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The practice of deduction and allocation in Massachusetts is based on a concept that regards each surgical procedure as having a single monetary value which, in the case of a service-benefit member, covers the entire surgical experience regardless of the number of physicians involved. Deductions of 15% for assisting and 15% for after-care can be allocated to any physician who does in fact assist or render after-care. After being in use for 15 years without serious question, and after being found in harmony with the ethical principles of state and national societies, the procedure has been attacked as unethical. Analysis of the ethical and financial aspects of these practices in Massachusetts makes such attacks appear unwarranted. Experience during 15 years of operation shows that if Blue Shield in Massachusetts is to continue to operate on a fee-for-service basis with free choice of physician, it should employ deduction and allocation. If this is done in accordance with a predetermined formula which is fully publicized, with due regard to certain principles outlined by the author, Blue Shield of Massachusetts can continue to protect its service-members adequately, adjust to varying patterns of medical practice, remain sound financially, and operate in accordance with proper medical ethical principles.

REVIEW OF THE LITERATURE A consideration of the numerous methods of procedure used in the experimental study of peptic ulcer shows that experimental ulcers may be grouped under a few general headings: (1) resulting from a deficient blood supply to the gastric mucosa; (2) produced by the action of bacteria; (3) resulting from the action of toxic agents; (4) resulting from trophic and glandular disturbances, and (5) produced by the action of the digestive juices.Prior to Virchow's time, experimental studies of the problem had not been carried out. Indeed, a clear recognition of peptic ulcer as a distinct pathologic and clinical entity was not achieved until comparatively late in the progress of medical science. Galen, Celsus and other ancient investigators, presented vague and doubtful references to the ulcer in their descriptions of passia cardiaca, hematemesis and melena. The postmortem examinations of the sixteenth century, stimulated by the general revival

America and our profession are caught in the toils of a cyclically recurring world crisis. In the current phase of crisis we must attempt to discern and anticipate future patterns of medical practice. Only thus can we guide inevitable readjustments into channels which will preserve the basic values and achievements of our free profession.These challenging days confront us with new demands, three of which seem to have crystallized clearly; first, to produce and distribute, in cooperation with other properly interested agencies, good medical care across the entire face and into all segments of our nation; second, to accept the intent of the American people to transfer medical care of the indigent from its present base of professional responsibility as a charity to a community responsibility through taxation; third, to devise mechanisms which will provide the wage earning and moderate income segment of the American populace with a mode of