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The problems with testing

22042020_COVID-19 testing

The problems with testing

Since the start of the coronavirus pandemic testing has been touted as the key to containing the spread and re-opening economies. It’s not so simple because testing capabilities are not robust.

Notwithstanding the success several countries, like Singapore, have had containing the virus in its early stages by testing for infection, contact tracing and subsequently isolating positive cases, the same playbook may not be repeatable by other countries, especially the US. The challenges are several-fold: supplies, resources and accuracy. Testing to determine those who have been infected and developed immunity faces similar difficulties.

To begin with it is important to understand that the level of testing is not just determined by the number of test kits available. Each test requires distribution and deployment, often by medical professionals, and the use of reagents to determine the presence of the virus. Each of these is falling short.

With the dramatic spike in demand for testing the essential, specialized “ingredients” – called reagents – have proven to be scarce. Except for South Korea – a country that has tested more of its population than any other – governments do not typically stockpile reagents and production capability is limited. The problem is exacerbated by so many countries clamouring for reagents at the same time.

At the same time the testing infrastructure is apparently under strain. While some tests can produce results in as little as 15 minutes, others need a five-day turnaround. Some are administered at the point-of-care, including drive-through clinics, while others require bulk processing in laboratories. This has seen the level of testing in the US level off at around one million tests a week. That sounds like a lot. Yet experts believe that testing needs to increase to around three million Americans per week to achieve a level of representation adequate to reopen the economy.

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Even if the US reaches an adequate level of testing, there remains uncertainty around its usefulness. Testing in and of itself identifies the emergence of new cases. To be truly effective in managing spread and giving lawmakers and workers comfort to return to work, contact tracing is required. For each new case identified the most recent contacts need to be quickly determined, so they too can be tested. This should be repeated with the contacts of those contacts so that positive cases can be identified quickly and then isolated in order to thwart new outbreaks. Proper tracing requires about five people working for three days on each case, or around 300,000 full-time tracers in the US. The number working on tracing today is well below that.

Perhaps the most important testing to help return workers to their jobs is serology, or antibody, testing. Rather than test for presence of the virus, this testing identifies antibodies in a person’s bloodstream that indicate prior infection and (hopefully) current immunity. The problem so far is that serology tests are not perfect.

Today, most serology tests have up to 95 per cent accuracy, or “specificity”. This means that 5 per cent of people test positive for antibodies (and by corollary, immunity) falsely. To put that in context, if the prevalence of infection is also 5 per cent (the current estimate in the US) then there would be just as many people being incorrectly identified as immune as those correctly identified. Said another way, how comfortable would you be going back to work knowing there’s a coin-flip chance that you don’t have antibodies, nor immunity, to coronavirus?!

Chance of serology tests wrongly determining immunity

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While “testing, testing, testing” has become the mantra for public health experts looking to contain the spread of coronavirus, and politicians and business leaders wanting to get workers back to work, it is far from a panacea for the pandemic and its adverse economic consequences. We hope the challenges to effective and useful testing can be overcome, and quickly, but we realise that it’s a tough ask and one that may be underestimated by headlines and market movements of late.

INVEST WITH MONTGOMERY

Christopher is a Portfolio Manager for the Montaka funds and the Montgomery Global funds. He joined MGIM at establishment in 2015.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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Comments

  1. While “testing, testing, testing” has become the mantra for public health experts looking to contain the spread of coronavirus, and politicians and business leaders wanting to get workers back to work, it is far from a panacea for the pandemic and its adverse economic consequences.

    I agree Christopher, testing is a undoubtedly a good thing and is very useful if one is trying to contain an outbreak in its early phases but hope that it might hold the tide back may well prove overblown if this virus turns out to be more sneaky than we first thought. Time will tell and hope is not a bad thing but investors need to act on what information they have and not trust in hope.

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