This week's New Yorker features two articles right next to one another that are subtly linked. Atul Gawande writes about health insurance, Michael Moore's Sicko, and the impediments in our own minds to reforming our system. And James Surowiecki writes about fuel economy standards and game theory.
Surowiecki's point is that people who drive gas-guzzling Suburbans and Hummers can still rationally vote for higher fuel economy standards. What is rational for themselves as individuals --- buying huge trucks --- they can recognize as not collectively optimal.
Gawande has been writing about Americans' reluctance to recognize this kind of problem in the U.S. market for health insurance. It may be individually rational, if heartless, for each of us to turn our backs on the chronically ill, allowing insurance companies to boot them out of coverage or charge them higher premia. Because after all, we're not sick. Not yet, anyway. But it is collectively optimal for everyone to have health insurance, period. Unfortunately it's not clear that Surowiecki's Suburban drivers recognize this yet.
Another interesting parallel is that Suburban drivers think they'll be safer in accidents. But the average American seems not to think he or she will ever get sick enough to run into problems with coverage, or at least is not willing to pay to insure everyone against that risk. Maybe the latter misperception (is it?) can be helped with films like Sicko, although pundits have claimed the film shows nothing new.
