How Frontline Heroes Shields Healthcare Workers From COVID-19

In this episode of Industry Focus, Nick Sciple chats with Ben Hunt from Epsilon Theory about Frontline Heroes. Frontline Heroes is an NGO set up by Ben and others to help equip healthcare workers with masks and other personal protective equipment to help battle the COVID-19 pandemic. Learn how they procure the equipment and what challenges they face.

If you wish to contribute or know someone in need of personal protective equipment, visit FrontlineHeroesUSA.org.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

This video was recorded on April 16, 2020.

Nick Sciple: Welcome to Industry Focus. I'm Nick Sciple. My guest today is Ben Hunt. Those of you who heard our previous discussion with Ben know that Ben's work at Epsilon Theory focuses on using principles of game theory to analyze markets. That's not what we're going to be talking about today, though. Today we're focusing on Frontline Heroes which is a charitable organization set up by Ben and others to help equip healthcare workers with masks and other personal protective equipment to help battle the COVID-19 pandemic. Ben Hunt, welcome back to the show.

Ben Hunt: Hey, Nick, thanks for having me on. I appreciate it.

Sciple: Well, thanks for coming on, and thanks for the work that you're doing. Before we get into Frontline Heroes, I want to talk a little bit about the COVID-19 pandemic and, kind of, how you first became aware of what was going on here. I think you were one of the first people I saw to really start sounding the alarm in a really vigorous way about how serious this could become. So what really first alerted you to how serious this could be and that we really need to be worrying about this?

Hunt: You know, Nick, it was right at the end of January when a friend of mine highlighted for me some work that was happening on a Reddit thread, of all things, that was trying to do a statistical analysis of the data that was coming out of China on the number of infections, the number of deaths, and the like. And, you know, I'm always interested in stuff like that, that was my PhD work a long time ago. You know, I was a professor for about 10 years and focused on statistics, econometrics, and the like.

So I was taking a look at the data, and while there was some silliness to some of the statistical analysis, trying to do an R-squared on something that you really can't do R-squared on or it makes no sense. The basic thrust of the examination was absolutely right. And that basic thrust was that the numbers that were coming out of China were clearly being falsified, they were clearly being made up, the statistical series that was being presented.

The data series that was being presented could not possibly fit from an exponentially spreading virus, which, that's just the math, the biology of how viruses spread, combined with some level of mitigation efforts and therapeutic procedures, which creates what we call a sub-exponential function.

And so the data we were getting out of China was clearly a lie. I was writing about that, really that early February, but then the lie spread, you know, the lie spread to the World Health Organization and the way that they were toeing the party line, very quite literally in fact, that was coming out of China. It spread further. It spread into, I think, a lot of the narrative that was coming from the U.S. government, both the CDC, mainstream media, the White House, everybody, early in our response function to the virus.

So yeah, that was what got me involved very early on. You know, first seeing that the data that was coming out of China was being falsified and then more than that, trying to understand the narratives that governments, whether it's the Chinese government, the American government, institutions like the World Health Organization, the narratives that those institutions built on top of that falsified data.

Sciple: I think when you mention narratives, I think, a lot of your work focuses on this, and this pandemic has been a really great case study in how these things evolve over time. It evolved from "this is a China problem" to "this is in older people and people with preexisting conditions" to kind of where we are today. How have you seen that narrative evolve and what were, kind of, the turning points where that narrative shifted?

Hunt: Well, I think, from the U.S. perspective, the major turning point really was at the very end of February, where finally the White House started taking it more seriously, still minimizing the impact, still, I think, making critical errors in the policy response. But the turning point for me was really there at the end of February when finally, the White House started taking this seriously.

And, you know, it reminds me of the tag line I've got for this, a lot of what I write about, I call it "our finest hour," which is a quote from Churchill talking about World War II. And I know it seems weird to think about this being our finest hour, because I'm really not talking about the government, I'm really not talking about institutions, I'm talking about us. I'm talking about American people, American citizens, because I really do believe that no country mobilizes for war as effectively as the United States can and does.

As Churchill also said, war is a series of blunders and that America will do the right thing after it's tried everything else first. And I think we've certainly seen that. But I think we've come around, I think that when we look at this in 2 years, 5 years, 20 years, and 50 years, we will look back on this war against the virus as another American episode where we started off slowly and with a lot of mistakes, but we finally got our act together and took care of it.

