The potential impact of the increasing supply of physicians on physician behavior, the cost of medical services, and access to services is addressed in detail in this final research report. Econometric modeling and analyses of economic activity within the health sector were undertaken. An eight equation model of the hospital and physician sectors was developed, based on supply and demand principles. Forecasts are presented regarding: cost of physician and hospital services, total expenditures on hospital and physician services, real private insurance expenditures and government expenditures on these services, third party reimbursements, and out-of-pocket expenditures. It is suggested that in response to the increasing numbers of physicians, practicing physicians, hospitals, and third-party payers will compete. Attention is directed to forms of competition, likely approaches to reduce competition, and pricing behavior. The structure of the health care industry and the impact of physician behaviors (economic, political, competitive actions) on access to health care are covered. Concepts pertaining to access to health care are discussed, including allocative and technical efficiency and inflation effect. Finally, market imperfections and market failures are discussed. A bibliography is included and a technical appendix considers overall estimation results. (SW)