Why there will be little or no physician surplus between now and the year 2000

Abstract

Most observers think that by the year 2000 there will be a considerable surplus of physicians in the United States. In this paper we present a new framework for estimating the future balance between supply and demand with respect to physicians' services. Our analysis suggests that even if competitive medical plans serve approximately half the population by the year 2000, there will probably be little or no physician surplus. Moreover, if a slight surplus should occur, it is likely to be largely erased by increased involvement of physicians in administrative activities and a variety of nontraditional clinical activities that currently occupy little of a physician's time. Our prediction of little or no surplus could be altered appreciably, however, by two forces that would have opposite effects: an acceleration of technological change would increase demand beyond our projections, whereas widespread rationing of beneficial services would constrain the demand for physicians' services.