Special Alert:
The Preliminary Implications of SARS

By Peter Lytle

The epidemic of Severe Acute Respiratory Syndrome has barely touched upon U.S. soil. This briefing by an expert in the public health and economic consequences of infectious diseases clearly outlines the facts and the possibilities.

As the First World War came to an end, global travel became more common, and with that travel came the first global pandemic. By the end of the influenza pandemic, over 20 million people lay dead. Since that time, we have experienced a new biological threat from Mother Nature every six to 10 years. Some are as dangerous as the 1919 influenza, some with the potential to do as much damage. AIDS, Hanta virus, avian flu, West Nile, Ebola, Indian plague, and Legionnaires disease are among the varied bacterial and viral infections.

Severe Acute Respiratory Syndrome or SARS has not received as much attention in the U.S. media that it has in other countries perhaps due to the war. Perhaps because we are all complacent, thinking the ability to manage these diseases is commonplace. SARS has not yet been proven to be a mega disease, but it may be on the verge of becoming one. If SARS were to go unchecked in the world and mimic the problems created in China, Hong Kong or Toronto, we could see a significant impact on our economic marketplace and health care system.

What is SARS?

SARS is a respiratory illness believed to be caused by the corona virus. In some cases, it is being referred to as Atypical Pneumonia because of its close resemblance to pneumonia. The criteria for SARS are: temperature of 100.5 degrees or more, one or more clinical findings of respiratory illness (i.e. cough, shortness of breath, difficulty breathing, hypoxia, or radiographic findings of either pneumonia or acute respiratory distress syndrome), travel to an area with documented or suspected community transmission of SARS, and/or close contact within 10 days of onset of symptoms with either a person with a respiratory illness who traveled to a SARS area or a person known to be a suspect SARS case. In a limited number of cases individuals also had diarrhea.

What is the origin of SARS?

A small group of scientists believes that SARS may have come from farm animals. Bi Shengli, of the Chinese Center for Disease Control and Prevention in Beijing, stated that the earliest victims in Guangdong were chefs or bird vendors in contact with chickens, ducks, pigeons and owls. This theory is yet to be proven. The current theory is that SARS is a new corona virus; similar to the family of corona virus that causes the common cold and mild to moderate upper-respiratory illness in humans. When viewed under a microscope, they have a halo or crown-like appearance. Some researchers think this strain of corona virus identified may also be similar to a virus that is far more serious and found in animals where it is associated with respiratory, gastrointestinal, liver and neurological disease, but recent genetic testing has not identified this as the case. In several cases of SARS, metapneumovirus has been isolated; the role in the pathogenesis in SARS remains unclear. Scientists recently sequenced the corona virus found in numerous SARS patients and believe it is new. One of the concerning things about this virus is its ability to mutate rapidly. As one scientist states, "this is a virus looking for the perfect host or transmission vehicle." The corona virus identified is currently considered the primary cause of SARS, according to a briefing by the World Health Organization on April 17, 2003. Other potential viruses may still be identified that may interact with the disease as it progresses.

SARS is believed to have originated in or around the Guangdong province of China in November of 2002 or before. From there it spread to a single hotel in Hong Kong, called the Metropole, then certain hospital clusters involving seriously ill patients. Guests on three floors of the Metropole Hotel were exposed. International travelers from these floors spread the disease to another five countries; the disease is now in 26 countries. In February of 2003 it appeared in North America for the first time.

What is the incubation period for SARS?

Typically it is two through 10 days. The illness begins generally with an onset of fever of 100.4º or more. The fever is often associated with chills and/or rigors and might be accompanied by other symptoms including headache, malaise and myalgia. After three to seven days, a lower-respiratory phase begins with the onset of a dry, nonproductive cough or difficulty breathing. In 10 to 20 percent of cases the respiratory illness is severe enough to require intubation and mechanical support.

What is the mortality rate?

This is an extremely aggressive disease. In countries where it was originally established, one in 20 are believed to be dying. The CDC estimates the mortality rate at about 3.5 percent, which is similar to other respiratory diseases. Other organizations such as Health Canada have placed the death rate at 4 percent. It is too early to tell the actual mortality rate, and it will likely be different in each country.

As of this writing (4/21/03), there are 3,861 cases worldwide; there have been 217 deaths and 1,873 recoveries. Two hundred twenty-five suspected cases have been reported in the U.S. in 35 states, with no deaths to date. Case studies before April 5 indicated 94 percent of the individuals had traveled within 10 days before the onset of illness to the areas listed in the CDC SARS case areas. For more information on case areas, please go to www.cdc.gov and access the SARS page.

