Many in industry are feeling poorly.

• Position: Health care - Statistical Data Included

With 175,000 patients, Charlotte's Nalle Clinic was big. So was the Titanic, says Joe Jemsek, one of its 140 doctors who hoped for a miracle even as salaries fell to less than a $1,000 a month. "Then the ice broke," he says. "Everybody else beat me out the door."

So went the year in health care. The unsinkable sank, including, after 79 years, Nalle, which closed in April. Like many of its doctors, Jemsek found himself without a life jacket. Many borrowed several hundred thousand dollars to begin anew in their 50s.

Inflated hopes for managed care vanished in renewed health-care inflation. Even the unthinkable didn't seem so unlikely.

More than 600 Duke University Medical Center nurses voted for a union in October. They lost, but the vote registered throughout Tar Heel hospitals struggling with tight managed-care contracts, their own strategic blunders and federal cuts. A North Carolina Hospital Association survey found 2,500 nursing vacancies.

"It was melt down year," says David Garbrick, health-care consultant with the Charlotte office of Towers Perrin Inc., a management-and-benefits consulting firm. He says health-care costs rose about 16% overall. And for 2001? Garbrick estimates they'll rise close to 20% overall. "Healthcare costs are definitely going up," adds Bob Greczyn, president and chief executive of Chapel Hill-based Blue Cross and Blue Shield of North Carolina Inc., though he thinks the increase will be less. "That means premiums are going up, too."

Blue Cross' health-maintenance organization was one of only six in the black through June, while eight losers went a combined $35 million in the hole. Fourteen were doing business, down from 24 that held North Carolina licenses in 1996, but three more -- including Charlotte-based The Wellness Plan -- were being phased out.

Good news was rare, although managed care was making an effort to mend fractured relationships with doctors, hospitals and legislators. "We're listening and learning," says Jim Bendel, president of the North Carolina Association of Health Plans Inc., the HMO trade group. He's also regional vice president of Mid Atlantic Medical Services Inc., an insurer.

The ache was universal. Hospitals, says Don Dalton, vice president of the hospital association, felt continued pressure from the 1997 Balanced Budget Act. Its phased-in, $2.1 billion in federal Medicare cuts and payment caps in North Carolina hit them directly and indirectly. Medicare produces a third of revenues...