Objectives: A Joint Planning Committee Report was issued in 1974 exploring how Stanford University might itself provide primary care to students, faculty, employees and their dependents at low cost. The report called for the creation of a health maintenance organization owned by its subscribers in affiliation with Stanford Medical Center. However, because the report was dismissed by the dean of the School of Medicine as being unworkable, the Midpeninsula Health Service (MHS) began operating as an unaffiliated, nonprofit health plan in downtown Palo Alto in January 1976. The MHS's planning, early operation, move to the Stanford campus, financial viability and ultimate fate are examined as an example of action research in health care.
Methods: Source documents were examined by the authors, a founding MHS board member and its two inaugural medical directors, in compiling a 30-year organizational history.
Results: The MHS was remarkably prescient in its early use of small primary care groups that included midlevel practitioners, the principles of evidence-based medicine, the participation of patients in self-care activities, and a commitment to the continuous monitoring and improvement of quality. Imputed annualized costs of care were 30% lower than contemporary fee-for-service care and 20% lower than that of Kaiser, with no discernible difference in health outcomes.
Conclusion: Action research methods can be useful in identifying and testing potential solutions to vexing problems in health care delivery.