The Hospital Survey and Construction Act is a U.S. federal law passed in 1946, during the 79th United States Congress. It was sponsored by Senator Harold Burton of Ohio and Senator Lister Hill of Alabama. In November 1945, President Harry S. Truman delivered a special message to Congress in which he outlined a five-part program for improving the health and health care of Americans. The Hospital Survey and Construction Act responded to the first of President Truman's proposals, which called for the construction of hospitals and related health care facilities, and was designed to provide federal grants and guaranteed loans to improve the physical plant of the nation's hospital system. Money was designated to the states to achieve 4.5 beds per 1,000 people. The states allocated the available money to their various municipalities, but the law provided for a rotation mechanism, so that an area that received funding moved to the bottom of the list for further funding. Facilities that received Hill–Burton funding had to adhere to several requirements:
They were not allowed to discriminate based on race, color, national origin, or creed, though separate but equal facilities in the same area were allowed. The Fourth Circuit Court of Appeals struck down this provision in Simkins v. Cone within its jurisdiction, and the provision was eliminated nationally by the Civil Rights Act of 1964.
Facilities that received funding were also required to provide a ‘reasonable volume’ of free care each year for those residents in the facility's area who needed care but could not afford to pay. Hospitals were initially required to provide uncompensated care for 20 years after receiving funding. The federal money was also only provided in cases where the state and local municipality were willing and able to match the federal grant or loan, so that the federal portion only accounted for one third of the total construction or renovation cost.
The states and localities were also required to prove the economic viability of the facility in question. This excluded the poorest municipalities from the Hill–Burton program; the majority of funding went to middle class areas. It also served to prop up hospitals that were economically nonviable, retarding the development wrought by market forces. Once Medicare and Medicaid were enacted, participation in those programs was added to the list of requirements for access to Hill–Burton funding.
The reality, however, did not nearly meet the written requirement of the law. For the first 20 years of the act's existence, there was no regulation in place to define what constituted a "reasonable volume" or to ensure that hospitals were providing any free care at all. This did not improve until the early 1970s, when lawyers representing poor people began suing hospitals for not abiding by the law. Hill-Burton was set to expire in June 1973, but it was extended for one year in the last hour. In 1975, the Act was amended and became Title XVI of the Public Health Service Act. The most significant changes at this point were the addition of some regulatory mechanisms and the move from a 20-year commitment to a requirement to provide free care in perpetuity. Still, it was not until 1979 that compliance levels were defined.
