Palo Alto in 1924 had existed as an incorporated city for only 30 years and had a population of about 10,000 people. Civic services and cultural institutions were still under development, Prohibition kept the town "dry" and a local scandal brewed over allegations that the city police chief had used money from police bicycle auctions for personal purposes.

Medicine had made remarkable advances in recent decades, but was still relatively primitive by today’s standards. Antibiotics were more than a decade away, insulin had just been introduced in 1923 as a treatment for diabetes, and diagnostic and therapeutic use of radiation was still in its infancy. Palo Alto residents who needed hospitalization were treated at the old Peninsula Hospital, located on Embarcadero Road near the intersection of Churchill Avenue and Cowper Street – a three-story frame building that "had the bad habit of catching fire at frequent intervals," Dr. Lee recalled.

In their first years together, Drs. Williams and Lee saw their practices grow quickly. Much of the growth came through word of mouth. "I didn’t particularly enjoy obstetrical practice, so I upped my delivery fee from $35 to as high as $100," Dr. Lee said. But rather than stemming demand as hoped, "this immediately quadrupled my practice. My patients said, ‘If he charges that much, he must be pretty good.’" Another jump in his patient base occurred after he treated the mother of a wealthy San Francisco financier. Called in when the family’s regular physician was away, Dr. Lee found the woman experiencing an attack of paroxysmal tachycardia (a rapid beating of the heart). He quickly halted the attack, after which the patient "sat up and shouted to her assembled kin, ‘It is stopped, I am cured – just like Jesus!’" Dr. Lee recalled. "Well, I became the family doctor, and the son went around and told everyone that if they did not have me for a doctor, they were making a big mistake."

Without sophisticated medical technology, house calls and hospital visits at all hours of the day or night were the norm in medicine at the time, and Palo Alto was no exception. Dr. Lee would typically start his day at 7 a.m. with two hours of hospital rounds, followed by house calls until 2 p.m., office hours until 7 p.m., dinner with his family, then a few more house calls. Drs. Williams and Lee cared for most of the people affiliated with nearby Stanford University, while a third, rival physician "had most of the area’s wealthy people," Dr. Lee said. In later years, Palo Alto Medical Clinic physicians would continue to be the principal care providers for many Stanford students, faculty and staff, with Dr. Lee serving as personal physician to a succession of Stanford presidents.

The Group Grows Larger

Rather quickly, the practice grew too large for the two doctors to handle. "We decided that whenever we found a need, we would add doctors or equipment or whatever else was necessary," Dr. Lee said. In keeping with this decision, the two physicians brought in Dr. Edward Frederick Roth in 1925 to cover obstetrics and surgery, and added pediatrician Esther B. Clark in 1927. Dr. Clark – one of the first female physicians in the country – recalled, "People weren’t in the habit of having pediatricians then. The partners wanted me to have a practice and do well, so naturally what they did was refer children to me.... Russ had five children and Roth had four. They would tell people, ‘She takes care of our children and we think she’s fine.’"

In 1929, Dr. Williams retired and was replaced by Dr. Blake C. Wilbur, a surgeon whose father, Ray Lyman Wilbur, would become a Stanford president. Soon after, Dr. Milton Saier, an internist and allergist, arrived, followed quickly by Dr. Herbert Lee Niebel, a general practitioner and anesthesiologist. Two women assisted the burgeoning medical group as nurses.

In bringing in new physicians, Dr. Lee followed a philosophy that still holds for the Palo Alto Medical Clinic today, despite its size. He recalled, "I was a frugal guy because I had been so poor. I said to myself there are two rules I am going to make: I am never going to ask a new man to be a partner here unless he is smarter than I am in the field we are bringing him in for, and also not until the present man who was doing that work was very overworked. That will mean the new man will have a practice."

Whatever impact that "frugal" attitude may have had on the group’s short-term finances, it also had a more lasting effect on the Clinic’s long-term ability to thrive. "The thing that made the Clinic a success was that Russ had no inferiority complex in his own personality. He went out to find the very best individuals he could find," said Dr. Robert Dunn, an obstetrician/gynecologist who joined the group in 1937. "Other groups had failed because strong leaders are always a little afraid of their own stature, so they tend to get inferior people instead of getting the best," he said.

By the early 1930s, the group had six physicians, too many to fit comfortably in the offices that Dr. Williams had established at Bryant Street and Hamilton Avenue. And so, Dr. Lee recalled, "we decided to organize formally as a clinic and to put up a new building." The doctors constructed a new office at the corner of Homer Avenue and Bryant Street – "an unheard-of remote location in those days" – and the newly named Palo Alto Clinic, Inc., set up business. (The group added the word "Medical" to its name in 1955, after the California Legislature passed a measure requiring it.)