What is the risk of exposure?

SARS appears to be spread primarily by direct contact with moisture droplets or body fluids expelled by a SARS carrier. The World Health Organization (WHO) believes, however, that other factors may be involved. Several hundred residents of a housing complex in Hong Kong, some of whom are now leaving quarantine and being tracked, may have been infected with SARS even though they did not have direct contact with a SARS carrier. Research into transmission by cockroaches is being conducted in connection with this location. Thirteen labs around the world are currently researching SARS, how it is transmitted and related questions.

It is also becoming evident, according to the CDC and other health organizations, that some individuals may be more infectious than others. An April 4 teleconference by the CDC and WHO referred to the possibility of super carriers (individuals who are able to spread the disease greater than others).

According to Julie Louise Gerberding, MD, MPH, of the CDC, in one hospital in Hanoi, 56 percent of the health care workers who came in contact with a SARS patient came down with the disease. In Toronto, where the disease has had a significant impact on hospitals and health care, 180 paramedics have been quarantined in their homes, three were hospitalized with symptoms after potential exposure to SARS infected individuals.

There appears to be a dramatic difference in the mortality of the disease depending on when it is detected. The U.S. has experienced no deaths and a number of recoveries based on aggressive disease management, while China has experienced 1,457 reported cases and 65 deaths as of April 16. Actual numbers will turn out to be much higher. It appears that the government of China has underreported suspected case of SARS to prevent panic and economic damage to their industrial sector.

Gerberding of the CDC believes this is a significant and serious threat to world health and one that needs immediate and vigilant attention. "We recognize this as an epidemic that's evolving differently." In transcripts from the CDC, Gerberding and James Hughes, MD, of the National Center for Infectious Diseases, have stated their concern about SARS. "The potential for infecting large numbers of people is very great." The WHO said outbreaks in most parts of the world are currently under control but still spreading in China and Hong Kong. Other health organizations remain highly cautious and suggest this virus could still break away.

At the present time, many individuals who have been exposed to SARS have recovered or are in recovery. Early medical attention is critical. If you believe you have SARS you should contact local health authorities immediately and try to limit contact with other individuals if possible until you have been instructed on the best course of action.

Does the corona virus live outside of the human body?

The virus appears to live about three hours outside the human body. Similar viruses have the capacity to live from one hour to six days outside the body. There are some very limited concerns that if dried, it may become airborne and still remain potent or may be hosted by animals or in sewage or related environments. Research on other transmission methods is ongoing. Most research to this date indicates a human host is still the primary method for transmission and the virus does not live well outside of a host. A great deal of attention is being given to "Airport transmission." Air passengers may be at some risk. Airplanes do filter air, and only passengers in close contact to a SARS carriers or having touched perhaps a lavatory item etc., are believed to be at significant risk. The question is still being studied, however, and the answers may be months away. The point at which a SARS carrier is infectious and can pass the disease on is still under debate.

Are there any tests developed to detect SARS?

SARS identification testing is under development. Currently a PCR test is being evaluated. James Hughes, MD, has noted two CDC tests that look promising: one is an indirect fluorescent antibody test and the other is an Allose test. Both tests require the disease to have some time to establish itself in the human body.

Is there any known treatment for SARS?

At this time there is no known treatment for SARS; anti-viral drugs, antibiotics and steroids alone have not responded well. An article in the Financial Times on April 2, 2003 indicated that Hong Kong government health officials indicated some success with a treatment of cocktails of anti-viral drugs and steroids to modulate the extreme response by the patient's immune system. Ahang Wenkang, health minister for China, believes they have found a combination of Western and Chinese medicine that works but no details are provided. There are vaccines used in animals to manage corona virus so there may be an opportunity to expand this into human subjects in the future. No specific drugs to date including Ribavirin have demonstrated effectiveness in control of the disease. Mechanical ventilators are being used with acute patients. One concern facing many countries including the U.S. is the lack of this equipment in the event of a major outbreak of SARS. It is estimated that the U.S. has fewer than 20,000 of these units available and during the peak of the flu season most are in use; the question remains which patients would get the access to this equipment. With the genetic code now available for the SARS corona virus a vaccine can be developed. This is a process that can take years, however, and there is a lack of production capabilities for vaccines in the U.S. at the present time.

