In the 1950’s and early 1960’s, the United States maintained a fairly constant ratio of 141 physicians/100,000 people. In the 60’s, however, politicians began to worry that the supply of doctors would decrease in the near future. In 1963, Congress passes the Health Professions Educational Assistance Act (HPEA) in 1963. Senator Yarborough stated that the reasons for passing the bill were that “it was when we were trying to give more American boys and girls a chance to a medical education so that we would not have to drain the help of other foreign countries.” Later he states, “to me it is just shocking that we do not give American boys and girls a chance to obtain a medical education so that they can serve their own people.”
How has this bill effected the number of physicians in the United States? In 1980, the ratio of physicians per 100,000 citizens increased to 200 from 141 in 1960. In 1990 the ratio increased again to 230 and in 2001 the ratio reached 285, double what it was in 1960.
With the increase in physicians, we would expect to see that prices would decrease due to increased competition. This has not been the case. Besides the HPEA, additional causes for the increase in the physician to population ratio have not been clearly identified. Some possible suspects are:
the increased supply of physicians is simply a response to increased demand for health care,
an aging of the population–thus increasing demand,
an increase in the returns to becoming a physician, or
supplier-induced demand may be keeping physicians salaries constant despite an increase in competition.