No, this is reality. It does not matter if you're working under capitalism, socialism, communism, mercantilism, or some as yet unknown system since economics is the “study of the allocation of scarce resources which have alternative uses.” You cannot deny resource scarcity anymore than you can deny natural selection or gravity. To do so leads to a lot of tragic consequences.
> You don’t address shortages of healthcare, housing or food with an elegant and fair system to decide who starves and dies.
Food is an excellent example to use. In order to guarantee that no one goes hungry, or is well fed, or whatever metric you want to use how much food should be produced? Please find a way for this seemingly simple solution to not devolve into rationing by some mechanism.
> You expand supply to make sure no one has to. You examine supply chain and figure out the bottlenecks.
By expanding supply of healthcare you are taking resources away from somewhere else. Everyone can become a doctor and the nation will have very cheap and plentiful healthcare. Of course no one will be building houses, repairing roads, generating electricity, making MRI machines, refining helium, building the equipment to do the above, or countless other economic activities required for society as we know it to exist. There are limited resources, people, and time. You can’t do everything all at once.
> For example China has started mass producing MRI machines, that’s one way you adress a problem.
How do you know how many MRI machines you need? How do you know if you have too many? What about doctors, nurses, gloves, defibrillators, etc… Prices are actually a mechanism that communicates where more resources need to be allocated and where less are needed. What you’re talking about sounds more like central planning or some subset of it.