Prevention of the disease is based on keeping away from direct contact with potentially infected individuals. Recommendations are to practice basic hygiene, wash your hands frequently, and avoid areas where the disease is spreading. The use of surgical masks is having limited impact unless the mask is worn by an infected individual to reduce the droplets spread by the nose or mouth. Masks that are sealed and rated N-95, used in conjunction with eye protection and rubber gloves are suggested for individuals in close contact with infected individuals. N-95 masks are currently on back order many months by producers and may not be available should a large outbreak occur in the U.S. or Europe. Most masks have a limited period of value (24 hours or less) once used. Improper use of the mask may also not prevent the disease from coming in contact with the mouth or nose. It is believed that a variety of disinfectants are successful at destroying the virus; chlorine-based disinfectants are listed in a number of health organizations' information articles. There is, however, no disinfectant that is currently registered or approved for SARS by any government organization at this time.

Should I travel overseas?

The CDC and WHO have travel advisories out for much of Asia. (Click here to check the CDC website). Toronto is also being noted as a travel caution area. In short, if you don't need to travel at this time, don't. Video conferencing is up for Asia by 50 percent. According to the Center for Infectious Disease Research and Policy, individuals who are in the U.S. and have not traveled to an infected area have very little risk of becoming infected with SARS. This suggests that staying home may mean staying safe. In some areas of the U.S., Asians and their businesses are being avoided. There is no indication that Asians in the U.S. are any more likely to have SARS than anyone who has traveled anywhere would. In fact, the Asian community may have a higher awareness of the disease than other cultural groups.

Travel advisories are currently recommending restricted travel to: China (especially the Guangdong province), Vietnam (primarily Hanoi), Singapore, Hong Kong, Taiwan and Shanix, and some organizations have placed a watch on Toronto, Canada. If a traveler acquires SARS in some of these countries they may not be admitted to hospitals but instead be directed to isolation clinics, if they exist. Do not expect to find housing in hotels during the course of the disease. Most airlines will not allow a SARS patient's reservations until the disease is proven to be gone and the patient fully recovered. Some countries are no longer allowing air passengers from case countries to disembark, and it is possible that a traveler could find himself or herself stranded for weeks or months if caught in an epidemic location.

Depending on the time line for this disease (three to 10 years), the original countries where the disease has run its course may become safer to visit or do business in than countries where the disease has yet to penetrate 70 percent of the population, assuming a vaccine has not been found. This is called the Jack-in-the-box theory. After an outbreak of food poisoning at Jack-in-the-Box, the fast food chain cleaned up its act and became one of America's safest eating establishments.

Could SARS be similar to other respiratory or flu-like diseases?

Nobody knows. In the 1998-99 flu season there were, according to the CDC, 20,000 flu associated deaths nationwide with 80 million doses of vaccine given to the public. The vaccine was between 70 and 80 percent effective in preventing the flu among healthy adults. This could suggest that a similar disease, for which no vaccine exists, could have a devastating effect on any population that is not prepared. If SARS turns out to be an airborne disease, it will likely be considered more aggressive and could mimic the flu. Direct-contact diseases tend to spread slower, allowing for health controls. The use of quarantine procedures may help control SARS. Most countries are utilizing this technique with SARS suspects but have not used it with the flu, suggesting a lower risk rate for healthy individuals in developed countries.

Economic impact of SARS

SARS currently has the greatest economic impact on Asian countries and businesses closely related to those countries. Among the industries currently being affected: Airlines, Asian and some Canadian (Toronto) convention and tourist business and local retail business, travel-related business and production of materials in China. By example, when Qantas Airlines issued the region's first pneumonia-related profit warning two weeks ago, Merrill Lynch cut their estimates on earning by 19 percent. Cathay Pacific, which is based in Hong Kong, saw its shares drop by 18 percent and Singapore Airlines dropped by 14 percent as a result of SARS concerns by investors. KLM, the Dutch Airline, said that it feared the rapid spread of SARS was having a greater impact on the airline industry than the war in Iraq according to a report in the April 3 edition of the Financial Times. As of April 16 some of the biggest Asian airlines said they had travel dropoffs of up to 70 percent on flights to Hong Kong. Goldman Sachs analyst Noboru Nakajima believes that the disease will be significant in affecting all travel. Concerns by the cruise line industry of a potential SARS outbreak, has also created a major debate on how to manage the problem if it occurs and how to screen customers to reduce the threat.

Hong Kong is not a large producer of material goods anymore. On a global basis, 70 percent of its revenues are generated by services. Services are driven by manpower. SARS is a tremendous threat to any Hong Kong-based business. Already most schools are closed. Parents are staying home and away from restaurants, retail locations, cinema, and entertainment complexes. The HSBC Bank and other banks have shut down locations and canceled meetings and overseas travel. A number of embassies have closed and sent families home. Should SARS reach the U.S. or Europe, as it has in Asia, panic and overreaction will likely follow. With the war coming to an end, CNN, Fox and other news media may look at SARS as the next big news item and set off a similar panic to that created in Hong Kong.

