Governance: From Monarchy to Representative Democracy
Even when physicians buy into the concept of cooperative practice, governing a large medical group is not easy. It has been said that managing physicians is like herding cats or pushing Jell-O up stairs. Doctors are not known for their ability to compromise and take orders from others.
Like most major clinics, the Palo Alto Medical Clinic has always been physician-led. The original partners made decisions as a group, gathering casually in the Clinic hallway or meeting after hours at Dr. Russel Lee's house. Each doctor had an equal vote, and Dr. Milton Saier, one of the founding partners, remembered that they tended to agree on most things. As more doctors came on board, a smaller management team of physicians was appointed to oversee operations, with input from the other partners.
The Clinic's rapid post-war growth spurt made governance-by-all more difficult. To deal with the new dynamic, the group created an elected Executive Board, formally tasked with managing the Clinic's affairs. The board had the power to make certain key decisions on its own, although other decisions – including the admission of new physicians to the partnership – were (and still are today) put before the group as a whole. The board had four voting members, an "executive head" and two non-voting members: a "vice head" and secretary. Dr. Lee was the board's first executive head.
Though the Clinic was thus structured as a democracy, there was never any doubt in those early years about who was really in charge. Dr. Lee was a towering presence, a man of powerful will and phenomenal energy. Occasionally outvoted, he nevertheless could maneuver the group toward his desired outcome.
"There was plenty of debate, but he was able to overcome most opposition just by the force of his personality. He didn't really work through consensus; he was more able to insinuate his will," said his son Dr. R. Hewlett Lee. "He was a great expansionist, and the other partners were sort of an anvil tied to his foot that he had to drag along." In reality, the democracy was a monarchy. "He was the king of the place," remembered Jane Torres, who retired in 2004 after 40 years as a Clinic employee.
Dr. Lee was a visionary leader. The details, however, sometimes got lost. "We always said about Russ that if he quoted you a financial matter, you weren't entirely sure where to put the [decimal point]," said Dr. Ralph Cressman. Early on, the Clinic hired non-physician business managers to help keep its operations in working order. "Russ would have these ideas at a mile a minute, and people were supposed to go behind him and fertilize them, water them and hope they could make them happen," said Bert Rose, a long-time Clinic administrator.
Many doctors did not think the rule would apply to the Clinic's legendary founder, who indeed tried to convince the partnership to raise the retirement age to 70. When he was outvoted, Dr. Lee begrudgingly stepped down from both the partnership and his role as its executive director. Nonetheless, he remained involved in Clinic life for years afterward, continuing to see patients and remaining influential behind the scenes.
Dr. Robert Jamplis, who later would serve as Clinic executive director and the first president of the Palo Alto Medical Foundation, once said, "He handed me the baton, but...he had forgotten to let go of it, and we were going around the track together."
Dr. Lee's retirement from official leadership duties left the group in an unfamiliar position: without its dynamic creator at the helm for the first time in nearly 35 years. In his place, the physician partners elected family practitioner Edward Liston as executive head. A mild-mannered Englishman who took his afternoon tea every day, Dr. Liston was about as different from Dr. Lee as possible.
Most now say he was elected as a temporary "caretaker" to watch over the organization while it caught its breath and adjusted to the post-Lee era. "Ted was a beloved person. His calm English manner was very appealing. He was very low-key, very smart, but not aggressive about anything – a comfortable old shoe that had been around a long time," said Dr. William Clark. Dr. Liston did not try to rock the boat, and tended to defer to the Executive Board when it came to decision-making.
"Ted was very interested in making sure that everybody knew one another and got along, but he was not a visionary by any sense. His strong point was being the oil in the works for a period of time," said Dr. Gordon Campbell, a retired sports medicine physician. Dr. Liston himself saw his role as one of custodian. "During my five years, I felt that we needed a period of consolidation and digestion," he wrote at the end of his tenure. He did not run for a second term.
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A New Visionary
"The surgeons called a timeout, got those guys on the phone and told them to come in," said Bert Rose. Knowing the surgeons better than the internists, with whom they had little interaction, the anesthesiologists cast their votes for Dr. Jamplis, giving him the victory.
Despite the contentious 1965 election, "Jamp" proved to have fantastic staying power. He won three more elections for the Clinic's top position in 1970, 1975 and 1980. In 1981, he spearheaded the creation of the Palo Alto Medical Foundation, and in 1982 took over as its first president and CEO. In all, Dr. Jamplis led the organization from 1966 until 1999, becoming in his own way as legendary as Dr. Lee.
Dr. Jamplis reinvigorated the Clinic after its five-year quiet period under Dr. Liston. Recalled Dr. Harry Hartzell, "Jamp was the football coach, and we all went tearing out in the second half" – an appropriate metaphor for someone who had been an All-American quarterback at the University of Chicago. Like Dr. Lee, Dr. Jamplis was an avid supporter of the multispecialty group practice model, believing that the ability to provide comprehensive outpatient services was fundamental to cost-effective, quality health care. That belief drove his sense of what was best for the organization, and once convinced that an idea had merit, he was difficult to persuade otherwise.
Alto Health Care Division.
"Once he saw that you were not persuadable, he ignored you – although the only unforgivable sin in his mind was making the Clinic look bad in the eyes of a patient." Dr. Jamplis believed the Clinic could truly be the "Mayo of the West," and under his watch several new specialty departments were launched.
