ABSTRACT
An internal inconsistency has developed in US health care policy that has led to a number of confounding issues affecting the physician supply. The political and institutional environment has created the context in which physician supply issues interact with financing. The American approach towards the financing of its health care system has led to the institutional dominance of the hospital in the nation’s health care delivery. During the course of the war, private health insurance coverage by employers for their employees had expanded by several orders of magnitude. The American Medical Association with the support of many in the business community had launched the largest campaign in its history to defeat Medicare in the early 1960s. One of the immediate effects of the new legislation, which included liberal funding for Graduate Medical Education, was the greater degree of financial freedom that it offered the country’s teaching hospitals, especially the top twenty-five research-oriented Academic Health Centers.