In an effort to contain the damage done to its travel industry, China claims the disease is nearing control. The WHO, on the other hand, has now listed all of China under a travel advisory. Most health organizations believe that China has lost control of the virus. Manufacturing facilities in the Guangdong province are experiencing shortages of employees as non-dormitory workers stay home or are subject to quarantine. Concern by overseas buyers, that production will lag or their customers may reject goods produced in the Guangdong province, is creating a complex series of global discussion on finding supplemental suppliers before the next holiday season. China has become the supplier to the world in a variety of consumer goods and any unchecked spread of SARS in China will impact companies from Nike to Wal-Mart. China with its large electronics industry could also be subject to considerable damage. Wal-Mart has already asked its Asian travelers from case countries to go into a self-quarantine for 10 days before returning to work. Products shipped from China are considered safe due to the time it takes for them to reach U.S. shores and should not be impacted directly according to the WHO. The workers that produce these products and those companies that have offices in China are at the greatest risk according to a recent article in Business Week.

If SARS spreads in the Western countries, the cost of health care could rise significantly. SARS is a very intensive disease to manage because it requires isolation of the patient. The loss of workers for up to 30 to 60 days will also impact the productivity of countries and companies. Retail sales could fall significantly as they have in Hong Kong where it was reported by the Hong Kong Retail Management Association and Financial Times that retail sales are down by 50 percent since the outbreak of SARS with a potential 5 to 10 percent decline in property value estimated by Merrill Lynch.

The Department of Defense is currently supporting the CDC in identification of the virus and means of infection. SARS could have a dire impact on our defense program and the war in Iraq. If troops in Korea became infected, we would see further destabilization of the region. The cost to the government for increased defense spending to make up for infected troops could have a longer-term impact on the recession.

At the present time there is no reason to believe that SARS is related to terrorism, so the positive side is less fear in the population. SARS is too complex and uncontrolled to use as a terrorist weapon. If it did come from a lab it would be more likely to have been the result of a lab accident where the virus was being use to create a vaccine. SARS may have more impact in some countries than others. Companies that purchase items from overseas or are related to the overseas travel industry (primarily Asia) could see longer-term financial issues. Companies in some sectors of the health care industry might see increases in revenue especially if they manufacture products like surgical masks, etc. Grants for funding research into SARS could benefit universities and some pharmaceutical firms. SARS could help Internet commerce. Catalog and delivery companies and digital movies could grow as customers stay away from the crowds.

Companies like Disney could be hurt as consumers stay away from crowds this summer. Travel to Los Angeles and/or Hawaii could be down as visitors shy away from areas where there are large numbers of Asian travelers. If the disease is tracked to certain bird populations, breeders of these birds may be hurt by the additional cost of disinfecting or loss of consumer confidence in purchasing these products due to fear factors. The disease, at this time, is unlikely to have a significant impact outside of China and some Asian countries as long as the WHO is able to maintain the outbreak, but it should be monitored. Companies that are already in difficult shape and somehow related to any key areas mentioned, should be monitored closely as their survival may be directly related to the events of SARS management by world health organizations over the next several years.

Events change quickly with biological diseases. Data is often conflicted. You are advised to watch a site like Center for Infectious Disease Research and Policy ( www.cidrap.umn.edu/ ) or other contacts listed below for frequent updates on this disease.

Peter Lytle is the Managing Partner of the Business Development Group in Minneapolis, Minn. He was formerly the head of one of the country's largest food development and food safety research firms. The Business Development Group provides firms with strategic repositioning and turnaround management services and is focused on issues that may have a predictable impact on their client revenues and profits, such as SARS.

Resource Links:

The Business Development Groupwww.bdgpartners.com/index.html

Center for Disease Control & Preventionwww.cdc.gov/

CDC information on SARSwww.cdc.gov/ncidod/SARS/

World Health Organization www.who.int/en/

Center for Infectious Disease Research & Policywww.cidrap.umn.edu/

Hong Kong Department of Healthwww.info.gov.hk/dh/ap.htm

Singapore Ministry of Healthhttp://app.moh.gov.sg/

Health Canadawww.hc-sc.gc.ca/english/protection/warnings/sars/index.html

Morbidity and Mortality Weekly http://www.cdc.gov/mmwr/

Communicable Disease Surveillance & Responsewww.who.int/csr/en/

Financial Times www.ft.com

Peter Lytle. Special Alert: The Preliminary Implications of SARS.

Business and Health

May 15, 2003;21.