This report reassesses recommendations made by the Council on Graduate Medical Education in earlier reports which had, beginning in 1992, addressed the problems of physician oversupply. In this report physician supply and requirements are examined in the context of a health care system increasingly dominated by managed care. Patterns of physician utilization (i.e., requirements) are compared under various assumptions, and the appropriateness of the earlier recommendations for graduate medical education are reassessed. The report concludes that current data support a goal of reducing first-year residency positions, and that 50 percent of the reduced number enter practice as generalists. A second section of the report examines patient care physician supply and requirements. The report notes that while the present U.S. medical system has the capacity to absorb many additional generalists, far fewer opportunities will exist for specialists. The text analysis is supplemented by several data tables and charts. Appendix tables list projected numbers of generalist and specialist physicians required. (Contains 24 references.) (CH)