Picture this. A doctor who lets his patients help him set his salary and fees.

And whose income was only $20,000 last year, despite a roster of 3,000 patients.

This unusual physician is Dr. Milton Seifert of Excelsior, Minn., a half-flossy, half-worn lakeside suburb of Minneapolis, a bit of a cross between White Flint Mall and Lake Wobegon. Seifert's practice is a partnership between a doctor and his patients, one that emphasizes "joint responsibility" -- Seifert's byword -- for both medical care and managing his practice, including such delicate, normally top secret subjects as collections and complaints.

So far as Seifert has been able to find out, this is the first such partnership in a private practice anyplace.

Woefully, the practice has been suffering cutthroat competition from this area's many HMOs -- prepaid, "we cover it all" health plans, luring away many patients, especially parents with ever-feverish children, with their promise of virtually all care for so much a month. In the last few years, this competition reduced Seifert's pay from its usual $40,000 or so -- still at least $20,000 less than that of most family docs in his area -- to its bare-bones 1985 level, less than his wife made a few years ago as a teacher.

No one was unhappier about this than the 50 members of his Patient Advisory Council, the volunteer group that meets regularly to help run his practice. As a result of his and their efforts, he reports, the practice is "coming back," collections are up and, a nice bonus, the Department of Health and Human Services in distant Washington has suddenly taken an interest in this hand-in-hand way.

As part of its new Small Business Innovation Research Program -- thrust on it by Congress -- the National Institutes of Health have just given Seifert a $50,000 starter grant to begin spreading the hand-in-hand gospel to other doctors and patients.

Milt Seifert, both a small-town pragmatist and an incurable visionary, would like to see a not-too-distant day when doctors and patients all over stop behaving like adversaries and start working together to seek better health care.

The scene is Excelsior Methodist Church, a handy, free meeting place. The time is a winter night. The temperature outside is 10 below, limiting tonight's Patient Advisory Council attendance to a brave dozen men and women.

The president of the council is Bill Heimbuch, a retired industrial engineer. He calls the quarterly meeting to what passes for order, since members speak up as they please and pop up now and then for refreshments.

The members and Dr. Seifert and his wife, Dorie, the practice's part-time bookkeeper, sit in a rough circle on sofas and hard chairs with their various papers and coffee or hot chocolate and cookies. Heimbuch is portly and bald. Seifert is solid and square-faced. The members, from their twenties to their seventies, sport everything from business suits to red and blue snow suits. The scene could have been painted by Norman Rockwell.

The meeting gets quickly to the nitty-gritty: the subject of bill collections. This is the province of a key Support Services Committee, which meets monthly to discuss fees and finances. The chairman is out of town, so the doctor makes the report.

It seems that the patients who left for HMOs were actually those best able to pay, leaving a disproportionate number of elderly, underemployed and plain poor. "Collections were getting very bad, and we were slipping behind in paying our bills," Seifert reports. So the committee, reluctantly, hired a collection agency last year to go after those who everybody knew could "manage to pay."

The agency seems to be doing a good yet low-pressure job. "I've not received any angry phone calls," says Dorie Seifert, and one man told the doctor, "I'll start paying that bill if I can just keep coming to you without any effect on my care."

"I told him, 'Fine,' " Seifert says. Later he explains that: "The first thing we do, of course, is try to collect the bill ourselves by polite letter. Often one of the members of the Patient Council calls and explains that the practice is a business and has to pay its bills and needs the money to keep going. That can have a lot more effect than my office calling."

Another subject: complaints. One woman complained about her bill, especially since "the doctor had to look things up in a book." Another woman said she called with a splitting headache and was "put off" by the office staff, rather than being told to come right in. She was justified in her complaint, Seifert concedes. "Looking back, she could have been having a stroke or hemorrhage."

"Sometimes," he adds, "we have part-time help who don't know all our procedures. We've decided to spell them out and put them on a plastic card by the phones so there'll be a routine for who gets in right away and who gets priority treatment, like anyone with terrible, unrelenting pain or a breathing problem."

Most complaints, however, are about a more mundane subject: waiting. Seifert, it seems, is a doctor who habitually decides to spend 45 minutes talking to some troubled patient, while a roomful cool their heels.

"We're always discussing this," says Bill Heimbuch, "but I don't think we're going to change Milt. Most of the older patients know they're likely to spend an hour or hour and a half before they get in. I usually make an appointment, then come about 45 minutes late, because I know I'll be early."

Now and then true enough, Seifert later concedes, "though I usually do better." He says he promises his patients "everything I can give them except perfect punctuality."

The meeting continues. Marion Johnson, a white-haired former physical therapist, reports for the Patient Services Committee. Patients -- their own idea -- offer each other transportation, baby-sitting and other help, including car seats for toddlers. Seifert is a dedicated preacher of prevention, "so when I tell a patient he has to cooperate in his care, one thing I ask is that he use his seat belt." And car seats for kids.

Next, Seifert reports on the rising cost of malpractice insurance and presents a possible patient-doctor compact, a document that he and obstetric patients in particular might sign. The patients would agree to submit any problems to a conflict resolution committee before taking legal action. This would not be legally binding, Seifert points out, but, since he has never been sued for malpractice, he hopes it may induce his insuror to reduce his rate.

"They already give us a 10 percent discount because of our council and our Grievance Committee," he says. "They told us, 'We believe your way of practice is safer.' "

As you might suspect, even were he not the creator of the Patient Council, Seifert is an unusual doctor.

