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The SARS-CoV-2 Gamma variant spread rapidly across Brazil, causing substantial infection and death waves. We use individual-level patient records following hospitalisation with suspected or confirmed COVID-19 to document the extensive shocks in hospital fatality rates that followed Gamma's spread across 14 state capitals, and in which more than half of hospitalised patients died over sustained time periods. We show that extensive fluctuations in COVID-19 in-hospital fatality rates also existed prior to Gamma's detection, and were largely transient after Gamma's detection, subsiding with hospital demand. Using a Bayesian fatality rate model, we find that the geographic and temporal fluctuations in Brazil's COVID-19 in-hospital fatality rates are primarily associated with geographic inequities and shortages in healthcare capacity. We project that approximately half of Brazil's COVID-19 deaths in hospitals could have been avoided without pre-pandemic geographic inequities and without pandemic healthcare pressure. Our results suggest that investments in healthcare resources, healthcare optimization, and pandemic preparedness are critical to minimize population wide mortality and morbidity caused by highly transmissible and deadly pathogens such as SARS-CoV-2, especially in low- and middle-income countries.

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