There’s been a lot of a lot of media attention paid to a possible Avian Flu pandemic over the past few months. Although the World Health Organization(WHO) and other bodies say this pandemic is inevitable, no one knows exactly when it will occur or how severe it will be.

If the pandemic is severe, it will have a profound impact on businesses. Borders may close and international travel and export will be severely curtailed; some industries, such as tourism, will collapse, and the financial markets will be unpredictable. On a day-to-day operational level, companies will struggle with high absenteeism and the loss of key personnel. Finally, benefits plans will be severely tested by growing short- and long-term disability rates and astronomical pharmaceutical costs.

Pandemics are nothing new. Neither is influenza. They’ve both been around for a long, long time. There have been three significant influenza pandemics in the last century. In 1918-1919, the “Spanish flu” killed approximately 40 million people, more than the First World War. The “Asian flu” of 1957-58, and the 1968-69 “Hong Kong” flu were lesser flu pandemics but they still left thousands dead.

Today, another global avian flu pandemic is being anticipated—one that some say might rival the 1918-19 Spanish flu in severity. The problem is one highly pathogenic strain known as H5N1. What is alarming to the WHO is that H5N1 has jumped the species barrier, meaning that people have caught this illness from birds.

The next jump, that of human-to-human contagion, has not yet happened, but the WHO has said this is just a matter of time and that the risk of H5N1 evolving into the next pandemic is very high. “H5N1 has the potential to be severe and widespread with an attack rate of about 35%. In other words, one in three Canadians will be sick over the course of the pandemic,” says Maureen Cividino, the occupational health physician for St. Joseph’s Healthcare in Hamilton, Ont. and the chair of the Hamilton Infection Prevention and Control Committee.

That’s not good new for businesses. In a report entitled Don’t Fear Fear or Panic Panic, economist Sherry Cooper, executive vice-president of BMO Financial Group in Toronto writes, “businesses would be confronted with, say, 25% absenteeism, maybe more, as many workers take ill, stay home to take care of children or family members or refuse to go to work, especially in heavily-populated office towers.” In a report outlining the City of Toronto’s pandemic response, David McKeown, the City’s Medical Officer of Health, states that an avian flu pandemic has the potential to infect up to 50% of the population.

According to the Centers of Disease Control and Prevention in Atlanta, the fact that pandemics generally last between 24 and 36 months and come in waves usually lasting about eight weeks will add to the impact on the economy.

The key to business survival during a pandemic is preparation. Once a pandemic hits, it will be too late. “Companies should have contingency plans in place to keep functioning with a greatly reduced staff, but they should also establish how they will manage fear,” says Norval Wener, vice-president, Professional Services and chief clinical officer at FGIworld in Toronto. “Anxiety and panic will rise in incremental stages to match the progress of the pandemic. People will need emotional support.”

To deal with rising anxiety, organizations should direct employees to pandemic information and ways to manage stress. “This will be a situation where an employer wants higher EAP utilization,” says Wener. “And depending on the severity of the pandemic, there will be a higher usage of trauma response services.”

Wener explains how management will also be accessing their EAP for consultations on how to educate and communicate with employees before, during and after the pandemic. “Communication is vital,” says Bruce Rowat, an internist at the Toronto General Hospital, associate professor at the University of Toronto and a corporate medical advisor to a number of large organizations in Canada. “Not only the importance of basic respiratory hygiene, like frequent hand washing and covering your mouth every time you sneeze and cough, but giving information to dispel fear.”

“There’s no evidence to say how severe any future pandemic will be,” says Rowat. But if the next world flu is severe, there will be lasting ramifications. “There’ll be longterm psychological issues, such as post-traumatic stress, bereavement issues and depression,” says Cividino. So high EAP utilization could continue for a considerable time after the end of the pandemic.

Psychological issues will result in an increased demand for anti-depressant and anti-anxiety medication. This need, together with medication required to counter the physical affects of a severe flu and its complications, would put the squeeze on drug plans. “Preventative vaccines are not normally part of corporate drug plans,” says Anne Pennell, vice-president, Customer Services Operations, with Standard Life in Montreal. “Neither are many antivirals. But in the event of a pandemic, we would see exceptions made. In addition, governments would surely step up and pay for new medications and negotiate better pricing if need be.”

They would have to. Tamiflu, for example, is expensive at about five dollars a pill(that includes dispensing costs). As a preventative measure, the recommended dosage is one pill once a day for seven days within two days of exposure to the illness. That will provide some protection for six weeks(approximately $35).

For those experiencing the onset of flu symptoms, the dosage is 75 mg twice a day for five days($50). Multiply these figures by thousands, maybe tens of thousands and that’s a major expense. At the present time, it’s a non-issue as Tamiflu is only available for hospitals and long-term residences.

But it’s often not influenza itself that is the killer: it is the complications that sometimes develop. “An avian influenza pandemic would result in increased demand for medications to treat the complications of influenza such as steroid puffers for pneumonia and prescription pain killers,” says Cividino. “Since this would be a new strain of influenza, it would take time to develop an effective vaccine, likely up to six months before it would be ready in sufficient numbers to be effective. Mass immunization strategies will need to be developed.”

More demand for medications will raise company drug plan costs. “A five to 10% increase in drug costs will mean your plan will become more expensive—but only upon renewal,” says Suzanne Caron, vice-president, Pricing, Underwriting, Systems and Quality Controls at Standard Life in Montreal. “An employer can impose the use of generic drugs, which would keep costs for all parties down but in the case of a pandemic, again, exceptions would be made or modifications made to the plan on a temporary basis at the request of the employer.”

Sherry Cooper adds that life insurers could throw their actuarial tables out the window if the coming pandemic mirrors the 1918-19 flu and kills a disproportionate number of 20- to 40-year-olds. That may be the case, but large insurers like Standard Life are prepared for devastating losses. “Insurance companies are required to simulate catastrophic loss scenarios and evaluate the impact on their financial solidity,” says Caron.

For now, it’s a matter of wait and see. The point is that society—not just the health system—should be prepared for a pandemic of any type. As a recent headline in the Wall Street Journal said, “Planning for a catastrophe is positive thinking. Not thinking so is a disaster.”

Paula Allen is vice-president, Health Solutions and Product Development, FGIworld in Toronto.