These have to be medical miracles.

• Position: Health care in North Carolina - Industry Overview

If there were a believe-it-or-not museum for health care, North Carolina would have some new entries: Two hospitals cut rates, a health-maintenance organization was fined for charging too little, and some hospitals, once mortal foes of insurance companies, became insurers themselves.

"I've seen as much change this year as in the entire 20 years I've been in health care," says Ellen MacMillan, vice president of the 144-member North Carolina Hospital Association in Raleigh.

What competition, legislation and testy health-care consumers did to North Carolina's $21 billion medical economy would have startled critics a decade ago, when medical costs were rising 15% a year. Consultants and insurance brokers estimate overall costs rose less than 4% in 1996.

Managed care continued to force clinics and hospitals to operate with a stern eye on the bottom line. In June, for example, when the General Assembly passed the Public Hospital Managed Care Act, it gave formal blessing to what hospitals were already doing - becoming insurers themselves.

The list of hospitals that own or are partners in HMOs has grown to include Duke University Medical Center in Durham; Carolinas HealthCare System in Charlotte; North Carolina Baptist Hospital and Wake Forest University in Winston-Salem; Carolina Medicorp Inc., the parent company of three Triad-area hospitals; and Coastal Carolina Alliance, a group of southeastern hospitals.

"Hospitals don't have shareholders to pay dividends [to] or stock appreciation to worry about," says Michael d'Hoostelaere, a Charlotte managed-care consultant. "HMOs that have to keep shareholders and outside interests happy are going to have a harder time dealing with cost pressures."

Many administrators were working to keep patients out of hospitals. Typical was Gaston Memorial Hospital, where the average stay dropped to five days from seven in 1993. The state average dropped to an estimated 5.5 days, down from 6.4 in 1995.

Gaston Memorial's room revenues are projected to decline in 1997, but patient volume will rise slightly. With lower overhead for outpatients, the hospital's $250 million budget will remain essentially unchanged. Room rates, $295 a day, will do likewise. Gaston wasn't the only one to hold the line on room rates. Others include Pitt County Memorial and Catawba Memorial in Hickory.

Baptist Hospital made bigger headlines by cutting $50 off its average room rate, and Moses Cone Health System in Greensboro - which announced in...