PHYSICIAN INCOME AND PHYSICIAN SUPPLY: AN ECONOMIC ANALYSIS
This research examined why physician income has increased in the United States as physician supply has increased. This question was analyzed with data for the 1977-1994 period, as this period (1) reflected the substantial changes in both physician income and physician supply and (2) provided complete data for each of the variables prior to the time that managed care became the dominant force in health care delivery in the United States.
No anomaly was found between the actions of demand, prices, and supply in the physician care market for the 1977-1997 period and economic theory related to demand and supply when the data were considered on a disaggregated basis. The anomaly appeared only when the data were considered on an aggregated basis, wherein the true relationships between the variables were masked by the aggregation. In fact, physician income increased along with physician supply because of the emphasis on medical specialty care and the continuing increase in the demand for such care.
This research examines why physician income has increased in the United States as physician supply has increased. This question is analyzed with data for the 1977-1994 period, as this period (1) reflects the substantial changes in both physician income and physician supply and (2) provides complete data for each of the variables prior to the time that managed care became the dominant force in health care delivery in the United States. As a major objective of managed care is a reduction in the cost of health care services, the inclusion of data from the dominant managed care period would tend to distort the analysis of the relationship between physician income and physician supply during the period of the greatest growth in both physician income and physician supply (Goldman, 1995).
Average physician net income after expenses but before federal income taxes in the United ...