His father was an Excelsior family doctor before him. He went to medical school, then joined the family practice.

"Then my father had a heart attack, and I suddenly became many patients' doctor. People began telling me things I'd never heard about before -- strains in their homes, abuse, battles with their kids. Somehow I didn't know that these things were prevalent in Excelsior. The pain these people had dealing with them was worse than the broken bones and car accidents.

"I found I was inadequate to deal with these things. I was too young. So I'd sort of wing it and let them help me. I started to form partnerships with them to make them help figure things out. I'd help, but I wouldn't take the whole responsibility.

"And that, the partnership idea, is the way my whole practice has evolved. I can't take on the responsibility of a whole other person. But I can if they're willing to do their part."

For example: "I often read out loud as I write in the patient's record. I may say, 'This looks like flu, but I also think you could be healthier. Why don't you buy an exercise bike?' " If the subject is intimate? "That's when I read it for sure, so you know what I'm putting down. Say, it's a problem of sexual abuse. I put it down, but I also try to protect your privacy a little. I'll say, 'There has been some family disturbance, with some inappropriate activity.' Then we try to decide what to do about it."

He long ago began using helpers. Today he has a trained physician's assistant and four part-time "health educators," counselors used as needed for alcoholism, emotional disorders, marriage problems, drug abuse and the like. "I can say, 'I'm going to have you see a health educator. I can prescribe that instead of Valium.' "

He once put it this way: "I wait for the pressure points, the moments of drama in a life. That's when people have a heightened sensitivity, when they make changes in their life. That's when I can act as a catalyst."

He also believes that "curing isn't the only thing we can do." A young man with cancer may be referred to surgeons, radiologists, oncologists. "Then they'll finally send him back to me. And every day is a fight that he loses."

His prescription for patients like this is one he has borrowed from Alcoholics Anonymous and calls "possibly the most powerful concept of the 20th century": "Say, 'I have today.' Live and use each day. Then at the end of the day, people feel they've made it through the day. They've won."

In 1973, trying to practice his time-consuming kind of care, he was having more and more trouble managing the business side of his practice.

"One day I did some thinking about what I did when I first came into practice, making the patient a partner in the examining room.

"I decided I'd let the patients help me with the practice, too. I sent out a post card to the whole practice, asking, 'Would you be interested in participating in a patient advisory council?' I got about 200 replies. I called a meeting and 50 people showed up. They had three reservations. 'This is kind of disrespectful to you . . . We're laymen, what value do we have? . . . That's a lot of responsibility.'

"I said, 'It's the same as in the examining room.' "

Loose rules were established. Any patient could join the council for $5 a year to cover expenses. A president and committee chairmen were chosen more or less by consensus, or who was willing. Members float on and off the council. Seifert thinks that's better than a rigid structure, with a few people running things forever.

Council members never suggested that Seifert should limit his income, and felt his fees should be around the area standard. In fact, he says, "they always say, 'We'd like you to do better.' "

That he has not greatly prospered is surely a matter of the large amounts of time he often gives patients, rather than trying to see the maximum number possible. And probably a matter of some patients who want a punctual doctor and health insurors who don't compensate one on the basis of time.

His methods, he says, have resulted in a reduced number of hospital admissions for emotional problems and chemical -- drug or alcohol -- dependency. He has had no suicides in 14 years among disturbed patients who have used his counselors. So he believes the time spent pays off.

The insurors don't always agree, or take that into account.

The Patient Council hears Seifert report that the practice -- and cash flow -- are coming back up, and "people are coming back to us for personal care, the things they like about a small practice."

But a prepaid practice plan that he belongs to, one that covers 10 percent of his patients, claims he is costing them $30 more per patient per year than the average family physician in the Minneapolis-St. Paul metropolitan area.

So this plan, per its agreement with its member-physicians, last year fined Seifert $2,500, cash he had to fork over for his emphasis on painstaking probing and talk therapy. "This year they want to fine us $5,700," he tells the council. "I have a meeting with them, and I intend to tell them about the kind of practice we have -- and about our NIH grant and the fact that someone thinks we are doing a good job."

Though he is a kind of pioneer and one with both conviction and courage, he is obviously not going to get rich. He is well regarded by fellow physicians. He has served on the important credentials committee of his county medical society and has nonsalaried teaching positions at two medical schools. A writer in an American Medical Association publication once said, "Compared to Dr. Seifert's practice, 'holistic,' 'humanistic' and 'behavioral' medicine, buzzwords of the '70s, seem curiously passe."

But "there's no fee schedule for caring," he has said.

At age 54, quickly using up his middle years, does he have any regrets about his choices?

"No," he answers immediately. "The things we've started have been very successful in producing medical care and practice management."

How can he call the management "successful" when his own income has dropped?

"Things are getting better," he insists. "And now that I've come this far, and though things got bad, I hate to give up the idea."

Besides, he says, "I'm so appreciative. I always wanted to be a doctor. I followed my dad around. I'm appreciative of being invited into the lives of other people and to feel really competent in that now."

A longtime patient and friend of the doctor's is Clifford Simak, a well-known writer of science fiction. He says of Seifert and his patients and his unusual council:

"We're so tied together, we're almost like brothers now. It's a funny thing. People used to put doctors on a throne. But now -- it's friendship and competence and working together. And by God, the man's making it work."