Sciple: Yeah, I think the war analogy is perfect, because when you talk about how quickly things change, how all of a sudden, life, overnight seemingly, shifts in such a meaningful way.

I do want to talk about Frontline Heroes now, the work that you've done there. First off, what is Frontline Heroes? How did it get started?

Hunt: Well, it's part of the war effort, you know. What Frontline Heroes is all about, it's about getting necessary equipment, in this case armor, to our soldiers who are fighting this war. The soldiers who are fighting this war, we call our Frontline Heroes, are the doctors, the nurses, the EMTs, the fire departments, the emergency responders, they're everyone who is dealing with this virus on a daily basis to take care of the rest of us.

And I will tell you, the risk that these Frontline Heroes are taking on is enormous. You know, we've had well over a 100 doctors in Italy die now from COVID-19. There's just no telling how many doctors and nurses and healthcare workers, healthcare professionals died in China. And our goal is to try to prevent, to whatever degree we can, the same thing from happening here.

Because what I'll tell you is that the scenarios under which we lose this war all have one thing in common, and that is that our healthcare system becomes overrun, becomes overwhelmed, where we are no longer able to mount a defense against the virus on the front lines, which is happening in every emergency response, every hospital and clinic, really all across the country. That's what we're trying to do.

We're not risking anything, you know, we're just risking our time and our money. We are doing this for the people who are risking everything, their lives -- and this is actually more important for a lot of these Frontline Heroes -- they're risking their families' lives. That's the one thing I hear more often than anything else when I talk to these nurses and doctors and EMTs. They understand the risks that they are taking by going out there and serving on the front lines. What really gets to them in such a powerful way is the chance that they're bringing that risk home to their own families.

So whatever we can do. And then I'll describe what it is that I think we can do, all of us can do. Whatever we can do to help them is the least we can do.

Sciple: Absolutely. You know, we've talked about a lot of our industrial capacity ramped up to make the physical goods we need to protect to fight this thing, but really, this human capital, all these healthcare workers cannot be replaced, are absolutely essential, and if we lose them, we lose our ability to combat this disease. So what is Frontline Heroes doing on a day-to-day basis to try to get this equipment to people?

Hunt: Well, let me start by saying what we're not doing. And you mentioned that about the industrial production and the like. You know, what we're not doing is we're not competing with the federal government or state emergency management authorities. We're not competing with them to bid up PPE prices, the price of masks and the like. We're not out there bidding on a million masks from China.

We're not out there trying to, I don't know, find a new source for ventilators, right? We're not out there trying to do serological testing with test kits and antibodies and the like. Now what we're doing. Well, there's something else we're not doing: We're also not waiting. We're not going to wait for the Federal government and the state management authorities to do these massive bulk orders of masks and other personal protective equipment and then trickle that down to the front lines of this war.

What we are doing is we are making small purchases on an individual basis from partners we have in China and Singapore, where this equipment is plentiful and inexpensive.

We get these small orders, we ship them back here to the United States, and in that case, we avoid most of the enormous difficulties around customs, border controls, both coming out of China and then also into the United States. You know, I can tell you lots of stories [laughs] about how difficult that is.

And then we bundle them here. And importantly then, we ship them directly to the people who are in urgent need of the PPE.

What we set up, we think, is an end-to-end grassroots distribution system. We buy it in small quantities, we ship it over here, then we repackage, and we ship it out in small quantities. You know, we're not going to be able to send 5,000 masks to some hospital system.

But what we can absolutely do is get 50 masks, 100 masks, 200 masks to an individual clinic, an individual hospital department, an individual fire department or EMT squad. We can get that equipment directly into their hands very quickly with no red tape and at no charge to the recipient. That's what we're doing.

We call it almost, I like to use the analogy of, it's an Underground Railroad for PPE, where we work with dozens of people on the ground in China, in Singapore to source the equipment. We get it over here, we have a foundation set up to reimburse them and pay for it, we test it to make sure that we're getting good quality control on the equipment, and then we deliver it on that last mile. We deliver it on that last mile to the people who've got to have it right now.

