THE DISAPPEARING DOCTOR : As Medicine Becomes as Concerned With Saving a Buck as Saving a Life, One Doctor Struggles to Preserve His Old-Fashioned Practice

There is a sequence of events that unfolds with regularity most weekday mornings in Montecito, the affluent hamlet of 9,000 that overlooks the Pacific Ocean just south of Santa Barbara. At precisely 8:30, a 44-year-old man in a wash-and-wear shirt and slacks emerges from his house, hoists a tan canvas backpack over his shoulders, climbs on his 20-year-old bicycle and begins pedaling down the private lane that leads from his home to East Valley Road. There he turns left, heading east. He glances with unhappiness at a huge half-built house--he’s appeared at county planning commission meetings to protest this neighbor’s proposed five-car garage. Pedaling on, he waves to familiar workmen, shopkeepers and pedestrians as he passes a telephone company switching station, a hardware store, a real estate office, an antiques store and the San Ysidro Pharmacy and Coffee Shop, where the chic locals taking breakfast at outdoor tables playfully shout questions--”Why can’t you afford a car?”--and offer thumbs-up signs, as if to a marathoner on his stretch run. Just past the pharmacy, he turns left on San Ysidro Road and cuts across a parking lot to a one-story, six-room wood-and-stucco converted house.

After a two-block journey, Dr. Anthony A. Allina has arrived at his office, ready for another day of work.

Usually, it is a full but not hectic day, for Allina has little taste for what he calls “assembly-line medicine.” He is a general practitioner, a category of the profession he chose largely because it provides the opportunity to counsel patients and hear what they have to say. Some of his patients are a mite quirky--healthy but convinced they are dying or freezing or otherwise afflicted. Some are in genuine need, although troubled mainly by anxiety or depression. A fair share have back pains or aching knees or viral infections that are quite real but defy effective treatment. All are able to talk freely, though, if they so choose, for the doctor keeps a white-noise generator in his waiting area to blur words spoken in the two private examination rooms. That is about as fancy a piece of equipment as there is in Allina’s office--he has no laboratory, not even an X-ray machine. By design, his suite more closely resembles a living room than a doctor’s office. My patients, Allina likes to joke, are more likely to check for dust than feel intimidated.

Here, in short, is what looks to be the portrait of a man doing exactly what he wishes. “If you see him pedaling along, you think he’s the happiest man in town,” one neighbor says.

Such a portrait is not complete, however. If the image of Tony Allina bicycling to his office represents a doctor who’s forged his own world, it also represents one who is clinging quixotically to that world while it rapidly disintegrates about him.

As the medical profession moves relentlessly toward systems involving prepaid care delivered by large corporations or groups of doctors, Allina has declined to participate. Last summer he withdrew from the health maintenance organization (HMO) that insures more than a quarter of the Santa Barbara market and once provided him with 20% of his patients. Even though the country’s population is aging, and senior citizens make up a quarter of his practice, Allina last year stopped taking new Medicare patients. Paperwork burdens, bureaucratic hassles and reduced fees all played some role in his decisions, but mainly he objected to both programs’ encroachment on his professional autonomy. Put simply, he did not wish financial considerations, his or others’, to influence how he treated a patient.

“I am increasingly anxious and disturbed about what it is like to be a doctor and a patient,” he explains when asked about this decision. “Patients are just pawns in a huge system now, and doctors are employees on an assembly line.”

Partly because of this attitude and partly because he, as a general practitioner, doesn’t perform the lucrative tests and procedures that draw big payments from insurance companies, Allina’s earnings are low for a doctor in an affluent community--under $50,000 in each of the past two years. Having boxed himself into a corner, he watches his potential pool of patients relentlessly shrink as more and more join HMOs or Medicare. Just how long, he asks himself, will I be able to continue my way of doing medicine?

Not for long--that much seems certain. The transformation of medicine has come with astonishing speed, much of it occurring in just the past five years. After watching health-care costs increase 10% to 20% annually, after watching the nation’s total health bill approach $600 billion a year, after watching physicians fail to police themselves, after watching patients make excessive demands, those who have footed the ever-increasing bill--governments, insurance companies and corporate employers--have simply seized control of the ballgame. The traditional doctor-patient relationship, in which patients go to physicians and hospitals of their choice and doctors order tests and bill as they see fit, is gradually disappearing. This erosion of unfettered fee-for-service health care began in 1983 when Medicare started paying hospitals and doctors predetermined rates based on diagnoses, not on the treatment rendered or the length of the stay. Rules arose about when a patient could be hospitalized and for how long. Then limits were placed on tests ordered, medicines prescribed, services delivered. Doctors’ fees were limited to what Medicare deemed reasonable and customary. Soon the private insurance companies were following the government’s lead, setting up oversight boards, review committees, utilization panels and fee caps. When all that did not contain costs, more and more corporate employers began switching their health-care coverage for employees to even more tightly managed plans.

