A social indicator model of the health services system serving the state of New Mexico is presented. The model specifies the causal relationships hypothesized as existing among a set of social, demographic, and economic variables known to be related to the supply and use of health manpower and facilities, and to the health status of a population. Inclusion of feedback into the model as well as lagged values of endogenous variables permits the examination of the dynamic behavior of the social system over time. Methods for deriving the reduced and final forms of the structural model are presented along with their equations. 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.