Sciple: Yeah, Ben, one of the things you've talked about is that you're focused on assigning the PPE on the basis of need versus a first-come, first-serve basis. So how do you assess need and how do you find out that these are the people that we need to get this equipment to as quickly as possible?

Hunt: Well, that's the beauty of having, I'll call it, a microphone, a platform like you guys have, like I've got to a lesser extent with Epsilon Theory, that we can get the word out about, both, our efforts and the foundation we've set up to pay for the equipment, but as importantly, get the word out for people who are on the front lines, to let us know if they have an urgent need for N95 masks, iso gowns [isolation gowns], face masks and the like. Or if you know somebody, right, if you've got a friend, you've got a sister, you've got a brother-in-law who's a nurse or who's working in a clinic somewhere and you know the situation they're in, fill out the online report. We will ship directly to people's homes.

I mean, we verify that people are who they say they are, but we'll send it directly to people's homes, where we're trying to cut through all the red tape and all the delays in getting the equipment to the people who need it the most.

Sciple: Yeah, you mentioned the friends and people that you know that are going through these issues. We were talking about before we started recording here that, you know, I have a friend as a nurse out in Colorado Springs, neonatal intensive care unit. She's the nurse that's in charge of treating COVID patients. And the efforts that they've had to make to conserve their PPE, I think they have a limited number of masks, and so, whenever she's treating someone who is likely to be or is determined to be COVID positive, she really can only spend time with that patient given that you don't want to be taking the PPE on and off and contaminating other folks. And it really, they've had to create a lot of special procedures in order to accommodate that. Then you layer on top, I think she's the only nurse on her entire team who is not pregnant right now, so she's the only nurse who possibly could be treating these folks.

And I'm sure those issues are all over the place, all over the country, you know, Colorado, New York, obviously. Where are you seeing the biggest demand for these products from healthcare professionals?

Hunt: Well, to your point, Nick, it is everywhere. You know, it's every big city, a lot of small towns in the country. This disease doesn't know geography; it follows wherever a crowd of people. You know, if you've got a city with an airport, you've got this disease, you've got a cluster of it somewhere. So yes, we hear a lot about the epicenter of New York, New Jersey, and where I live in Fairfield County, Connecticut, and that the epicenter is very real.

So our initial deliveries of urgent need. We're here in this, called this tri-state area, but we are shipping today really everywhere in the country. New Orleans, Louisiana, is an absolute place of need. You know, places you might not think about. You mentioned Colorado Springs. Colorado, we've got a lot of places that are in significant need there. Atlanta, Georgia; Birmingham, Alabama; Indianapolis, Indiana, right? [laughs] These are people, these are places where you may not see the news coverage.

But I will tell you that the ICU wards and what we call the tertiary medical center, the really crucial backbone of any regional medical support, these have all been now taken over entirely by COVID-19 patients. The individual departments and clinics, you know, you mentioned a neonatal clinic, right, an OB-GYN clinic, you name it, these are the places where they may not have the access to the same levels of N95 masks as you might be lucky enough to get in an emergency department.

So we're able to get equipment directly to the people who are having to ration it right now. And like I say, it's the least we can do for the people who're putting their lives, and frankly their families' lives, on the line every freaking day.

Sciple: Ben, I want to talk a little bit more about how you're sourcing this equipment. You know, it's available overseas, China and Singapore. What is your team on the ground doing, and how are they sourcing this equipment?

Hunt: Well, before I do that, let me just mention the website where people can, if they are interested in contributing to the cause or if they are someone or if they know someone who needs masks -- that's our main focus right now, the N95 or N95-equivalent masks -- it's FrontlineHeroesUSA.org, all one word, FrontlineHeroesUSA.org. And you can find out more there. If people are familiar with this or with me from Epsilon Theory, of course, you can go to the Epsilon Theory site, and we've got the links where we talk about it there as well as the links to the Frontline Heroes site as well. So FrontlineHeroesUSA.org.

The sourcing is interesting. And I say interesting because I can't use the swear words I would typically use on my tweets or some of the other stuff that I write about. What we have today is a system where all countries are forced into essentially a war of all against all to compete for this equipment. That's not any one country's fault. But it is the system that we have to endure today where our manufacturing, our supply lines for the United States, for most countries, are no longer in their own country but are typically found in China.

