PHYSICIAN INCOME AND PHYSICIAN SUPPLY

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 heal

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ce Demand Supply What the above basic analysis does not satisfactorily explain is (1) why physician income increased beyond the increase in demand for medical services that can be supported by demographic changes in the American population and (2) why physician income continued to increase in the face of an increase in physician supply that increased even more rapidly than did physician income. Thus, the research question investigated in this examination ["Why has physician income increased in the United States as physician supply has increased?"] is a valid question that is deserving of further analysis. In-Depth Analysis of the Problem A major problem with the basis analysis of the problem that was presented in the preceding discussion is that physician income and physician supply were considered as aggregate measures. In fact, however, the pattern of providing physician services shifted substantially from 1977 to 1994. In 1977, 42.4 percent of all physicians in the United States were primary care physicians, with the remaining 57.6 percent of physicians distributed across a wide variety of medical specialties. By 1994, however, the proportion of all physicians in t
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Approximate Word count = 2446
Approximate Pages = 10 (250 words per page)

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