1959 – Hewlett Speeches

Box 1, Folder 18 – General Speeches


January 4, 1959 – Talk to Palo Alto Chamber Of Commerce on Medical Center


1/4/59, Outline of speech, handwritten by Hewlett, in ink, on lined notebook paper


I Introduction

  1. Aims and Goals
  2. Problems


II A Major Medical Center

  1. What makes a major medical center
    1. Teaching – Research – Practice of medicine
    2. All strongly based on a first class hospital


  1. Elements of the Hospital Center
    1. Stanford Pavilion
    2. Palo Alto Pavilion
    3. Core facility
    4. Stanford outpatient
    5. Stanford Rehabilitation
    6. Existing P. A. hospital


  1. Responsibilities
    1. Teach – Stanford
    2. Residents – Stanford
    3. Practice at P.A. and Stanford


D. Have been divergences – aim will be to pull together


III  Problem – Money

  1. Background Planning
  2. Change of Plans
    1. Report of last year: over bedded, OB the worst
    2. Place OB in new building
    3. Old hospital plans


IV  Status

  1. Set by July
  2. Closing Old hospital will help shake down
  3. Should be pretty well shaken down by this time next year



Box 1, Folder 19 – General Speeches


April 9, 1959 – “The Development of a Medical Center,” Palo Alto Hospital Employee Award


4/9/59, Outline of speech, handwritten by Hewlett on lined notebook paper. [See also speeches June 18, 1959 and December 2, 1959, on this subject.]


I  Past History


A  Student Guild Hospital – 1909

Litton and Cowper

First students the Palo Alto residents



B  Private Hospital

Reynolds, Williams, Kirk, Black

Built own hospital, 3 story frame at Cowper and Embarcadero     1910-1917 – old fire trap

Fell on poor days during World War I

Palo Alto bought in 1917/1918


C  Palo Alto Hospital

Asked Stanford to run

Ran a tight ship, made money

One of first X-ray

By 1928 was inadequate for size and real fire trap.

1926 fire had caused roof to fall into operating room


D  New Hospital

Some funds were made available by philanthropists …for the establishment of a non-profit hospital. Because of the experience of the old private hospital, Dr. Leary [?] sought to interest Palo Alto and Stanford in starting another hospital. In 1929 Roth got Stanford to give money, and Ed Thorts [?] got Palo Alto to match funds:

Palo Alto – 200,000

Fund [?] – 160,000

Built hospital in 1929 and 1930 for about $3000 a bed. Filled up at once. Still managed by Stanford.


II Problems of Joint Operation


A  Two things obvious

  1. Great advantages

2.   Great problems

B  Problems

  1. Having greatness thrust upon us – Must reorganize and reorient our thinking
  2. Suspicion springs from lack of understanding
  3. This last improved by having doctors getting together. Palo Alto people do not have new concept of Medical Center


C  Advantages

1      Tell what I think will happen

2      Tell why

Major western University Medical Schools few

Privately endowed have certain advantages

Palo Alto an ideal community – people understanding and far sighted, climate and physical location


“I saw again that this area was destined to become the major medical center of the West and to be one of the foremost in the Nation. That is if we thought of this operation in lesser terms we are doing ourselves a disservice and, like Esau, selling our potential for a pot of porridge.


“All of you have a major stake in the future.”



Box 1, Folder 20 – General Speeches


June 4, 1959 – Address to Third National Conference of IRE Professional Group on Production Techniques, San Mateo, CA


6/4/59, Outline for speech written by Hewlett on notebook paper. Hewlett was the Keynote Speaker.


Hewlett says he is “not so stupid as to speak on electronic production” – will present a broader discussion of production techniques



For background Hewlett goes back to the Industrial Revolution, starting in England. He says it started with Richard Onwright [?] and the cotton spinner.


He says a Frenchman named Vaucanson [?] developed a silk factory in 1756, but France was not ready – a luxury product.