The sourcing and the distribution of this equipment is done in such a fragmented, in such a, I'll say, rapacious manner that -- you know, we'll have a contract that we think is for buying equipment at a certain price, the next day it'll be 10% higher. And like I say, we're buying on the fringes of the system, right? An individual can buy a couple of hundred masks and get delivery there in China. They'll bundle it together and move them over here. So what we've set up is, we think, a stable supply of anywhere from 1,000 to 2,000 masks per day. We can occasionally supplement that with a slightly larger order of, let's say, 10,000 masks or maybe even 20,000 masks if we really got a good in on an order. But we're doing it in these small quantities,, and even at this, operating on the fringes here, we just see what a Wild West environment exists.

I've seen so many forged FDA certificates, I've seen so much, as I say, of the price changing from the morning to the afternoon. It's truly a Wild West environment, to hear that phrase, where you get a lot of forgeries, a lot of equipment that's not made up to snuff.

So we have, we think, the best possible way that we can of managing the situation. We do have people on the ground who are able to do due diligence on the manufacturer, not just on the supplier. We are able to check the equipment, to spot-check the larger orders that we get in with helpful medical centers over here in the U.S. So we do what we can, but it's been a crash course in sourcing and of, like I say, the rapacious nature of a completely unconstrained and uncontrolled environment here.

Sciple: Right. I think those supply chains are challenging, to say the least, under normal circumstances. Then you layer over the intense need for these products during a global pandemic. I can only imagine the difficulty that's been to navigate through that. To give some folks some look through into, kind of, what their donation can buy. I mean, just like $40 or $50, what does that get for healthcare workers on the front lines? Like, what difference does that make for folks?

Hunt: Well, so for $40, we can purchase and ship about 10 of the N95 or N95 equivalent masks of really good quality. And 10 masks for a nurse, for a doctor in really anywhere in the country today, it's a lifesaver. [laughs] I mean, literally a lifesaver. 10 masks; when you're reusing the same mask over and over again for days, to have 10 masks to have 50 masks. We typically send in 50, 100, sometimes 200 masks at a time. The recipient will share those masks with the people on his or her team.

So what we're trying to do is we're trying to at least get everybody the case where they don't have to reuse the masks day after day, where they can in fact replace a mask after a couple of hours of seeing a couple of patients.

We are not at all back to the place where we can be truly disposable with these masks. But to get us to an area where we are not taking obvious risk with this personal protective equipment, from reusing day after day, from having to ration them to such an extent that we're seeing today; that's what we're trying to achieve, that's what we're trying to achieve here. And $50 makes an enormous difference.

Sciple: And just to follow through, you know, I mentioned my friend earlier. Yeah, they are each given one mask and a brown paper bag to put it into and then staple-closed and reuse each day; which, better to have something than nothing, but it's far from the ideal situation that we like these folks to be in.

Obviously, extremely high demand for these masks right now. You know, 3M, a lot of these companies are trying to ramp up their supply chain to help address these issues. Do we have any insight into how long it might be until, through these traditional channels, we might be able to provide equipment?

Hunt: So Nick, I think we have seen and we always see this when, particularly, the United States goes to war. We've seen a lot of overpromising and underdelivering. And we've seen that in not just the mask situation but also certainly the testing situation, certainly the ventilator situation. It's very frustrating, right, that notion of overpromising and underdelivering. My strong belief is that we are going to be faced with, I'll call it, shortages for -- when I say the foreseeable future, I mean for years.

Our goal right now is the same goal I think that more broadly we have for the COVID-19 pandemic. What we're trying to do right now is we're trying to turn this into a chronic problem, where it is now an acute and potentially overwhelming problem. The goal here is not ever, I think, to return to the day where most hospitals have a three-month supply of N95 masks, and every time you go into a new room with a new patient, you put on a new mask, where they were truly disposable. I don't think we're ever going back to those days. I really don't.

