Objectives. Taiwan's annual national ambulatory care expenditure increased dramatically after the implementation of the National Health Insurance program (NHI). This research aimed to examine how the supply of physicians affect the use of ambulatory services in Taiwan. Methods. The study used the sub-regions in the health care network as the unit of observation from 1996 to 1999. Information about ambulatory care utilization was collected from the NHI medical claim database. Other related information was obtained from the Taiwan Demographic Fact Book published by the Ministry of the Interior. We applied multiple regression analysis with the fixed-effects model for the statistical analysis. The model examined how the supply of physicians influenced ambulatory service utilization after controlling for extraneous factors. Results. The research clearly demonstrated that the supply of physicians increased demand in ambulatory care after controlling for other factors. The results showed that an increase of one physician per 10,000 people increased the number of physician visits per capita by 2.43%, and the ambulatory care expenditure by 5.34%. The increase in the physician-population ratio accounted for 21.71% of the rise in ambulatory service expenditures from 1996 to 1999. The number of Chinese medicine physicians and the number of hospital beds did not significantly influence utilization of ambulatory medical care. Conclusions. After Taiwan implemented the National Health Insurance program, the increase in the number of physicians increased the utilization of ambulatory care at the sub-region in the health care network.