Like a good politician, Dr. Jamplis had an amazing ability to work a room. His political skills made possible what was arguably his most important legacy: the creation of the not-for-profit Palo Alto Medical Foundation, which allowed the doctors to raise money through philanthropy and tax-exempt financing for the first time. Bringing the Foundation to life meant changing state law and convincing dubious doctors to accept an enormous change in the Clinic's structure. Making the Foundation financially successful required an active commitment to fundraising. Through tenacity, force of will, social outreach and an unwavering belief – later proven correct – that the foundation model was vital to the Clinic's survival, Dr. Jamplis made it happen.
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As the Clinic grew and the business of medicine became more complex, the organization increasingly resembled a "representative democracy," with a small number of doctors elected or appointed to represent the many divergent views of the physician partners. The Executive Board, in particular, played an important role in steering the organization. Shortly after Dr. Jamplis took office in 1966, he pushed through an amendment to the partnership agreement that gave the vice executive head and secretary voting rights for the first time. A title change was also made: "They said executive ‘head' basically meant executive ‘toilet,' and so they changed the name to executive director," said Dr. R. Hewlett Lee. (In 2001, the titles were again changed to Chair and Vice Chair of the Executive Board.)
Board members served rotating four-year terms, with one or two positions coming up for election at the beginning of each year; the board chair served a five-year term. Elections were often spirited, resembling political rallies, especially when candidates hailed from different sides of the great divide between surgical and non-surgical specialties. The board members' responsibilities included supervising general policies; controlling financial transactions and contracting; hiring and firing Clinic employees and doctors; and setting compensation for physicians. Their constituents did not hesitate to weigh in on these controversial issues: Through partnership meetings and department gatherings, or by simply walking into Dr. Jamplis' office, physicians made their opinions known. The organization's leaders, in turn, made communication downward a priority.
John R. Johnson, the group's long-time executive administrator, had been Menlo Park's city manager before joining the Clinic in 1964. "As city manager, I had five bosses, the five council members," he said. "At the Clinic, I had 110 bosses, in a sense. For doctors, finding and facilitating consensus or compromise isn't part of their make-up; they've been trained differently. But I think what marked this Clinic off, in one respect, is that the Executive Board tended to run it like a board of directors. They took a leadership role. There were some real statesmen among them who knew how to calm people down and negotiate."
Beyond the Executive Board, individual physicians took leadership roles as department heads. Doctors could also serve on standing committees that advised the Executive Board in areas such as professional affairs and medical education. Committee service and department leadership were encouraged as a way for doctors to participate in the health and governance of the Clinic, and they were often rewarded with an increased salary.
As physicians trained in science and medicine, "it was amazing that we could – despite our reluctance or inability or ignorance – provide leadership from within our ranks," said retired family practitioner Myron Gananian. But there was never any question that the
organization would be led by doctors, albeit with valuable assistance from non-physician administrators. Physician governance meant that financial and strategic decisions would always be considered within the context of what was best for patient care, not the other way around.
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Governance after the Foundation
After the Palo Alto Medical Foundation (PAMF) was created in 1981, most operational responsibilities – such as management of non-physician staff, contracting with insurance plans, purchasing of medical supplies, billing and quality assurance – were transferred to this new organization. The Clinic, which continued to exist as a separate corporation under the Foundation umbrella, retained responsibility for hiring and managing its physicians, who were then able to spend more time on "doctoring." Today, the elected Executive Board continues to govern the physician partnership, and several partners help guide direction for the larger Foundation by serving on its Board of Trustees. Many of PAMF's top administrators are doctors, including President and CEO Dr. David Druker, who joined the Clinic as a dermatologist in 1975. The principle of physician governance remains fundamental to the entire organization.
As the physician partnership has grown, leadership at levels below the Executive Board has become more important. New policies and other issues are discussed first within individual departments or satellite clinics, and department heads and committee members play a greater role in passing feedback to and from the top. But current physicians say their access to the group's highest leaders is unrestricted; as in earlier days, most feel no qualms about walking into the office of the Executive Board chair and making their feelings known. E-mail and voicemail technology also make it easier for the leadership to communicate with the partnership en masse. "It's probably not the same as it was when we were smaller, but with the partnership structure, I still feel like there's a conversation – even if that conversation gets to be very long sometimes," said Dr. Joann Falkenberg, a family practitioner who joined PAMF's Fremont Center in 1998.
The partnership continues to meet as a whole once a month, and major strategic decisions are still made by the entire group. With a greater emphasis these days on balancing work and personal life, and more physicians practicing in satellite clinics, not every partner attends the evening meetings. But most remain aware and interested. "People call each other on their cell phones the second that the partnership meeting is over and talk about it as they drive home – what did you think about this or that? And people who miss the meetings come in the next day and say, ‘What did they talk about?'" said Jay Schlumpberger, a family practitioner at the Palo Alto Clinic.
Added internist Patti Yanklowitz, "The Clinic is very effective at making you feel part of the process, not shoving things down your throat so you want to rebel, but getting you to be a partner in the change. It makes you understand that this is a democratic, physician-run organization and that it ultimately is going to make things better."
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