The First 75 Years: 1930-2005

In the early 1930s, six physicians formally agreed to join their practices in a new medical corporation. The partnership agreement, just three pages long, offers little indication of how unusual their decision was at a time when many doctors viewed group practice as something close to communism. Nor does it foretell how the fledgling Palo Alto Medical Clinic, founded in a small college town several miles south of San Francisco, would become one of the largest and most well-respected physician groups in the United States.

The history of any institution can be told in two ways. On one hand are lists of important dates and places, a timeline of major events in the organization's life. More enlightening, however, is an examination of how its governing structure and cultural values have evolved and influenced its development and success. In 2005, as we celebrate the 75th anniversary of the Palo Alto Medical Clinic, it is this latter story that we have set out to tell.

The Palo Alto Medical Clinic is the product of several larger-than-life personalities, starting with the man considered to be its founder: my father, Dr. Russel Van Arsdale Lee. Some thought my father to be an incorrigible maverick; others saw him as a brilliant innovator. Regardless, there is no doubt that his firm belief in the value of multispecialty group practice – the conviction that medicine is best provided to a community when doctors from different disciplines work together – was rebellious. From a vantage point 75 years in the future, there is also no doubt that this view was correct.

My father recruited others with similar ideals, and the Clinic they built developed certain immutable tenets. Among these values was the belief that community need, not profit or the physicians' personal desires, would drive the way in which the Clinic provided health care. Starting with its role as one of the nation's first physician groups, the Clinic also embraced innovation, adopting new technologies and care protocols earlier than most other doctors in order to offer patients the most effective service. The importance of a collegial work environment, one in which physicians shared resources and responsibility for patients, represented a third value. Above all, the Clinic's founders believed in quality, always striving to offer the community nothing short of the best medical care possible.

This combination of values, like the Clinic itself, was unusual in the medical field and contributed to its success. Within a few years of its founding, the group had more than doubled in size as more patients sought out its services. The expansion never stopped. When I joined the Clinic in 1956, it had fewer than 50 physician partners. In 2005, it has 222, and the growth rate shows no sign of slowing.

This growth reflects the high quality of care provided by the Palo Alto Medical Clinic. It also raises a question: How can the organization protect the core values that made it successful as it expands to new levels? Changes in medicine, from increased paperwork requirements to greater desire among doctors for better work-life balance, pose a similar challenge. Today's physicians have different backgrounds and ways of practicing medicine than did earlier generations. Patients have different expectations and needs. New technologies, medications and insurance plans, along with rapidly rising costs, all threaten to alter the physician-patient relationship.

Those of us who joined the Clinic in its first few decades learned the organization's values from its founders. Its current physician partners did not have that privilege. So it is perhaps a remarkable thing that if you ask young doctors at the Palo Alto Medical Clinic today what makes the organization special, they will without prompting offer up tenets that their forebears would have found familiar: a focus on the local community, embrace of innovation, a collegial professional environment and an emphasis on quality not seen in other places they have worked. These tenets are ingrained too deeply within the Clinic's culture to be dislodged.

The following chapters tell the story of how the Palo Alto Medical Clinic came to be the institution it is today. In reading, please keep in mind that – though they share similar values and intertwined histories – the Clinic is legally a separate corporation from the larger Palo Alto Medical Foundation. The Clinic is a partnership of physicians who contract with the Foundation to provide medical services to patients. The Foundation, meanwhile, provides administrative services (such as billing, contracting with insurance plans and employing staff members), as well as health education and biomedical research. The 75th anniversary we celebrate this year is the Clinic's, while the Foundation will celebrate its 25th birthday in 2006.

Would the Clinic founders be proud of where their organization is in 2005? Unquestionably, I think the answer is yes. Rather than fearing that the group was too large to sustain the values he instilled, my father would likely ask why it was not bigger.

The history of the Palo Alto Medical Clinic is not just a list of names and places, but a story of remarkable individuals who created a unique and special place for physicians and patients alike. We invite you to read further, and to join us in joyfully celebrating this important milestone in our history.

R. Hewlett Lee, M.D.
January 2005