When I interviewed for a job at the Palo Alto Medical Clinic in 1975, then-Executive Director Bob Jamplis told me, "Dave, group practice is the only way to go." At that time, I had just spent a year in private practice in Portland, Oregon, and had little appreciation for what "group practice" meant. I only knew that Palo Alto appeared to be a beautiful place to live, and that the Clinic enjoyed a good reputation and close proximity to Stanford University.

Fast-forward to 2005, and I now understand Jamp’s advice completely. Mutispecialty group practice is truly the best way to deliver quality medical care, allowing patients to receive comprehensive health services in one place and providing physicians with stability, collegiality and freedom to do what they love – practice medicine – with a minimum of administrative hassles. Once so controversial, multispecialty groups have become a dominant mode of medical practice in this country and the preferred work environment for a majority of newly graduated physicians.

But the Palo Alto Medical Clinic remains particularly special. I am a disciple of the management book, Built to Last, by Jerry Porras and Jim Collins. Its concepts are simple: Great, long-lasting organizations are not afraid to change, but base their evolution on the underlying culture of the organization. They also select leaders who understand and reflect that culture. The Clinic meets those criteria.

Our underlying culture has been well explored in this 75th anniversary publication. Among its key attributes is our wholehearted belief in living the words of our mission statement: excellence, innovation and caring. We have always been – and, I believe, always will be – physician-led, meaning our business decisions are based on what is best for patient care. We were created to serve the community, and strive constantly to provide "community benefit" in ways both tangible and intangible, even as we expand beyond Palo Alto. Our physicians have always put the group first, sacrificing personal financial gain for the good of the whole and helping us avoid the fiscal crises that have beset many other medical groups in California and across the nation.

These values started with our founders. They are still with us today, and they form the basis for our development across the coming decades. Nobody can say for certain what the Palo Alto Medical Clinic and its parent organization, the Palo Alto Medical Foundation, will look like in 25 years. But I do know that our evolution will be guided by our principles, most particularly by the needs of our community.

Those familiar with the Palo Alto Medical Clinic’s history will be not surprised to learn that this likely means continued growth. In recent years, we have seen steadily increasing demand from new patients, many of them coming from beyond the geographic areas we already serve. They seek us out not only because we have a reputation for quality care, but also because in some cases, we are their only source of care. As health care financing has become more difficult and the cost of living in the Bay Area more expensive, many physician groups have gone bankrupt, while other doctors have retired or moved away. The Clinic remains strong, and it is our responsibility to care for the patients affected by these departures.

At the same time, the aging of the baby boom population will present new challenges for the health care industry. The number of seniors in the Bay Area is expected to increase significantly in the coming decades. On average, people over 65 need four times more care than younger patients. As area demographics change, more health care services will be required.

More patients means more physicians to care for them. Growth is nothing new for the Palo Alto Medical Clinic. When I arrived in 1975, it had about 125 physicians. Now there are more than 300, and more than 600 in the larger PAMF organization, including the Camino and Santa Cruz divisions. Expansion has always raised concerns for doctors, who tend to be a conservative bunch. The fears I have heard expressed by our physicians include: "Will we know our partners as well as we used to? Will we become too removed from our leaders? Isn’t growth too risky if the economy turns sour?" These are all issues that the organization has faced successfully in the past, and must, can and will address in the future.

But growth also brings opportunities. Insurance companies recognize us as an established, high-quality leader in the market, and so are willing to pay for the care we provide. Growth gives us the economic vitality to sponsor innovative projects that improve patient care, such as our electronic health record system, which is among the most advanced in the country. As a large group, we can better provide administrative support to physicians; this fact, combined with our longstanding reputation for excellence and collegiality, enables us to recruit doctors to this expensive part of the world, where many other organizations have failed. We are able to offer a diverse range of services that patients appreciate, including outpatient surgery and sophisticated imaging technology, and so they continue to seek us out. Our growth feeds itself and allows us to remain a self-perpetuating, strong, patient-focused organization. Indeed, I believe that we are now able to offer higher quality care and better service than at any other time in our history.

In the past, the Clinic has also benefited from a willingness to make major structural changes in order to protect its core mission. The creation of the Palo Alto Medical Foundation provides the most notable example of this trait. In that case, Dr. Jamplis had the foresight to recognize that tightening medical economics threatened the Clinic’s financial survival, and the vision to propose and then push through the revolutionary creation of a whole new type of health care organization. Though others within the Clinic initially resisted the change, the subsequent access to tax-exempt financing and the generous support of donors are key reasons that we remain able to provide our communities with excellent care today. Just as the Clinic, years before, pioneered a model of group practice that would later become common, the foundation structure now is used by a growing number of medical groups across California.

The decades ahead will likely see additional structural changes for this organization as community health care needs evolve. For example, the Palo Alto Medical Foundation is currently making plans to build a new medical campus in San Carlos that will include not only physician offices and "ancillary" services such as laboratory and radiology, but also – for the first time in our history – a general acute-care hospital. To some, this plan seems a radical, perhaps unnecessary departure from our focus on outpatient care. But we see it as a logical extension of our fundamental belief in the value of coordinated care. In the 21st century, as medicine becomes more complex, bringing inpatient, outpatient and ancillary services together improves quality and safety by allowing physicians to communicate more easily. It cuts costs by centralizing technology and services, and it makes care more efficient for busy patients. Other leading medical clinics have adopted similar models, and we believe that in 25 years, it will have proven a prescient way to handle a growing senior population and other coming health care challenges for the Bay Area.

And there will be many of those challenges. We have become all too familiar with worrisome trends such as rising health care costs and insurance premiums, growing rates of chronic diseases, high medical malpractice premiums and fewer doctors graduating from medical school. As those who know patient needs best, physicians must be involved in solving these problems. The Palo Alto Medical Clinic has always been among the most innovative health care institutions in the country, and my hope is that we will play a more prominent role in shaping the health care system of the future. Already, our experience with electronic health records is informing the federal government’s plans to expand access to such technology as a way to improve health care quality and cut costs. It is essential that we offer similar assistance in other areas where we are strong.

As we continue in the years ahead to base our evolution on our underlying culture, one of the biggest challenges the Palo Alto Medical Clinic may face is protecting that culture as we reach a size where our doctors do not all know one another and our facilities are spread farther afield. But I believe wholeheartedly that it can be done if we let our cultural values inform our actions as we have in the past. Excellence, innovation, caring, collegiality, community benefit–at base, these tenets are simple and straightforward, clear guides for every situation, from the briefest doctor-patient interaction to the largest strategic decision. No matter how big we grow, no matter how medicine changes, no matter what outside influences bring to bear, there is no reason we cannot continue to uphold them for the next 25 years, and into the many decades beyond.

David Druker, M.D.
President and CEO, Palo Alto Medical Foundation