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During the past decade, a confluence of forces has changed the practice of medicine in unprecedented ways. Anecdotal reports suggest that, in response, some physicians are leaving the practice of medicine or retiring earlier than they otherwise would have.We sought to examine how physician demographic characteristics, practice characteristics, and career satisfaction are related to physician decisions to leave the practice of medicine or substantially cut back their practice hours.Data for this study are from the first 2 rounds of the Community Tracking Study (CTS) Physician Survey, a series of nationally representative telephone surveys of physicians first conducted in 1996. Subsequent rounds of the survey included physicians sampled in the previous round, which allowed us to ascertain their career status 2 years after their initial interviews.Primary care and specialist physicians initially spending at least 20 hours per week in direct patient care activities were studied.Physicians cutting back their practice hours to less than 20 hours per week or leaving the practice of medicine altogether.Of the 16,681 physicians interviewed for whom we also had information about their career status 2 years later, 462 (2.8%) had retired and 499 (3.0%) had reduced time spent in patient care to less than 20 hours per week. In multinomial logistic analyses that examined both outcomes, full- or part-owners of practices were both less likely to retire and to cut back hours. Internal medicine specialists and psychiatrists were less likely to retire (odds ratio [OR] 0.69, 95% confidence interval [CI] 0.48–0.99 and OR 0.33, 95% CI 0.18–0.60 respectively) whereas surgical specialists were more likely to retire (OR 1.6, 95% CI 1.1–2.2). Physician satisfaction was strongly related to both outcomes. For instance, very dissatisfied physicians were both more likely to retire (OR 2.34, 95% CI 1.6–3.5) and cut back on their hours (OR 3.6, 95% CI 2.32–5.6).Our findings demonstrate that dissatisfied physicians were 2 to 3 times more likely to leave medicine than satisfied physicians. These findings have implications for physician manpower projections and quality of care.