He needed to have a mole taken off his hand.

The surgeon who suggested it said that, well, he could burn it off in the office, but then it couldn't be biopsied, not, the surgeon assured him, that it looked terribly suspicious, but you can't be too careful.

So patient and doctor decided that it should be taken off in the outpatient surgical clinic of George Washington University Hospital.

He -- we'll call him Ed -- showed up at the appointed time, taking part of his lunch hour for what he anticipated would be a few minutes.

He remembers it vividly, although it happened perhaps a decade ago. Here's how it went:

Papers. They gave him about a ream of forms, all of which had to be filled out right then and there, not just about insurance, but health history going back, he says, to his toilet training.

Then, he recalls, a nurse took him into a little cubical -- "like a shower stall without a shower" -- and told him to take all his clothes off.

"Whaddya mean take all my clothes off?" he recalls howling, absolutely convinced there was some mistake. "They're just going to take off this little mole . . ."

"Take all your clothes off," the nurse repeated, maintaining an expression of bored indifference. And, of course, no eye contact.

Paper. "Put these on," she said, and handed him a cute little packet of paper "thingies." A paper surgical cap that was too small. A pair of paper slippers that were too small. And a smock that closed in the back, although it was so-much too small that you could only say it opened in the back.

Then he was all ready. He sidled out behind the nurse, trying to keep his back to the wall, until he came into a room with a reclining chair, a lot of attendants in greens and the surgeon.

"This won't hurt a bit," lied the surgeon.

"It will be all well tomorrow," he lied again.

It hurt, Ed insists, for two weeks.

Outpatient surgery, the hospital folks say, has changed a lot since then.

The paper clothes are still necessary, of course, to provide the essential sterile environment, but at least they come in bigger sizes.

And so-called ambulatory medicine, providing as it does a relatively inexpensive alternative to even one overnight stay in the hospital, is burgeoning.

The oldest ambulatory surgical facility in the country is the one at the George Washington University Medical Center, founded in 1966. (The UCLA Medical Center also began doing outpatient surgery in 1966, but not in a separate facility.) In the early days GW's was small and limited to the most minor procedures. In 1966, there were 1,495 patients. Today, says Dr. Marie Louise Levy, its director of anesthesia, it accounts for a third of all surgical cases at GW -- last year, 4,129 cases were in-and-out surgery.

Medicare, followed quickly by other health insurance companies, is specifying more and more surgeries -- some surprising -- as ambulatory rather than in-patient procedures. In other words, in order for these procedures to be covered, they must, unless there are overriding reasons, be done on an outpatient basis.

These include hernia operations, tonsilectomies, laparoscopies, some urinary tract procedures and, possibly most frequently, the D & C -- dilatation and curettage.

One operation that is peculiarly troublesome to the patients, at least in concept, is an in-and-out procedure for cataracts.

Most cataract surgery is performed on older people who, likely as not, are impaired one way or another in both eyes. And the old image of lengthy and perilous eye surgery persists, even though cataract operations today -- which take only half an hour -- are the next thing to routine.

"Some people can be quite frightened at the idea," says Jo Baker-King, a registered nurse at Group Health Association Inc. GHA established a support network for these patients that provides transportation and, when needed, home visits, "sometimes just to reassure them that they're putting in their eye drops correctly."

For minor surgery when only local anesthesia is involved, advance patient workup is relatively simple and varies according to the directions of the individual physicians.

But, says Levy, patients who will need a general anesthetic must not eat after midnight the night before because of the potentially fatal danger of aspirating undigested food.

That may be the single most important preoperative instruction. Other suggestions from Group Health and other sources:

* No food for six hours before surgery even when only local anesthesia is used (unless the physicians says it is okay.)

* Have someone to drive you home. The Washington Hospital Center, where much of Group Health's outpatient surgery is conducted, reminds patients that "you will not be accepted for general anesthesia" unless accompanied by someone to drive you home.

* Be sure baby sitters are set. Keep them after surgery as well. Even when it is minor, you may not feel like coping with rambunctious offspring.

* You may want to bathe in advance. Your doctor may not want you to do so for a specified period after surgery.

As a general rule, says GW's Levy, the day of the operation will go something like this:

Preoperative procedures are minimal and most surgery takes less than an hour.

Patients who have had general anesthesia are taken to a first recovery room, where they are monitored closely.

If they seem to be proceeding normally, they are moved to a second recovery room, where they rest in comfortable reclining chairs.

The average stay, she says, is about two to three hours. The patient is given specific postoperative instructions, information on dressings, appointments for follow-ups and phone numbers to call in case of complications.

Levy believes that having a facility attached to a hospital, rather than free-standing, is "a tremendous advantage, because the hospital is always there in case anything happens, and the staff are used to dealing with very sick people." Only about 1 or 1.5 percent of the patients ever need admission to the hospital.