Structure and Organization

Normal as it might seem today, the organization of physicians into groups was relatively uncommon in the 1930s, when Dr. Russel Lee and his partners set up shop. In the 19th and early 20th centuries, most physicians were independent general practitioners who provided all manner of care to their patients. Medicine was still simple enough that "specialists" were rare, and tended to operate as outside consultants when the general practitioner needed help. As clinical developments prompted doctors to establish separate disciplines, pioneers such as Dr. Lee realized that bringing different specialties together could convey major benefits to physicians and patients alike.

But group practice is not always a natural fit for physicians, a notoriously independent-minded group of individuals. The success of a medical group depends in large part upon its organization – whether governance and compensation structures effectively balance the doctors' individual needs against the good of the group as a whole. Tip the scale too far in the former direction and the group cannot function as a unit; too far toward the latter and physicians leave
for greener personal pastures.

By the 1950s, the Palo Alto Medical Clinic had established policies and procedures that guided its operations. These mechanisms helped ensure its continued survival. Still, maintaining the harmony between individual and collective needs required constant vigilance, as well as occasional creativity, from the group's leaders.