When everything is free, nothing is

A tragic story came out of Canada. A 44-year-old man died after waiting more than eight hours in an emergency room with chest pain, blurry vision, and a blood pressure of 210.

This story establishes the human cost of delayed care. No one involved acted maliciously. Not the doctors. Not the nurses. Not the triage staff. They were inundated, operating exactly as the system is designed to function under extreme load. This was unfortunately not a unique experience, as over half a million Canadians leave the ER every year without being seen.

That leads us to some uncomfortable truths.

Healthcare is a scarce resource. If an emergency physician is seeing one patient, they cannot simultaneously see another. The same constraint applies to clinic appointments, operating rooms, imaging slots, lab capacity, ICU beds, and nursing attention. Scarcity is unavoidable.

And if a resource is scarce, it must be allocated.

A minor cough and a major heart attack are competing for the same finite pool of time, staff, and space. The only real question is how that allocation occurs.

In a modern society, there are only two ways to allocate scarce resources: price signals or central planning.

Consider a primary care clinic. If appointments are scarce, a physician may raise prices. That does several things at once. It signals to patients that appointments are valuable and should be used when truly needed. That self-sorts demand and functions as a form of triage. The patient with a rash that has already started to clear might stay home, opening up a slot for someone with a more urgent problem. It also signals to other physicians that capacity is constrained and that opening a new clinic could be financially viable, increasing supply.

Prices transmit information about scarcity and urgency.

Now consider the alternative. When clinic visits are free at the point of use, as they are in Canada, that information disappears. Patients with low acuity concerns hold onto appointments because there is no marginal cost and no guarantee another slot will open soon. Wait times lengthen. At the same time, there is little incentive for new clinicians to enter the area or for existing clinics to expand. Innovation stalls. The feedback loop is broken.

The downstream effects are predictable.

Primary care becomes inaccessible. Specialists bottleneck. Diagnostics are rationed administratively. Eventually the emergency department becomes the default intake for everything, regardless of acuity.

The ER turns into a clearinghouse for upstream failure.

Some argue that this system is more fair. It is not.

When prices are suppressed, allocation still occurs. It just happens through time, persistence, and influence. Those currencies are profoundly regressive. The wealthy find ways around the system. In Canada, they travel abroad and pay cash. In other countries, they purchase private insurance that allows them to skip queues. Those without means wait longer and get sicker.

This is rationing by delay.

Healthcare is not the only necessity required to sustain life. Food, housing, energy, and transportation are also essential. We do not eliminate prices for those goods. Instead, we preserve price signals and subsidize people who cannot afford them. That approach maintains information while addressing equity directly.

Of course, nobody is arguing that we should ration by price in the emergency room. Rationing there happens by wait time. Those wait times are increased when the price mechanism has failed upstream, dumping a lot of low-acuity things into the emergency room. If a minor skin infection can’t be seen in a clinic for 3 months, an ER visit is the only option when it looks red and swollen. In Canada, the median wait from referral to treatment is nearly 30 weeks.

Price signals preserve emergency capacity.

Centralized healthcare systems that remove price signals must find alternative allocation mechanisms. Those mechanisms are typically political. Prices are set by committees and adjusted slowly, if at all. When input costs rise (rent, utilities, staffing, supplies), reimbursement often does not. The system cannot respond. Shortages are inevitable.

Scarcity does not disappear because we find it morally uncomfortable.

Prices provide information that allows patients, clinicians, and institutions to make tradeoffs. A physician deciding whether to continue clinical practice or move into private industry responds to those signals. A patient decides whether a visit is urgent or can wait. Clinics expand. Firms invest. Technology improves. Capacity adjusts.

This feels counterintuitive because we are accustomed to thinking of prices as exclusionary. But scarcity excludes by its very nature. The question is whether allocation happens transparently and early, or quietly and catastrophically.

Rationing is unavoidable. The choice is not rationing versus abundance. The choice is whether we ration through price signals, with subsidies for the poor, or through political control and waiting lists.

A system that refuses to price scarcity will still ration care. It will just do it quietly, inefficiently, and often, fatally.