One type involved preferred physician organizations, PPOs, in which patients could go only to certain doctors who’d contracted with the health plans to provide services for discounted fees. Another involved HMOs--prepaid group health plans that, for a fixed monthly sum per patient, agreed to deliver all needed medical care to enrollees but retained the right to determine which treatments were truly needed and where they could be obtained. The traditional HMO employed its own full-time, salaried physicians to provide medical services in a central location, but many newer HMOs have simply contracted with outside physicians or groups of physicians to provide care for the plans’ enrollees in the doctors’ private offices, alongside non-HMO patients. The trend toward such plans has snowballed. More than a quarter of the country’s population is now covered by either an HMO or a PPO; there are some 37 million people enrolled in HMOs alone, almost 14% of the population and double the level in 1984. California, with 29% of its insured population in HMOs, has led the way.

Doctors, like it or not, have had to follow that patient base. Many have taken jobs at clinics or health-care companies or hospitals. In 1989, for the first time ever, more doctors in this country were working as salaried employees than were operating their own practices. Others have retained their private offices but banded together in loose associations, which in turn have contracted with employers and insurance companies to provide services, either on a discounted fee or prepaid per-patient basis. Plenty of doctors are bucking the trend, particularly those with affluent patients able and willing to pay their own way, but the pattern is apparent. Leaf through the most sober medical journals these days, and you find much the same prediction time and again: The private, autonomous primary-care physician such as Tony Allina, calling his own shots in the interests of his long-term patients, is doomed. Depending on the community and the circumstances, health-care experts estimate, such doctors might make it for another five years, or 10, or maybe even 15. But they cannot last. “The physician who desires to hold on to the traditional notions of the physician-patient relationship might very well find that this requires battle with windmills,” is how one article in the Journal of Legal Medicine put it.

The result of all this is bitter disenchantment in a profession that is customarily regarded both as prestigious and financially rewarding. It’s evident in surveys of doctors--almost 40% now usually tell pollsters that if they had to choose a career again, they’d definitely or probably not enter medical school. Inviting doctors to discuss their profession these days is guaranteed to unleash a flood of grievances.

The first time I felt the direct force of this unhappiness, I was sitting in my own doctor’s office. Dr. Kenneth Matsumoto, a Beverly Hills internist, has been my physician for 22 years, a circumstance I’d more or less taken for granted until my employer recently began considering changes in its health plan, changes that might make it difficult for me to continue seeing him. Only then did I start giving thought to a certain change of mood and pace that had colored Matsumoto’s office in recent years. I recalled that once, some time ago, he’d called me, agitated, to denounce the latest twist in the Medicare rules. Another morning, as I was leaving, he’d tossed me a long article torn from a professional journal--”Medicine: The Death of a Profession” was its title. Most recently, I’d noticed 14 cardboard boxes stacked against the wall in his office. Eventually, I realized that these were all signs of a staunch holdout, of a doctor who was refusing to join an HMO, a PPO, a clinic or any sort of group whatsoever. Although he still has a large practice and a healthy income, Matsumoto has lost 15% of his primary-care patients in the past five years. A fair share of the 14 cardboard boxes lining his office wall contain files of patients who have recently left his care. The farewell letters and calls he receives all have a familiar ring. My company has changed health-insurance plans, they begin. I now have to go to a doctor in an organized group. Could you recommend one from this list?

“Everything is bottom line and profit today,” Matsumoto said when I told him that soon my file might be in one of those boxes. “How do you bill Medicare or one of the groups for two hours of thinking about a patient’s condition, especially when maybe you don’t get an answer? There are no procedure codes for thinking about your patient. I am so concerned about what all this is doing to the philosophy of medicine.”

My talks with Matsumoto in time led me to other doctors, and to similar expressions of discontent, and finally to Santa Barbara, where I had the notion of looking at how all the changing conditions in medicine had played themselves out over the past decade in one relatively small, confined community. What I found there was a health-care scene that has been transformed by the arrival of a single, powerful HMO, Health Net, the second largest in California. I found doctors who have adapted happily to the changes and doctors who have adapted but not so happily. And I found doctors such as Tony Allina, who refuse to adapt.

Profile of a dying breed, profile of an anachronism. That was how I cautiously explained to Allina my interest in writing about him. I thought he might take offense at such a description, but he did not. “That’s what I am,” he said. “A dinosaur.”

THERE WAS A TIME, just 10 years ago, when doctors in Santa Barbara County considered it improper to compete for patients. Some 350 physicians practicing in private offices co-existed in relative peace with about 200 doctors who practiced as partners in one of two large, shared facilities, the Samsun Clinic and the Santa Barbara Medical Foundation Clinic. By dint of their size, the clinics wielded a certain influence, but in essence they were simply large doctors’ offices, open to all patients on a fee-for-service basis; they did not offer their own health plans. When one of the clinics wooed private practitioners’ patients, the independent physicians would not hesitate to write letters to local professional journals suggesting that the two organized groups in town were “disturbing our patient relations.” It’s fair to say most doctors did not then possess a sophisticated appreciation for the changing times--terms like “targeting markets” and “competitive products” were as yet a foreign language.

