This dissertation studies how physicians respond to incentives in terms of: their treatment choice, their geographical distribution in the United States, and their effect on health outcomes. To address this, I exploit micro-data from Medicare at a physician-procedure level. I then supplement this dataset with novel, granular data collected from physicians’ directories that follow physicians from their choice of medical school onward. Chapter 1 introduces the topic and presents an overview of the questions analyzed and results obtained throughout the dissertation. Chapter 2 analyzes primary care physicians’ response to fee-for-service pricing along the urban/rural divide. In particular, it first documents that primary care physicians provide more (remunerative) specialty procedures in less urban areas, where specialists are fewer; secondly, it analyzes how primary care physicians switch to the more remunerative procedures when their fees are increased. Chapter 3 develops a model of physicians’ location choices and uses it to explore the impact of policy changes (loan forgiveness and salary incentives) on the geographical distribution of physicians. Chapter 4 provides evidence on the impact of the physician workforce on health outcomes by exploiting the policy-set fees and the micro-data availability.