Tuesday, the WHO increased the alert level to phase 4 for the swine flu, indicating a "sustained human-to-human transmission." But U.S. health officials aren't certain what they are dealing with just yet. The number of reported swine flu cases in the U.S. remains small and infections have been largely mild. In a teleconference Tuesday, Dr. Richard Besser, acting director of the Centers for Disease Control and Prevention (CDC), continued to stress that health officials will "approach this investigation and our control efforts aggressively."

The paper-based test conducted by the financial services sector in 2007 with the help of the U.S. Treasury was in response to the threat of avian influenza, or bird flu. Some 3,000 participants went through a series of exercises that made them test their operations as absences increased and supply chains weakened.

The scenario ( available online) tried to recreate a real pandemic. For instance, in the first cities impacted, it describes increased purchases of nonperishable goods, predicted a rise in the dollar's value as a safe haven, and anticipated questions from employees who wanted to know what was being done to keep their workplace safe. It tried to consider every possibility.

"I think we are well prepared - I think a lot of sectors are better prepared than they were a few years ago," said Shawn Johnson, a senior managing director of State Street Global Advisors in Boston, who is also the head of the Financial Services Sector Coordinating Council, one of the groups that ran the 2007 pandemic test.

Johnson said he was briefed by the U.S. Deptartment of Homeland Security this past weekend, and again today. He says it is still "early days," and only triggering a review of procedures. But he saiud they are not ruling out that things can change quickly in such a case.

Gartner Inc. analyst Rick DeLotto said th eWHO phase-level is not going to impact businesses, but it would affect decisions to close local schools and care for the elderly.

DeLotto is advising companies to check their telecommuting capabilities, as well as make sure that assistant managers can take over if need be. But pandemic planners have warned that high demand from people accessing the Internet at home could lead to usage restrictions.