This was the world Tony Allina entered when he first hung out a shingle in 1978. By then he’d developed a particular interest in the relationship between physical health and emotions. Early in his career he managed to link an elderly woman’s unexplained diabetes flare-up to stress caused by a recent doubling of her rent. One morning he provided relief to a patient with mysterious pelvic pain by teaching her autogenic training, a form of biofeedback without machinery that he’d learned from a psychologist. If Allina’s waiting room was often empty in those early years, he at least had the type of practice he wanted. He spent up to a hour with each patient, and billing was informal--handwritten, amusing, personal notes from Allina’s wife, Rebecca. Although he must have had some dealings with insurance companies, they apparently were unintrusive ones, for Allina does not remember them.

“Every time I walked into the examination room in those days, it was a new opportunity to use my healing techniques, my mind, my tools,” he recalls. “I had three to five patients a day--as busy a day as you could have. Most of the patients I was seeing had complicated problems.”

The signs of the coming change were isolated and gradual--a patient here and there asking that his or her file be transferred to the Santa Barbara Medical Foundation Clinic. At first, Allina was not concerned. But in talking with other area doctors during the early 1980s, he found they were losing even more patients than he. The trickle had become a flow.

Health Net, an HMO based in Woodland Hills, was making its presence felt. Then a separate division of Blue Cross of Southern California, now an independent company with some 750,000 enrollees in California, Health Net was of the new breed of HMOs that contracted with outside doctors rather than operate its own health-care facilities. It had established a beachhead in Santa Barbara in 1979 by signing an exclusive contract with the Santa Barbara Medical Foundation Clinic to provide care for Health Net members on a fixed, prepaid, per-patient basis. At first, the HMO’s presence had been little more than a curiosity, but soon enough, helped by aggressive marketing, it had started to grow. First one, then another large employer in the area--Raytheon, the University of California, Delco, Martin Marietta--began offering Health Net to employees as one choice among other health plans. It proved to be a popular alternative, not the least because its premiums were cheaper than most other plans, about $67 a month per subscriber.

From a relative handful of Santa Barbara County members in 1982, Health Net quickly grew to more than 20,000. By 1985, some local independent doctors had lost 20% or more of their practices to the HMO. There was, meanwhile, talk of Blue Cross launching its own local HMO and of Medicare shifting entirely to some form of a prepaid, per-patient group program. Both, it was assumed, would contract with the Santa Barbara Medical Foundation Clinic to provide services, since it was organized, experienced and had elaborate facilities. In the face of all this, it’s not hard to see why the once-friendly mood within the Santa Barbara medical community in time grew strained. The town’s independent physicians were no longer colleagues but competitors with those who practiced at the clinic. The battle had to be joined.

“We were starting to bleed,” one prominent independent physician says. “It was immense and quick. We were losing patients we’d known for a long time. You look around for who’s left, and the room is pretty empty. Our emotions, in order, were fear, anger, disappointment--and then a sense of reality. Doctors are not trained as businessmen, but some of us were interested in these elements. After the anger and fear wore off, we started to see what could be done to recover.”

To compete with the clinic and cut their own deal with various insurers and HMOs, the independent Santa Barbara doctors somehow had to band together, at least on paper. An early effort was California Preferred Providers Inc., essentially a “clinic without walls” that enabled the private doctors to negotiate discounted fee schedules directly with insurers, unions and local employers. Allina hesitated but joined--”It was an alternative to Health Net, and it was a way to keep my ear to the pipeline,” he explains. Another effort was the Cottage Independent Physicians Assn., which was pursuing not discounted fee-for-service arrangements but its own contracts with HMOs and Medicare to provide prepaid, per-patient health care. In the fall of 1986, that’s just what it got. Health Net, reaching beyond its exclusive arrangement with the Santa Barbara Foundation Medical Clinic, forged a second deal with Cottage IPA. Health Net enrollees now could choose to see doctors at the clinic or any independent doctor who was a member of Cottage IPA.

Allina was not entirely unprepared when he began receiving letters inviting him to join Cottage IPA. By then, he’d been inundated--in bulletins, meetings and private conversations--with dire warnings about HMOs’ imminent claim on 40% of the market. Private physicians, the newsletters kept advising him, had to offer “competitive products” and be “packaged in many forms.”

