HMO growth and the geographical redistribution of generalist and specialist physicians, 1987-1997

Objective. To assess the impact of the growth in HMO penetration in differe nt metropolitan areas on the change in the number of generalists, specialis ts, and total physicians, and on the change in the proportion of physicians who are generalists. Data Sources/Study Setting. The American Medical Association Physician Mast erfile, to obtain the number of patient care generalists and specialists in 1987 and in 1997 who were practicing in each of 316 metropolitan areas in the United States. Additional data for each metropolitan area were obtained from a variety of sources, and included HMO penetration in 1986 and 1996. Study Design. We estimated multivariate regression models in which the chan ge in the number of physicians between 1987 and 1997 was a function of HMO penetration in 1986, the change in HMO penetration between 1986 and 1996, p opulation characteristics and physician fees in 1986, and the change in pop ulation characteristics and fees between 1986 and 1996. Each model was esti mated using ordinary least squares (OLS) and two-stage least squares (TSLS) . Principal Findings. HMO penetration did not affect the number of generalist physicians or hospital-based specialists, but faster HMO growth led to sma ller increases in the numbers of medical/surgical specialists and total phy sicians. Faster HMO growth also led to larger increases in the proportion o f physicians who were generalists. Our best estimate is that an increase in HMO penetration of .10 between 1986 and 1996 reduced the rate of increase in medical/surgical specialists by 10.3 percent and reduced the rate of inc rease in total physicians by 7.2 percent. Conclusions. The findings of this study support the notion that HMOs reduce the demand for physician services, particularly for specialists' services. The findings also imply that, during the past decade, there has been a red istribution of physicians-especially medical/surgical specialists-from metr opolitan areas with high HMO penetration to low-penetration areas.