MEDICAL CARE: THE SOUL OF AN HMO

ALAN DEMEURERS RECALLS IT VIVIDLY AS ONE BRIGHT moment in a succession of dark days. "I remember exactly where we were sitting," he says. His wife Christine had by then been found to have metastatic breast cancer and believed her only hope was to undergo a costly new kind of therapy that involves the harvest and retransplant of her own bone marrow--high-wire medicine occupying what one of her physicians calls "the twilight zone between promising and unproven treatments."

It is a measure of just how bleak those days were that this gleaming instant came when Alan at last read the thick contract from their health plan, Health Net of Woodland Hills, California. Like most Americans enrolled in such plans, the couple had never studied the document. Now, however, the specifics had become a matter of vital interest. "Good news," Alan announced from his end of the family sofa in Murietta, California. "It's covered."

And so for the deMeurerses began a three-year encounter with "managed health care" and the powerful forces that are fast reshaping the culture and practice of medicine in America--not just cutting costs but changing in a fundamental way how doctors view patients, and perhaps how patients should now view doctors. In a three-month investigation, TIME chronicled Christy deMeurers' journey, but also the parallel, interlocking story of Health Net, one very prosperous company in the Southern California market, a hotbed of managed care that offers a living demonstration of what's likely to occur everywhere else as the new medicine continues its rapid advance. Taken together, the two stories provide a look deep inside the psyche of a managed-care company that is typical of the hundreds blooming and merging throughout the nation. These organizations have jettisoned the old Marcus Welby-style medicine for something entirely new, in which doctors become "gatekeepers," patients become "covered lives" and remote managers decide who gets treatment and who doesn't.

"It's a paradigm shift," says William Popik, Health Net's chief medical officer. "It's a shift that has taken place a lot more quickly than patients are ready for--that's absolutely true. What's shifting is, patients can't drive it anymore; patients can't decide, 'My ear hurts, so I'm going to go to the doctor today.'"

Prodded by large companies fed up with rising medical costs, the new medicine's entrepreneurs have turned health care into a corporate battlefield increasingly governed by the promise of stock market wealth, incentives that reward minimal care and a brand of aggressive competition alien to front-line doctors for whom dressing for success still means wearing khakis and a lab coat.

No one disputes that managed care has at last put the brakes on medical spending, or that it has proved an effective vehicle for rationing health care, a profoundly sensitive subject in a culture raised on the notion that even the most expensive and esoteric treatments should be available to all. At issue, rather, are the costs of the process itself--the effort and delay inherent in acquiring care and the extent to which considerations other than mere health are brought to bear by corporate managers who must approve even such minor procedures as blood tests and mammograms. Yet the most fundamental question raised by the new medicine is one largely missing from public debate: Can you still trust your doctor?