At a meeting on Sept. 10, 1986, Allina listened as Cottage IPA organizers and a Health Net vice president explained how it all would work. Health Net would pay Cottage IPA about $30 a month for each Health Net member who chose a Cottage IPA physician as his primary-care doctor. Of that amount, Cottage IPA would pay one-third--about $11 a month per patient--to each primary-care physician, who in exchange would provide all basic medical services, regardless of how often the patient sought care. The primary-care doctors would also serve as “gatekeepers,” deciding when to request approval from Cottage IPA’s utilization review board for more sophisticated tests and procedures and referrals to the group’s specialists. Cottage IPA would pay its specialists on a fee-for-service basis and would budget 40% of its fixed payment from Health Net for that purpose. If Cottage IPA kept to its budget for specialists, it would do fine. If it went over budget, it would have problems.

In other words, the financial risk of skyrocketing health costs would be partially shifted from employers and insurers to the doctors who actually made most of the medical decisions. When Cottage IPA primary-care physicians considered whether to order tests or make referrals, they would have to weigh their financial condition along with their patients’ needs. Where once doctors had a financial incentive to overuse the system, they now had a financial incentive to underuse it.

Allina wavered. He no longer was running such a small-time operation--during the early 1980s, his practice had grown as he became better known among the young, affluent families of Montecito. With insurance and Medicare forms requiring knowledge of complicated diagnostic and procedural codes, he’d found it necessary to hire a full-time clerk--his wife’s handwritten notes no longer would do. His revenue had to keep pace with his mounting overhead. Health Net, now with more than 30,000 local members, looked promising.

“I was starting more and more to focus on the business of medicine,” he recalls. “I resented this, but I had to. The feeling was I better get on the wagon, that if I didn’t, I’d get left in the dust. I also thought it might not be so bad. I talked it over with other doctors. They said, ‘Let’s see, maybe it will be OK.’ So I decided to give it a try.”

FOR ALMOST TWO YEARS, it wasn’t so bad--Allina did not feel at all compromised. When he referred Health Net patients for tests or consultations, they got them. He could afford to see his HMO patients often and at length, because the fixed fee he received each month was generous. In fact, after some calculation, he realized that the payments he received for these HMO patients were larger than what he’d get if he were billing them fees for service. In 1987, his first year with Cottage IPA, Allina’s gross income jumped from less than $140,000 to more than $170,000, his net earnings from almost $50,000 to more than $70,000.

The entire enterprise seemed to be flourishing. By the end of 1987, Cottage IPA doctors were treating almost 2,000 Health Net patients, and by the end of 1988, almost 8,000. Soon enough, HMO patients were accounting for up to a quarter of the Cottage IPA doctors’ practices. The biggest problem was a three-month backlog of unpaid specialists’ bills, the result of a booming business overloading a limited claims-processing system. If they’d had “some bad luck”--as a Cottage IPA newsletter described the birth of premature twins who’d required 119 days in a hospital intensive care unit--they’d been able to absorb that burden with only a $60,000 loss. “It looked charming,” said Dr. Dan Secord, Cottage IPA’s president. “We thought we had the world by the tail.”

It would take months before the doctors came to realize they were spending far more money than they were receiving from Health Net. Only when an outside claims-processing firm opened the piles of boxes sent it by Cottage IPA, and paid off all the past-due debts, did it become apparent that the doctors’ organization had lost $348,000 in 1988 and almost $500,000 in the first eight months of 1989.

Later, Cottage IPA doctors would offer a number of explanations for their misfortune, some related to their own mismanagement, some to Health Net’s marketing ploys and low payments. But it’s fair to say that the doctors basically had been naive about the fundamental concept behind Health Net’s plan, and the HMO system generally. Cottage IPA doctors hadn’t fully embraced the notion that to survive financially on Health Net’s fixed payments, they had to restrict their patients’ use of tests, procedures and specialists. Allina had found no restrictions to his practice because there were none in those first years; the utilization committee routinely approved most of what came before it. Specialty care, allotted 40% of Health Net’s payment, was claiming closer to 55%.

“The gatekeeper role was hard,” says Dr. George Weston, Cottage IPA’s former medical director. “Patients come in, say they want to see a physical therapist or a psychiatrist or a dermatologist. It was a very difficult role to say no. We never played it before. We had no paid management. We were amateurs running an $8 million to $10 million operation. We didn’t know it was a bad deal.”

Soon enough, the freshly enlightened doctors began to adapt to their new world. In June, 1989, Allina received a newsletter signed by the Cottage IPA board of directors. “Over the past several months it has become apparent that the Cottage IPA is having a problem with over-utilization,” it began. “At the present time, it appears that our incurred expenses are exceeding our income by approximately 10% to 15% each month. . . . Until recently, Cottage IPA has been very lenient regarding referrals for specialty and ancillary care. This policy has now been changed. The Utilization Review Committee has instituted and will enforce strict regulations regarding referrals.”

