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Democratizing Administrative Governance: How the Civil Rights Movement Shaped Medicare’s Implementation


David Barton Smith is Research Professor in Health Care Management at Drexel University and Emeritus Professor at Temple University.

This post is part of our symposium on democratizing administrative law. You can find all the posts in the series here.

In January 1966, the Johnson administration faced a regulatory battle between a risk-averse federal executive branch and the demands of a grassroots social movement.  Starting on July 1, 1966, federal Medicare funds would begin to account for more than 25% of the revenue of the nation’s 6,000 private acute care hospitals. Medicare would serve as the first real test of Title VI of the 1964 Civil Rights Act, which banned the allocation of any federal funds to entities that discriminated on the basis of race. The success of Title VI would depend on forging a strong relationship between officials administering the program and the civil rights movement. The change that ultimately resulted from this collaboration offers a concrete example of how democratic movements can leverage grassroots pressure, public enforcement and government spending power to transform sectors of the economy.

At first, most public officials, politicians and hospital leaders dismissed the implications of Title VI in the implementation of the Medicare program.   The issue had never come up in the debate over Medicare’s passage. Nothing in the wake of the backlash to the Watts riots in August 1965 suggested that the Johnson Administration was going to force the issue of segregation in hospital facilities.  As a vaguely worded platitude lacking any resources for enforcement, Title VI seemed designed to fail. Hospitals would face the same “all deliberate speed” protracted stalemate as the Brown decision had for public schools.

Beneath the surface, however, one of the most successful democratic regulatory transformations in this nation’s history began to take shape.  Depending on one’s perspective, it represented either the triumph of democratic values through the exercise of government regulatory power or the oppressive intrusion of those powers into the daily lives of individual citizens.

The civil rights movement had begun to confront segregation in hospital facilities before Medicare’s passage. In 1963, local civil rights leaders and the NAACP Legal Defense Fund (LDF) successfully challenged a provision in the Hill-Button Act of 1946 that permitted the allocation of federal funds for the construction of segregated hospitals. LDF, the National Medical Association, and the Medical Committee for Human Rights then organized an inspection program of Hill-Burton funded facilities, documented racially discriminatory practices and submitted more than 200 complaints to the Department of Health, Education, and Welfare (DHEW). The agency did not follow up on the majority of the complaints due to lack of staffing and almost none were resolved. In response, the organizations staged a demonstration and press conference outside DHEW Secretary John Gardner’s office in December 1965, arguing that the agency was losing a “golden opportunity” to end discrimination in the nation’s hospitals through the implementation of Medicare.

In response, Gardner recruited staff for his office to coordinate civil rights enforcement efforts.  These recruits, representing the same civil rights organizations that had been investigating hospital discriminatory practices, now authored the guidelines for hospital Title VI certification.  Hospitals had to eliminate all forms of racial segregation of patients and staff in the hospitals or they would not receive any Medicare funds.  Johnson, who in September 1965 had directed the decentralization of civil rights enforcement into the federal bureaucracy in an apparent effort to lower the political heat, now faced an unintended consequence of that decision. Although White House and high-level agency officials doubted the wisdom of this risky approach to hospital Title VI certification, no one tried to block its implementation. The White House only became aware in April 1966 that most hospitals in the South would probably not be eligible for Medicare.

The actual Medicare Title VI certification process was buried in the Office of Equal Health Opportunity (OEHO) in the Surgeon General’s Office of the Public Health Service. Created only in February 1966, it had a staff of five and no possibility of securing supplemental congressional appropriations to mount a serious enforcement effort.  Secretary Gardner, however, requested volunteer temporary transfers from other parts of DHEW to staff the enforcement effort and ensured that the pay and travel expenses of these volunteer transfers would remain on the books of their home agency.   The redeployment of about 800 volunteers proceeded secretly without any legislative oversight.  It would prove at times a dangerous assignment, but many of the volunteers had already engaged in civil rights protests and approached their new temporary “day job” with that same commitment. 

These volunteers received their orientation and training from the same civil right activists that had brought the lawsuits and complaints related to desegregating hospitals, now hired as paid consultants to the OEHO.  The real effectiveness of the effort, however, depended on an invisible army of local black hospital workers and civil rights leaders that made it impossible for local hospitals to conceal non-compliance.  In many instances, the temporary volunteer inspectors deferred to the judgments of these workers and activists when making their recommendations on Title VI certifications.   In so doing, the certification process pushed far beyond paper compliance.   Inspectors insisted on the fundamental redesign of hospital operations to block any possibility that hospital patrons and staff would self-segregate within entrances, waiting rooms, cafeterias or bed accommodations.  

Thus, the Civil Rights Act and Medicare, Johnson’s two signature domestic achievements, seemed to be set on a collision course.  Either Title VI would prove meaningless or many of Medicare’s new beneficiaries would have no access to hospital care. To the surprise of both proponents and critics, that collision never happened.  The continued pressure of civil rights movement activists, combined with the design of Medicare’s Title VI regulations, forced hospitals to choose between compliance or risking federal funds in a lengthy administrative appeal process. By July 1, 1966, almost all the hospitals in the South had opted for compliance.  Hospitals went from being our most racially segregated institutions to our most integrated almost overnight.  Statistics related to racial disparities in use and mortality narrowed. The success of Title VI in desegregating hospital facilities ultimately served as a model for Title IX of the Educational Amendments of 1972, which produced a similarly rapid transformation in universities that had previously limited access for women to programs and professional schools.

One anecdote particularly illustrates the power of this administrative approach to assuring equal rights for all citizens. In 1968, Robert “Dynamite Bob” Chambliss had surgery at a Birmingham Alabama hospital that had refused to treat a Freedom Rider seriously beaten by fellow Klan members in the bus station in 1961.  He demanded that the black male patient admitted to his room (randomly assigned as required by the Title VI guidelines) be removed or he would “bomb the hospital as he had bombed the church.” The hospital refused and he was discharged to the care of his family.  The FBI and local authorities, convinced of his guilt, chose not to attempt a prosecution because they did not believe they could obtain a conviction by a jury in Birmingham. It would take until 1977 before Chambliss was sentenced to life for the Birmingham church bombing that killed four children.  It would take until 2002 to convict his two surviving co-conspirators.  It would take until 2017, to elect U.S. Senator Doug Jones (D, AL), who had successfully prosecuted the co-conspirators.

The success of the rapid transformation of the nation’s hospitals achieved through Medicare’s implementation and, perhaps, others in the future, depend upon (1) persistent pressure by a grassroots social movement combined with broader moral repugnance, (2) publicly visible concrete standards and (3) strong preconditions on government spending.  The administrative state with the implementation of the Medicare program perhaps came as close as it ever has to Lincoln’s vision of a “government of the people, by the people and for the people.”  Certainly, to paraphrase Martin Luther King, “the arc of the moral universe bent toward justice” a lot faster.