OBJECTIVES: To assess the effects of geographic diffusion of physicians from medically oversupplied toward undersupplied areas driven by economic competition among physicians and political interventions in Japan and US. METHODS: A quantitative evaluation of physician workforce changes at the community level between 1980 and 2005, using municipality-based (Japan) and county-based (US) census data. RESULTS: The overall number of physicians per 100,000 population (physician-to-population ratio: PPR) increased from 130 to 203 in Japan and 158 to 234 in US. In this context, a higher proportion (30.1%) of the quintile communities with lowest PPRs in 1980 has further decreased their PPRs in US than in Japan (21.6% in 2005). In multivariate analysis low PPR was a positive predictor of PPR decrease in the US communities (odds ratio 1.26; 95% confidence interval 1.01-1.58), while it was a negative predictor in Japanese communities (0.69; 0.57-0.83). CONCLUSIONS: Physician scarcity is associated with further scarcity in US communities, while scarcity is associated with recovery from scarcity in Japanese communities. Competition-based physician diffusion strategies and various interventions to address the maldistribution of physicians apparently have not worked effectively in US compared with Japan.