Two months later came an even harsher newsletter. “At the present time,” it read, “our expenses now exceed income by nearly 20% or nearly $50,000 per month. . . . To protect the financial viability of Cottage IPA, the Board of Directors has had to institute some rather extreme measures. These consist of newer, more strict regulations regarding referrals for specialty care and a decrease in reimbursement to our providers.”

From there the exhortations cascaded. Newsletters that Allina received increasingly talked about the “financial implications” of doctors’ “practice habits.” At a Cottage IPA meeting one night, Allina listened as a speaker went on at length about “rationing” health-care services and distinguishing between patients’ “desires and needs.” Emphasis had to be placed on “the judicious utilization of services” and “not just philosophical goals of the traditional primary-care physician.” Doctors who practice “cost-effective medicine” should be “recruited and rewarded,” and those who do not should be “discontinued.” Doctors who object to the gatekeeper role should be “weeded out.”

During this time, Allina also began receiving official notices from Medicare that sounded similar themes but in less abstract terms. One day a Medicare form letter arrived, announcing that a $10 blood-sugar test he’d administered to a patient with diabetes was “not reasonable and necessary.” Allina sent copies of his indignant response to his congressman and the California Medical Assn.: “This service, a fasting blood sugar, on a diabetic just started on insulin is certainly necessary,” he wrote. “I demand a review. . . . I also insist that you send a letter of apology to my patient. I expect a written response to this letter and not a form letter.” In return he received another form letter denying the test. “Blood sugar determinations are REQUIRED to monitor diabetic patients,” he wrote back. “Please stop sending these ridiculous notices!”

He eventually won that battle, but months later Medicare sent another notice, this time saying that Allina’s two $66 home visits to a 91-year-old semi-comatose woman suffering cardiovascular and musculoskeletal collapse due to kidney infection were “not justified.” Allina began his response calmly. “When I first saw this patient . . . she was nearly dead,” he wrote. “I do not feel the services were unnecessary.” By his third letter, he was fuming: “The patient was moribund, hypotensive and semi-comatose. How you can reject a claim for medical services in this situation is mystifying. If you do not reverse this decision and send an apology to myself and my patient . . . I will be sending copies of all these correspondences to my lawyer, the California Medical Assn. and appropriate political representatives demanding a reversal.”

What was once a vague uneasiness on Allina’s part about the changing face of medicine had solidified by then into disenchantment. He’d always thought of himself as a conservative practitioner, even a minimalist. He believed he regularly performed an appropriate gatekeeper role with his patients, based on his own judgment. But now there was this coercion from the group. The one way suggested good medicine to Allina, the other the work of a comptroller.

Questions he wrestled with daily took on an added complexity. Should he send the woman with unexplained neck pain and a tender thyroid to an endocrinologist or put her on antibiotics? Should he order X-rays to see why the teen-age girl’s leg fracture was still hurting after three years? One day, when a patient came to him describing symptoms of anxiety and depression, Allina found himself prescribing the antidepressive drug Prozac instead of referring the man to a psychotherapist, even though he felt that wasn’t dealing with the core problem.

“I was functioning as an agent of the organization as much as a healer or advocate of patients,” Allina says. “I felt I had to stand between patients and some of the more costly medical care that might benefit them. For example, a person comes in with a cough and fever. I listen to his lungs, it sounds like pneumonia. There are two approaches I can take. I can take a sputum culture, do a microscopic exam of it, give the patient antibiotics and wait for the results. Or I can take a chest X-ray, complete blood count and blood culture, and hospitalize the patient. Or I can do gradations in between. It is an ambiguous, uncertain area. The tendency, given the IPA’s pressure, is to wait. There are likely to be times, doing this, that you’re going to make a mistake and fail to put in the hospital someone you should have. You are going to put someone’s life at risk.”

Feeling he’d lost his role as advocate, Allina soon enough began sensing that he instead was the patients’ adversary. Sitting across from them, he saw that exchanges that once were healing consultations now sometimes became arguments over services he had not allowed. The most disturbing moment came when a 25-year-old woman who’d recently had a biopsy and mammogram for a benign breast lump wanted more tests; when Allina denied her request, she told him he was withholding necessary care. This patient ended up not only transferring to another doctor but also sending Cottage IPA directors a full-page letter denouncing Allina--”He was not interested in following up on one of the patients for whom he had primary care. . . . His obvious lack of concern for this patient has made it impossible for me to see him further.”

Months later, Allina would still thumb through his files and stare at that letter. “This was not what I’d expected when I got into medicine,” he says, holding the letter before him. “Of course, you could say that life generally is not what we expect.”

