The purpose of this paper is twofold: First is to investigate the key features which characterize the patterns of growth and distribution of health resources based on a 1971-1988 longitudinal data set; Second, to consider the above-mentioned patterns as consequences of the interaction among governmental health policies, insurance payment scheme, and the existed hierarchy of health industry, and to examine how such institutional forces constitute an opportunity structure to influence behavior of hospitals and individual physicians. An analysis of the annual growth rates and average growth rates for medical doctor, hospital, private hospital, clinic, private clinic, hospital bed, and private hospital bed, reveals that the number of hospitals as a whole increase much faster than that of clinics, especially private clinics, to indicate a trend of bureaucratization in provision of health care. Hospitals by average become larger in terms of the number of beds as suggested by the fact that average growth rate for hospital beds is much larger than that for hospitals. Concerning the degree of dispersion, medical doctors are most unevenly distributed among regions as compared to other types of health resources, and have a trend of concentration over time. Hospitals and hospital beds are more dispersed and have a trend of dispersion, while clinics are in between in terms of degree of dispersion in 1988, however, clinics used to be least concentrated in 1971 and turned out to be much more unevenly distributed in 1988. This paper then indicates the inadequacy of "demand-supply model" in explaining the trend of growth and distribution of health resources in Taiwan. We argue that behavior of hospitals and health professionals are constrained to a large extent by the institutional environment of which they are in existance. Specifically, large scale hospitals benefit more from their niches in the health industry hierarchy under the operation of the health insurance payment schemes and governmental regionalization policy. The payment scheme also gave hospitals of various scales more incentive to expand. Medical doctors and private clinics were trapped into a chain effect of "medical schools, teaching hospitals, physician manpower, and clinics". Lack of rural experience due to personal background of medical students, contents of medical training, and an emphasis on specialty expertise leads to junior medical doctors practising at a higher cost at the rural areas, and thus consequently a more unevenly distributed trend over time for medical doctors and clinics is observed.