EDWARD EITCHES, Assistant to the Director

ing from the availability of physician services,it seems clear that the reduction in health-care ex-penditures (health-care income) to be had from a say 10percent reduction in the stock of physicians would bemanifold that to be had by reducing the net incomes ofthat stock of physicians by 10 percent. The implicationsfor cost containment policies are obvious (Uwe Reinhardt,pp. 42). [Emphasis added.] Wennberg's studies in Vermont and Maine have demonstratedthe potential outcomes from this system. Neighboring townswith comparable populations and insurance coverage display II As fringe benefits, employer-paid health plans are abusiness expense to the firm, and free of income or payrolltax to the employee. Employee contributions are alsopartially deductible from income taxes. ~I Judith R. Lave and Lester B. Lave.