COMPLEX IS the buzzword usually invoked by people discussing the matter of health care in this country today, and for good reason. The lines between cause and effect, victim and villain, tend to blur. Doctors, for instance, have benefited greatly from the third-party involvement that now causes them so much grief. Medicare’s arrival in 1965, and the gradual expansion of private fee-for-service plans in the following years, ushered in a two-decade-long golden era for physicians during which their practices mushroomed while they successfully resisted any form of outside regulation. People who once hesitated to visit doctors unless seriously ill now started to come regularly--Matsumoto saw his practice quintuple among patients over 65. With the patients’ rising expectations came an increasing pressure on doctors to order sophisticated tests and an ever-present threat of malpractice suits against those who did not. Health-care costs, consequently, rose not just because of the expensive, newly evolved high-tech procedures but also because both doctors and patients were insulated from the true expense. Someone else was paying the bill.

Medical costs, which have doubled in the past decade, are expected to double again by the year 2000, to $1.5 trillion annually. Health-care costs rose 21.6% in 1990 alone, even with strong cost-containment measures, and claimed 26% of the average company’s net earnings. Such skyrocketing expenses are one reason why some 35 million Americans cannot afford or do not qualify for any health insurance. Clearly, trade-offs and rationing and low-cost health care are necessary; not everything that’s available can be provided to everyone, and human lives must be balanced against economic cost.

Every doctor I spoke with readily acknowledged that much, even while complaining about the way such circumstances have affected their lives. Most even agreed that doctors and patients had largely brought the present circumstances on themselves. Over and over, I heard stories about patients who’d angrily left doctors because they wouldn’t approve certain tests and procedures, and surgeons who’d opened up patients mainly because they had liberal insurance plans. I was told about doctors making millions by running Medicare clinics or kidney dialysis mills, and of orthopedists recommending surgery because of their outsized mortgages. I was told about the “worried well” patients who endlessly travel a circuit of doctors, insulated from the cost by private insurance or Medicare, which together now pay for roughly 79% of all health costs. When I visited Health Net’s headquarters in Woodland Hills, its medical director, Dr. Leonard Knapp, groaned about his perpetual need to close “loopholes” and serve as “broker” between doctors “gaming” the system and patients clinging to unreasonable expectations.

Spending a week in the office of my own physician, Matsumoto, looking to document his fights against the restrictive measures of Medicare and third-party payers, I mainly saw his struggle to keep patients from overusing the system. An older woman on Medicare who’d already been to six other doctors about her shoulder pain wanted Matsumoto to take another look; a younger man was convinced he had stomach cancer despite normal results from a battery of X-rays, CAT scans and gastroscopies; an 87-year-old with a vague numbness in his foot wanted an array of procedures, even though his circulation and muscle strength were normal. Let’s let it go, let’s let nature take its course, Matsumoto would tell them as they shuffled out, often as not on their way to try another physician.

It isn’t hard to see why some doctors, including many connected with Health Net and Cottage IPA, are not nearly as concerned as is Allina about ambiguous decisions and dual roles. “We have to tighten belts and make hard choices,” Dr. Dan Secord says. “The successful management of a (prepaid) plan requires being extremely cost-effective and conscious. You may not provide everything that is out there. Certainly, there are ambiguities. Plus there are litigious patients, malpractice threats. But we must do this.”

Dr. James Shaw, Cottage IPA’s chief financial officer, thinks it’s good for doctors to quit the HMO if they find the gatekeeper role uncomfortable. “Managed care is not for every doctor or patient,” he says. “But I don’t mind being a gatekeeper. There are only a few gray areas, not many. It’s usually mental health and physical therapy issues where there’s lots of agonizing. Back pains, things like that. Not when you have lung cancer. In most cases I’m usually sure of my decision. There is a conflict of interest, no doubt. We do have a financial interest in limiting care. But I do have a conscience. I don’t think this limits the quality of health care.” Knapp at Health Net puts it directly: “Doctors are not used-car salesmen.” All the same, it was easy to find some doctors in Cottage IPA who share Allina’s concerns. One of them is the former medical director, George Weston. “When we started cutting down on the use of specialists, we started taking more risks,” he says. “There’s lots of judgment involved. You say no to a request for an ophthalmologist, and soon enough the optometrist will miss something serious. You say no to 99 requests for a dermatologist, the 100th one may have a cancerous lesion. There’s a lot of waste and over-utilization, but not all. You are slicing lean meat, not just fat. You have to affect the quality of care. We’re pressured by utilization boards and low fees and competing marketers. The market has forced this.”

It is not possible in this kind of exchange to sort out who is right or wrong, of course. The matter turns on specific cases, after all, and is clearly more a tangle of nuance and interpretation than of absolutes. For every complaint I heard about the gatekeeper role, there was a reminder that HMOs such as Health Net encourage preventive health care and allow annual physical exams. For every string of cautionary anecdotes I heard about cost-cutting policies, I found a study that says HMOs and Medicare cutbacks haven’t much affected the quality of health care. And yet, for every such study I read, I also found researchers acknowledging their limits and complaining about a dearth of measurable data. After weeks of listening and watching, what I thought mostly of, going over everyone’s comments, was a story offered by Secord as I was leaving his office. It seemed he’d hurt his knee while skiing up in Whistler, north of Vancouver, and had had it treated without fancy tests in a local doctor’s office, mainly because there was only one magnetic-resonance-imaging machine in all of British Columbia. But when he’d returned to Santa Barbara, he explained, he’d gotten a MRI test “because my buddy runs the machine. I could have done without, but I wanted to see what was going on in there before they did arthroscopic surgery.” A patient, in other words, is much less likely to embrace uncertainty and rationing than is a doctor or a health-care administrator.