But what I think we can achieve is to turn this from an acute issue of life and death into a chronic problem of risk and managed risks. That's our goal here. And it's our goal to turn it into a chronic problem rather than an acute problem, not just for the brand-name and top-of-the-line medical centers who maybe can get a million masks in a month from the FEMA or the like, we're trying to help out -- they're not forgotten troops, they're not forgotten front-line heroes, but they're at that clinic, they're at that department where they don't have access, but they still have need. That's our goal here. And I think, unfortunately, our services are going to be needed for a long time to come.

Sciple: Yes. So as folks are looking out, we mentioned this is probably going to be a problem we're facing for the foreseeable future, years maybe into the future. How do you think our behavior changes as a country as a consequence of this pandemic?

Hunt: Well, Nick, I don't think that human behavior changes. I don't think that anything changes in our psychology and the way that we, as social animals, are driven to lead our lives. What I do think changes, and I think changes permanently, are our systems. You know, I talked about our systems earlier. And what I mean by changes, I do think this leads to a permanent change, for example, in our international political and economic system.

This 30-year, let's call it "tailwind," at least for S&P 500 companies, of globalization, this tailwind of globalization, it's not just stopping, it's reversing. It's reversing. These supply chains are going to come back to local countries, to each individual country, and they're not going out again.

We've changed our international system from an area where lots of cooperative games can be played to where it's all competitive games all the time, where it really is every country for itself. We see that not just on an international systems level but I think on many domestic systems. In this country and particularly in other countries.

I think that the way we interact with each other, does that change on, kind of, I'll call it, superficial levels of where there's less person-to-person contact and more remote contact? Sure, absolutely. But what frankly depresses me more is not the person-to-person versus remote interaction, it's the nature of competitiveness and that it's going to be more and more every country for itself, every state for itself, every company for itself. And ultimately, it feels like we could move to every person for itself, for him- or herself, every family for itself.

And that's something that takes really strong and, I think, empathetic political leadership to overcome. And unfortunately, that's the type of political leadership that I think is in short supply whatever end of the political spectrum you want to look at.

Sciple: I couldn't agree more. I think what is kind of empowering and makes me feel positively about where things are going, is some of this bottom-up work like you and others are doing. That working kind of comes together as a group to help solve this problem in any way we can, and everybody can play a part in that.

Outside of Frontline Heroes, what else can people do to be a part of the solution to this?

Hunt: So there are a million different ways to help, right? I think that one of the pressing needs is what I'll call around, it goes by the name of "food security." People who are insecure about where their next meal is coming from, that impacts an enormous number of children in this country, it impacts so many families in this country, it's just devastating to think about.

So I think there's a lot of great work being done on food security around food banks, you know, the lunch programs that were being run through schools, now with schools shut down, they have to be run through these other organizations.

Just do a quick look in your area about food banks, food security programs. You know, for my money, that's where we can all play a big role in where there is such a big need.

More broadly than that though, Nick, I think you're exactly right. We can't look to the government to save us, especially not today, but I think we can absolutely look to ourselves. And the thing that has been so powerfully uplifting is the degree to which not just citizens in this country, but I've seen citizens in every country rally around these types of grassroots, bottom-up efforts to help their neighbors. That is why I think this will be our finest hour, when we look back at this in the years to come.

So grassroots, bottom-up, focus on food, focus on protecting our front-line soldiers, those doctors and nurses and first responders, and this will be our finest hour.

Sciple: Absolutely. Couldn't agree more, Ben, and thank you for joining us. Just before we let you go, can you give us the link one more time where people can contribute and where they can go if they're a healthcare worker or know someone who needs this equipment where they can let you know about that.

Hunt: Yeah, absolutely. So FrontlineHeroesUSA.org, all one word.

The site there will have a link to both the donation facility as well as the online form, where if you or someone you know is in urgent need of PPE, you can fill out the form, and we will get something to you.

FrontlineHeroesUSA.org, or if you're familiar with me from Epsilon Theory, you can certainly go there as well.

Sciple: Thanks so much, Ben, and thanks for coming on.

Hunt: Thanks for having me, Nick. Really appreciate it.

Sciple: As always, people on the program may own companies discussed on the show, and The Motley Fool may have formal recommendations for or against the stocks discussed, so don't buy or sell anything based solely on what you hear.

Thanks to Austin Morgan for his work behind the glass. For Ben Hunt, I'm Nick Sciple. Thanks for listening, and Fool on!