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A social systems model for the health services system serving the state of New Mexico is presented. Utilization of short-term general hospitals is viewed as a function of sociodemographic characteristics of the population and of the supply of health manpower and facilities available to that population. The model includes a network specifying the causal relationships hypothesized as existing among a set of social, demographic, and economic variables known to be related to the supply of health manpower and facilities and to their utilization. Inclusion of feedback into the model as well as lagged values of physician supply variables permits examination of the dynamic behavior of the social system over time. A method for deriving the reduced form of the structural model is presented along with the reduced-form equations. These equations provide valuable information for policy decisions regarding the likely consequences of changes in the structure of the population and in the supply of health manpower and facilities. The structural and reduced-form equations have been used to predict the consequences for one New Mexico county of state and federal policies that would affect the organization and delivery of health services.