All the same, patients probably will have to do just that in the future. Whatever the permutations and shakeouts still to come, some sort of sea change is looming both for doctors and patients. The doctor-patient relationship, once based on a trust on the patient’s part that the physician would do what was best for him or her, is being transformed into a contractual business relationship in which the physician provides a specified, measurable service at a negotiated price. If you are willing or able to pay more, you can get more--this is what’s meant by a “multitiered” health-care delivery system. “Who is to make the final determination whether I should stay with my patient all evening in the Cedars-Sinai emergency room?” Matsumoto asked me one morning, complaining about a Medicare ruling that had denied him payment for five hours of tending to a critically ill woman with an uncertain diagnosis. However unpalatable to some, the answer is apparent: those paying the bill.

BY THE END OF 1989, Tony Allina was fed up. His letters to Medicare and his congressmen were multiplying. So, too, was his paperwork for Cottage IPA--its ever-tightening restrictions on tests and referrals meant more forms, more denials, more appeals, more telephone calls. Meanwhile, patients waiting for decisions were showering Allina’s office with telephone calls, until his receptionist’s workload had increased tenfold and he found it necessary to hire a second clerk. Everything had to be processed through him, even when the patient had been referred to a specialist.

And just as his costs were climbing, Allina’s income from the HMO was dropping. In the fall of 1989, out of financial necessity, Cottage IPA had cut the per-patient monthly fee to primary-care physicians from more than $11 to just $8. Eventually, Allina began losing money--$1,000 in one particularly bad month, he calculated. Spending time talking and listening to patients was now something Allina could not afford to do. When considering whether to hospitalize a patient, he couldn’t avoid thinking that if he did, he’d have to visit him--a full-hour round trip, minimum--without getting paid anything extra. He came out ahead only if he didn’t treat patients very often, or in much depth.

“I spend lots of time explaining things to patients,” Allina says. “I’m slow. I spend time trying to get to know patients. But then I was very happy just to have them come in, get a throat culture, penicillin, goodby. I couldn’t afford more. It was a business. And I wasn’t enjoying it. As I would sit talking with such patients, I would think: This is a money-losing activity.”

The experience that most forcefully influenced Allina’s attitude began when a 78-year-old man appeared in his office one morning complaining of feeling weak and tired. A complete physical exam in the office yielded nothing unusual, but a standard blood panel showed low thyroid activity. Allina prescribed a thyroid medication, then hesitated. The test results also showed a below-normal level of albumin, an integral protein in the blood and tissues. Allina believed something was wrong, but he did not know what. Low albumin was a measure of inadequate intake of protein, or reduced production of it by the liver, or overuse of it within the body, so it suggested a wide range of possibilities--deficient diet, liver disease, problems with absorption of food, infection or any form of malignancy. But the patient’s liver function and white-blood-cell counts were normal, and older patients’ lab tests can yield off-readings sometimes. Given the parameters of the Cottage IPA system and the absence of a diagnosis, Allina didn’t know what specialist or test to order short of a full-scale exploratory workup. He thought of sending the man to an internist for another opinion, as he would with non-HMO patients, but he believed such a referral for this Health Net member would be denied by Cottage IPA, since its internists were all primary-care physicians themselves.

Something’s wrong, Allina told his patient, but I don’t know what’s causing it. Let’s wait two months, and I’ll check you again.

Allina never got the chance, for the patient instead visited an internist outside the Health Net plan. By then he’d developed some numbness in his left hand, and a CAT scan and other tests revealed a tumor growing in his neck. The diagnosis would have been difficult before the numbness developed, but the unhappy patient nonetheless withdrew his entire family--including his wife, daughter, son and grandchildren, all longtime patients--from Allina’s practice. The wife called one day and simply asked for their files to be transferred to another doctor.

“My inability to make a diagnosis made him lose confidence in me,” Allina says. “And I agreed with the man. He made the right choice. That’s what made this so onerous to me. The primary-care provider cannot be your advocate when he is the gatekeeper for a doctors’ organization.”

