Objectives: Between the Japanese Colonial Period and the 1960's there was an acute shortage of physician manpower in Taiwan. In the 1960's the government began actively supporting physician training program and establishing new medical schools. This has not only seen an end to the doctor shortage but is now gradually leading to ”over-supply”. This study looks at the ”supply and demand for physician manpower in Taiwan” and produces a set of projections for the health authorities to formulate physician manpower policy. Methods: This study makes use of the Grey Prediction Model based on the analysis of data between 1998~2006, namely the ”Number of physicians in Taiwan” published by the Taiwan Medical Association as well as the ”number of outpatients per year” and ”number of hospitalized patients per year” in the ”National Health Insurance Statistics Annual Report” from the Department of Health. Results: Based on the ”annual outpatient statistics”, the supply and demand imbalance percentage for ”physician Manpower in Taiwan” between 2007 and 2012 were 13.72, 16.69, 19.73, 22.85, 27.05 and 29.34 respectively; as for ”annual hospitalized patient statistics”, the percentages were 17.09, 20.94, 24.91, 29.02, 33.25 and 37.63. The study found that between 2007 and 2012 the ”Supply” of ”physician Manpower in Taiwan” was consistently greater than ”Demand”, with the imbalance expected to grow every year as well. Conclusions: The over-supply of physician manpower will lead to reduced job opportunities for physicians. This will not only affect physicians personally but also represent a serious waste of national human resources; The nation and society as a whole must therefore pay attention to proper physician manpower planning.