 This chapter discusses the importance of physician supply issues in the evolution of U.S. health care policy. It first looks at the consequences resulting from the 0000 initiatives to provide financing of medical and other health professional schools. It then discusses the impact of the Medicare and Medicaid statutes on physician supply in terms of numbers, specialization, practice locations and incomes. Medicare provided multiple sources of graduate medical education (GME) funding to the academic health centers(AHCs) and other teaching hospitals to cover the costs of training and employment of residents. The chapter also discusses the factors involved in the expanding and changing character of the physician supply in the United States since the passage of Medicare.