Allina wavered for months. He knew that if he dropped out of Cottage IPA, he’d lose patients--but by then he knew few by name anyway and had to rush through his visits with them. He’d be letting down his colleagues--but his practice had lurched far from his original notion of close, personal medicine. He’d lose valuable sources of income--but it had never been his primary goal to make money, and he knew he could survive without a large income because he’d made some investments and had chosen to live simply. He owned a spacious home in an affluent community, but it was bought relatively cheaply years ago, and sitting in its driveway was nothing fancier than a 5-year-old Honda Accord.

Allina backed away from the federal government first, deciding two years ago to stop taking any new Medicare patients. “When Medicare referrals call, I refuse them,” he said. “I explain it’s because of the Medicare system. This is part of my protest. I ask them to write letters.”

Then, last July, Allina completed his retreat by writing a letter of resignation to Cottage IPA. When his departure from that organization became official on Oct. 17, Allina lost nearly 20% of his practice and a guaranteed monthly payment of more than $800, which is a fair share of his office rent and a not insignificant amount of money, considering his income level. Allina’s net earnings, ranging between $50,000 and $70,000 in the previous three years, had always placed him at the lower range of general practitioners’ incomes. But because of the increased overhead and lower Cottage IPA payments, 1989 had proved to be even less lucrative than most, and his income fell below $50,000. Without new Medicare or Cottage IPA patients, his income in 1990 declined yet again.

Just what meaning Tony Allina’s act of resistance has beyond his own world is hard to say. He’s not the only one to quit--from a high of more than 220, the number of Cottage IPA doctors has fallen to 135--but Cottage IPA doctors continue to treat about 7,000 Health Net patients. The Santa Barbara Medical Foundation Clinic, with more than 30,000 Health Net patients, flourishes. Overall, about 85% of Santa Barbara’s insured population is in either an HMO or a PPO, and very few major employers are even offering the option of an unregulated fee-for-service insurance plan any longer. For Health Net, dominating the region with more than 40,000 members, there is an abundance of doctors willing to take Allina’s place, not the least because there’s a relative glut of physicians compared to 20 years ago. Younger doctors across the country seem particularly amenable--40% of male doctors and 60% of female doctors under age 35 are working for HMOs.

If the battle being fought by doctors such as Tony Allina appears futile, it also may be seen as irrelevant. In light of those millions without any medical insurance, it could be argued that what’s needed is not the preservation of independent physicians partial to close patient relationships but a system that can deliver basic health care to vast numbers at low cost. There is a role, in other words, for bare-bones HMOs, even if their services are limited. Private, autonomous medical advocates might be a luxury only the most affluent can afford.

Allina and the other doctors I spoke to were well aware of these considerations, and they did not entirely dispute them. Asked what was being lost in the present transformation of medicine, most, rather than overstating the case, had difficulty putting their thoughts into words, referring vaguely to “a change in philosophy” and “the value of intangibles.” Theirs, finally, is more a lament for a vanished past, for a loss of what once was valued and rewarded in medicine, than a call for a particular course of action now. “If we turned the clock back, lots of people wouldn’t get needed medical care. There is no solution. I just wanted to vent my spleen,” Matsumoto said to me at the end of our week together.

For the time being, Tony Allina’s finely ordered world remains intact, the forces of change held at bay. Allina generally sees 15 patients a day, nine or 10 of them briefly, the other five or six for longer periods of up to an hour, which is about two-thirds the load of his fully active colleagues. At 12:30 or 1 p.m., he pedals home and joins his wife, Rebecca, for lunch. At 3 p.m., if it is Wednesday or Friday, he plays tennis a half mile away at the Knollwood Tennis Club, an activity that also occupies much of his weekend. When there is the need, he makes hospital rounds. By 6 p.m., he has seen his last patient for the day, and is at his desk finishing paperwork. Unless there are house calls, he returns home by 7 p.m. and plays with the family’s dog, Nellie, for a few minutes before dinner is ready. Most evenings he spends helping his two daughters--Crystal, 12, and Amy, 16--with their homework. He is in bed by 10:30.

It is only occasionally, quite infrequently, in fact, that Allina awakes in the middle of the night, torn by conflict over the path he has chosen. Then, in those rare moments at 4 a.m., staring at his bedroom ceiling, he wonders: Has he made the right choice? Or is he tilting at windmills, failing to adjust to a changing world? His answers vary. At times, he feels optimistic--”I expect a rebound. Patients unhappy with the way medicine is delivered will be willing to pay more. Companies will seek alternatives. I am hoping for the best. I hope I can continue.” At times he feels defiant--”If practicing triage because of financial pressure is where medicine is going, then I’ll find something else to do.” Most often, though, he feels realistic--”I don’t know if I would have the courage to quit medicine because I don’t know what else I could do,” he told me a few months ago. “The thing is, I can see getting out. But I also can see having to acquiesce.”

Recently, Allina did just that. He decided to accept new Medicare patients once again--economics had prevented his effort to make a statement.

“I couldn’t afford it,” he says. “I didn’t want to make it more difficult on my practice than it already was.”