The Price of Access: Friction Allocates Scarce Capacity
Ambulatory access leaders do not need to be convinced that demand often exceeds supply. You see it every day in long appointment waits, full templates, growing referral queues, clinician frustration, and patients struggling to obtain timely care. What receives less attention is the mechanism by which that scarcity is actually resolved.
When there is more demand than available capacity, some process must determine which patients ultimately receive the limited supply. In most markets outside of health care, price plays a central role in that allocation. As the price of a scarce good rises, some consumers are no longer willing or able to purchase it, thereby reducing the quantity demanded until the available supply is allocated. Through this mechanism, the market moves toward equilibrium: the quantity consumers are willing to purchase at a given price comes into balance with the quantity suppliers are willing or able to provide.
Health care does not typically operate that way. We do not continuously increase the monetary price of a cardiology appointment until the number of patients seeking care matches the number of appointments available. Can you imagine: an eBay-like auction for Dr. Famous’ appointments on Friday? Despite our inability to use price as a supply-demand balancing lever, the underlying economic problem remains. Scarce capacity must still be allocated: in most scenarios, we have unknowingly substituted a different type of price.
Friction as the Price of Access
Patients routinely incur substantial transaction costs when attempting to access care. These costs include waiting weeks or months for an appointment, spending time on hold, making repeated calls - and navigating referral requirements, scheduling rules, authorizations, portals, and handoffs. Patients may also need to accept inconvenient appointment times, travel farther than they would prefer, or rearrange work and family obligations around the limited capacity available.
These burdens function much like a price. Although patients may not pay additional dollars, they incur costs in the form of time, convenience, persistence, uncertainty, and effort. As those costs increase, some patients continue pursuing care while others do not. Friction is the shadow price of access, influencing which patients ultimately receive available capacity when supply is constrained.
The Wrong Allocation Mechanism
The question facing health system leaders is not whether scarce ambulatory capacity will be allocated, but how that allocation will occur. When a health system does not explicitly determine how competing demand should be prioritized, the access process makes those decisions indirectly.
Patients differ considerably in their ability and willingness to absorb the transaction costs associated with obtaining care. Some may tolerate the three-month wait, while others will seek care elsewhere. Some may call repeatedly looking for a cancellation, while others will simply stop trying. Patients who can travel to another location, leave work in the middle of the day, navigate a complicated referral process, or repeatedly contact the health system may have more opportunities to obtain an appointment than patients who cannot.
Eventually, the available appointments are filled. In an economic sense, allocation has occurred, but this does not necessarily represent the type of equilibrium that we are trying to achieve.
There may still be substantial unmet need, inappropriate delays, clinician dissatisfaction, poor continuity, patients receiving care in the wrong setting, and demand accumulating outside the portion of the system that is easily observable. These delays and misallocations can also create meaningful safety and quality risks when patients are unable to receive the right care, from the right clinician, at the right time. The schedule can therefore reach a functional equilibrium, with available appointments ultimately filled, while the system remains clinically out of balance.
Who Pays the Price?
The central concern with friction as an allocation mechanism extends beyond the inconvenience it creates for patients. The ability to absorb these transaction costs has very little relationship to the criteria health systems should ideally use to allocate scarce healthcare capacity.
A patient's persistence, schedule flexibility, or willingness to spend an hour on the phone tells us little about clinical need, urgency, or expected clinical benefit. Similarly, the ability to travel to another site, navigate digital tools, understand referral requirements, or repeatedly contact the health system is not a meaningful basis for determining which patient should receive an appointment first. Yet when friction becomes the allocation mechanism, these characteristics influence who ultimately receives care.
In a traditional market, a monetary price serves as an explicit mechanism for reducing the quantity demanded. In ambulatory access, however, the shadow price is often neither explicit nor intentionally designed.
Allowing that undesigned shadow price to allocate scarce capacity means relinquishing control over the allocation process. We are neither benefiting from a traditional market mechanism, in which an explicit price helps reconcile supply and demand, nor deliberately determining how limited resources should be distributed according to clinical need, safety, quality, or system-level priorities. Instead, the responsibility for resolving scarcity falls largely on individual patients, who effectively compete for access based on how much friction they are able to endure.
A health system may never have consciously decided that a patient who can call four times should receive scarce capacity before a patient who cannot. Nevertheless, its access processes produce exactly that result. The consequence is a form of passive rationing in which capacity is allocated according to characteristics that may have little to do with the patient's need for care.
Deliberate Allocation
Recognizing this problem does not mean that every patient can receive every service immediately. There are finite numbers of clinicians, rooms, staff, and hours in the day, and some areas of demand will exceed available supply even in highly optimized systems. Addressing the limitations of friction as an allocation mechanism therefore requires more deliberate decisions about how existing capacity should be used.
Deliberate allocation considers clinical need and urgency, patient preferences about when, where, and how they receive care, and the health system's priorities for quality, growth, continuity, and resource use. The objective is not necessarily to create a centralized system for making every scheduling decision, but to establish allocation practices that reflect the criteria the system actually intends to value.
When demand exceeds supply, someone will bear the transaction costs associated with resolving that imbalance. Under many existing access processes, a substantial portion of those costs is borne by patients, regardless of whether they are in a position to absorb them.
Access as an Allocation Discipline
Capacity management frequently focuses on the amount of available supply, including template hours, appointment slots, utilization, productivity, and other measures of capacity. These measures are essential, but they provide an incomplete picture of access without an understanding of how capacity is being allocated.
Access leaders need to understand which patients receive scarce appointments, how competing demand is prioritized, which requests are redirected or delayed, and how much demand disappears from the observable system because the cost of navigating it has become too high.
This raises a fundamental measurement question: What is our true demand? Health systems have visibility into important portions of demand through scheduled visits, referrals, orders, and other observable activity, but the demand that never results in a completed scheduling transaction is much more difficult to quantify. Without a more complete understanding of the demand we are attempting to serve, access leaders cannot effectively allocate limited supply in a way that reflects clinical need, patient preferences, and organizational priorities.
Friction is already influencing how scarce ambulatory capacity is distributed. The challenge for access leaders is to recognize its role in the allocation process and determine whether the resulting distribution of care reflects the priorities of the health system -- or simply the ability of individual patients to navigate and overcome the friction.
The price of access already exists.
The question is whether we are willing to continue asking patients to pay it.