In England cotton mass produced, needed for export. Could not do in new locations isolated away from old guilds and monopolies of ruling class.


In Europe the emphasis was on simple crafts – weaving, spinning, iron making.


Situation in the U.S.


The situation was quite different in the United States Hewlett says. Large country, large problems, large solutions needed. Shortage of labor, high labor costs, national independence – not cluttered with traditional ideas.


He says the U. S. turned to the mechanization of complete crafts – and he gives a few examples:


Oliver Evans, at the end of the Revolution built a completely automatic flour mill.


Eli Whitney and the cotton gin


In 1836 a complete threshing machine was available that would thresh, clean and sack.


Farm equipment, with a long list of replacement parts, was available by 1866 – 50 years before Ford.


By 1860 an assembly line was used in a meat packing plant in Cincinnati.


Developed on the basis of creative concepts – not hardware.


Role of Production Management


Long history of pioneering in this field. In the 1880s Fredrick Taylor, father of Production Management:


Set production norms by scientific method – broke away from old apprentice system.

Study led to shorter hours and rest periods – resulted in increased production at same pay

Introduced incentive pay

Established scientific job training

Developed status of foreman and supervisor


Followed by Frank Gilbert with Time and Motion Studies, and

Henry Gantt, ideas on incentive pay and cost accounting. Charts still bear his name.


Willingness to invest Capital


10 fold investment/worker in last 75 to 80 years

4-5 fold increase in physical product/worker

Made U.S. the greatest producing country in the world – turning out twice as much per worker compared to any other country.


What this means today


“The U.S. is no longer an isolated self sufficient country. It is a major factor in the world today. As such it has a dual challenge to its productive capabilities and resources.


“The secret of U.S. production is well known and understood. Other nations of the world are making concerted efforts to catch up. On the whole this is good for it lifts the general standard of living, but for the American manufacturers it spells real competition.


“The U.S. has the real responsibility to fight the economic war with Russia. The Russians are smart, capable people who are in a position to capitalize on the best in our system. This is where the real challenge is. The battle lines will be drawn in the long run on the basis of production ability.


“I think it is particularly significant that the leading engineering society in the country today has seen fit to establish a major group dedicated to the improvement of production techniques. The character of the speakers and the quality of the papers to be presented at this the 3rdConference on Production techniques indicated that the electronic industry is ready and able to meet and take up this challenge.”


6/4/59, Copy of the printed program for the conference

5/22/59, Letter to Hewlett from Emmet G. Cameron, Program Chairman, reminding him of the program schedule and sending a copy of all technical presentations

6/5/59, Letter from F. K. Shallenberger enclosing some material that may be helpful to Hewlett in preparing this speech



Box 1, Folder 21 – General Speeches


June 18, 1959 – Presentation to Finance Committee, Stanford Board of Trustees


6/18/59, Outline of speech, handwritten by Hewlett on notebook paper


I  Definition of Palo Alto – Stanford Hospital


A   By agreement of 29 May 1956, Palo Alto and Stanford agreed to form a non-profit organization to manage and run the following:


  1. Palo Alto Pavilion
  2. Existing Palo Alto Hospital
  3.  Stanford Pavilion
  4. Stanford Outpatient Clinic
  5. Stanford Rehabilitation Clinic
  6. Core facilities


B  Board of Management is Responsible to:


  1. Manage, control and set general policies
  2. To prepare budget and submit to owner:
  3. Make recommendations to owners as necessary


C  Board of Management General Views of the Operation


  1. Run a top level and tight show in a business-like manner, make clear to owner the proper proceeds, true costs of the operation.


