During World War II, progressive southern leaders such as Claude Pepper and Lister Hill at the national level and Governor J. Melville Broughton and state health officer Carl V. Reynolds in North Carolina elevated health reform, particularly hospital construction, to the top of the political agenda. A variety of factors had laid the foundation for a large-scale federal hospital construction program that would represent the culmination of deluxe Jim Crow health policy's strange hybrid of New Deal redistributive liberalism and racial parity under segregation. Hospital construction programs funded by the Works Progress Administration, Public Works Administration, Lanham Act, state health agencies and municipal bond issues had achieved modest gains in the supply of hospital beds, while private-sector construction remained virtually stagnant throughout the Great Depression and World War II. The US Public Health Service (PHS), under the leadership of Thomas Parran, had established itself as an innovative leader in public health policy at the national and state levels and stood poised to administer an ambitious federal grant-in-aid program to promote centralized planning as well as expansion of hospital facilities. Physicians had expressed a willingness to support hospital construction as an alternative to national health insurance, and black medical and civil rights leaders saw the construction plan as a way to both improve blacks’ access to care and establish a legal precedent that defined participating hospitals as agents of the state that were bound to provide equal protection under the law.

Comprehensive Reform: The Crisis of Southern Hospitals

One of the central debates within deluxe Jim Crow health policy concerned whether reforms should be comprehensive, universal and federally administered or incremental, targeted to the needs of particular populations, and administered by state and local officials. The federal government's pre-1945 role in health has been described as the ‘politics of exceptions’, designed to provide care to groups with special needs that could not be adequately met in the private medical system. Before the New Deal, health services for merchant marines, entering immigrants, Native Americans, veterans, active military personnel, prisoners and drug addicts were provided in separately financed and administered federal hospital systems, with the mentally ill cared for primarily in state hospitals. The New Deal added health programs targeted to mothers and children, farm families, venereal disease patients and the wives of servicemen, groups that included disproportionate numbers of black as well as white southerners.