Recent increases in the supply of physicians and in HMO enrollment support the expectation of increased competition in the market for physician services. The indications of this increased competition, however, are unclear. Previous research relating physician supply to fees and utilization levels, has produced widely varying results. Research relating physician availability to other important characteristics of physician services (duration of visits, content of care, etc.) has been extremely limited, even though changes in these characteristics could clearly affect the policy significance of concomittant changes in fees and utilization levels. Research on how the growth in HMO enrollment impacts the predominant fee-for service sector, is also extremely limited. More generally, the value of available and relevant studies is diminished by the reliance on cross-sectional data or estimates with pooled data that do not adequately control for the characteristics of individual geographic areas. In the proposed study, data from the period of 1974-1982 will be analyzed to estimate the effect of both the increased physician supply and the increased HMO market share. In particular, we shall examine impact on: 1) fees for ambulatory visits and inpatient surgery, 2) the quantity of services used, and 3) the content of ambulatory care provided (including the components of """"""""primary care""""""""). Principal data sources will include: 1) Medicare Part-B billing files, 2) The Health Insurance Association of America's yearly prevailing surgical fee schedule, 3) The Health Interview Survey and 4) the National Ambulatory Medical Care Survey. Pooled time-series econometric techniques (e.g. fixed-effects and variance component estimators) will be applied. The results of this study are expected to have implications for federal policy in areas affecting physician education and residency training, physician distribution, physician payment and the development of HMO's.
