason. These fears will only abate when the disease can be conquered by taking a pill. In the meantime, waiting for the magic bullet seems a dicey proposition. And during the wait, the human and economic costs would continue to mount.
Second, some commenters have suggested that people and businesses may simply decide to adapt to whatever residual risk the virus may pose in a population that hasn’t reached full herd immunity. After all, we live with all kinds of risks to our health every day — crossing streets and driving cars, not to mention enduring the chance of catching seasonal flu. Why not, then, live with the risk of Covid-19 infections, which will be a smaller risk if, say, only half the population is vaccinated?
I admit we may end up on this path of least resistance, but it would be far from satisfactory. The virus would still be around, and local spikes could be expected as a matter of routine. We are getting better at dealing with spikes — the mortality rate from infection has dropped and will presumably drop more once a vaccine is available. But we should honest: making an awkward peace with the virus would permanently change the way many of us go about our lives.
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The polls could be wrong. Perhaps enough people will be motivated by a combination of fear and social conscience to be vaccinated, so that we’ll get to herd immunity without having to pay the skeptics to do the right thing. I would sleep better, however, knowing that our political leaders are at least considering a Plan B other than “it is what it is.” And surely a metaphorical spoonful of sugar would beat negative emergency incentives like, say, denying non-vaxxers access to planes, movie theaters, restaurants and stores.