Coronavirus And The Law Of Diminishing Returns

Ph.D. in Economics at the University of Chicago. Rector of the University of CEMA. Member of the National Academy of Education. Academic Counselor for Libertad y Progreso.

EL ECONOMISTA – On September 11, the part of the Ministry of Health of the Nation showed a new worrying data: the number of patients in intensive care for the coronavirus climbed to 3,093 and, thus, Argentina reached the sad record of being the nation with the most critically ill patients in the world by number of inhabitants

This does not necessarily mean that hospitals are saturated or on the verge of collapse. In this regard, during said daily report, Alejandro Collia, Undersecretary of Management of Services and Institutes, recalled that since the beginning of the health emergency “the National Government managed to strengthen the health system with the duplication of intensive care beds, in operation of hospitals in the suburbs and of 12 modular hospitals ”.

However, as any first-year economics student knows, the health situation is much more critical than it appears, even assuming that Collia’s claims fully reflect reality. On the positive side, we still have time to avoid a health catastrophe.

Let’s see the facts. On September 1, the Argentine Society of Intensive Care (SATI) published a letter to the Argentine society, of which it will be useful for me to share a couple of paragraphs.

It points out that although, given the very high level of occupation, “physical and technological resources such as beds with respirators and monitors are increasingly scarce, the main issue, however, is the shortage of intensive care workers , which, unlike beds and respirators, cannot multiply ”. He adds: “The intensivists, who were already few before the pandemic, today are at the limit of our strength, thinned by the disease, exhausted by continuous and intense work, treating more and more patients. These issues deteriorate the quality of care that we routinely provide. We also have to mourn casualties, infected personnel and unfortunately, deceased, fallen colleagues and friends who hurt us, who tear us so deeply.

What better application of the law of diminishing returns, associated with the name of David Ricardo. What does it consist of? Imagine, for example, a restaurant that becomes fashionable and in front of the greater influx of diners chooses to hire new waiters. Although at the beginning this strategy will increase the profit, given the greater speed of the service, as the number of waiters increases, this increase will begin to decrease, reaching at some point it is not advisable to continue hiring more waiters, unless a neighboring premises is rented , to expand the surface of the restaurant.

In general terms, in a production process, adding more than one factor of production while keeping the rest of the factors constant will, sooner or later, generate progressively smaller increases in production, and may even turn negative.

But what does it have to do with the coronavirus? Much. Six months have passed since the start of the pandemic and, as Collia points out, the Government has concentrated its efforts on providing a greater number of beds for intensive therapies, more respirators, etc., but the effective number of therapists not only It has not grown proportionally, but has probably decreased by virtue of contagions, exhaustion and the unimaginable work stress to which they are being subjected.

The worst case scenario. I dare to affirm that, if nothing is done to change this reality, every first-year student should affirm without a doubt that the probability of death of a patient entering intensive care is increasing, if we keep any other factor of analysis.

What to do to avoid it? To begin to recognize that, beyond their vocation, doctors also eat. If not, let’s look at another paragraph of that letter: “We finished a shift in an Intensive Care Unit and hurried off for another job. We need to work in more than one place to make ends meet. For hours and hours of stressful, exhausting work, despite being highly qualified and trained professionals, we earn incredibly low salaries, which leave those who listen to our salary astonished ”.

We need to support medical therapists and, for this, the market economy teaches us that applauding them on the balconies is not enough. We must pay them! Simple truth? If we don’t do it out of shame, let’s do it out of fear. We are facing a health catastrophe that will not be avoided by epidemiologists from their desks but by therapists from the trenches.

The Government could, for example, retroactively double from April the salary of medical therapists and support personnel in all public hospitals and pay the difference in salaries in private centers. This, beyond giving new strength to those who are risking their lives for us, would attract clinical doctors to train as therapists in intensive programs that could be carried out in teaching hospitals or any other appropriate institution for it. Nothing is free, there are always multiple purposes and of different importance, it is the role of a government to discriminate against them.

If this strategy had been followed last March, the reality in therapies would be different today, but we have time to correct it. The longest path begins with the first step, let’s not waste another day.

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