II Areas of Discussion


“A  Hospital Budget –2 Pavilions and core

  1. As carefully worked out as possible
  2. Review by Palo Alto and approved
  3. General review by Stanford staff
  4. Discuss allocation of income and expense
  5. Will ask approval


B   Requirement for Working Capital

And other medical cash outlays – will ask approval


C   Clinic Budget

  1. Preliminary draft – information only


D   Rehabilitation and Old Hospital



III   Hospital Budget


A   Summarize Letter

  1. [?]
  2. Expense comparisons
  3. Rate structure
  4. Budgeted surplus of $52,000
  5. Method billing to Stanford


B    Discuss Fixed Costs

  1. Ordinarily educational institutions do not amortize plant
  2. Equipment replacement fund


C   Capital Costs

  1. Capital items
  2. Contingent [?]
  3. Balance against equipment sinking fund


D   Allocations

1      Method

2      Result

3      Cash reconciliation…$6,107 short

4      Payments to Stanford staff of almost $150,000 for professional services


E   Working Capital

  1. Total estimated 609,000
  2. Allocation 1/3 Stanford, 2/3 Palo Alto
  3. Palo Alto prepared to turn over present working capital in hospital, less $90,000 needed for  [?] payments
  4. Ask that Stanford furnish before July 1:


  1. 100,000 now
  2. Estimated Stanford payments

50,000 August

50,000 September

48,000 October

  1. Palo Alto make final payment @ 21,000 in fall



IV  Clinic Budget

A. Preliminary only

B.   Estimate 677,570, or 13.55 a visit

C.   Offset with Proper Rates – structure to show deficit of 64,134

D.  Discussion of rate structure


V   Rehabilitation – Old Hospital –discussion


VI  Action Required

A   Approve Budget

  1. Approve use of $100,000 sinking fund
  2. Approve method of allocation
  3. Approve principle of Working Capital allocation
  4. Agree to schedule of payments



Box 1,  Folder 22 – General Speeches


December 2, 1959 – On Palo Alto Medical Center, Palo Alto Residents Association


12/2/59, Outline of speech handwritten by Hewlett on lined notepaper


I   Hospital Center like Iceberg

A)    Have been working on budget

B)     What most people see is plant

C)     In case of Center what is behind is important

D)    Therefore, would like to talk about:

1)     Background

2)     Plant

3)     Finances


II   Discussion of Medical Education

A)   Background

B)    Flexner [?] report of 1910

C)    Rise of great leaders of clinical medicine

D)    Recognition of trend towards science promoted move of Stanford to Palo Alto

E)     Comparison with Engineering

F)     New connection at Stanford



III   Development of Medical Center

A)     Reason to move catalyst [for] other action

1)     V.A. Hospital – 1000 beds

2)     Palo Alto became partner plans


B)     Relations between Palo alto and Stanford Medical School

C)     Ultimate role of Center


IV   Physical Plant


A)     Basic Elements of Plant

1)     Core plus 2 Pavilions

2)     Old Palo Alto Hospital

3)     Outpatient Clinic

4)     Rehabilitation Center

5)     Edward Building

6)     Center Building


B)     Description of Plant

1)     Location – 56 acres

2)     General layout

3)     Architect – Ed Stone

4)     Tie in with Stanford style

5)     Cost: Stanford – $16.9M

Palo Alto – $4.1M

V   Operation

A)    Administration

B)     Opening

C)     Professional staff

D)    Finances

1)     Competition for tax support hospital

2)     Importance of occupancy

3)     Importance of attracting patients

4)     Basic costs

5)     Working capital $1600/active bed

6)     Budget balance for year


VI   Summary

A)    Wonderful Plant

B)     Outstanding medical staffs

C)     Real challenge is the degree to which staffs can work together

D)    If they do we should have the finest medical center west of Mississippi, or one of the finest in the country


Undated, Outline, written by Hewlett, covering  background of hospital development in Palo Alto. Similar to speech given April 9, 1959.

11//23/59, Letter to Hewlett from Robert J. Debs of the Palo Alto Residents Association inviting him to come and speak to their group about local medical facilities

6/22/59, Handwritten note to “Bill” from “Lyle” giving some facts about hospital operations

Undated, typewritten sheet giving dates of events in hospital development in Palo Alto