The Baylor Plan for prepaid hospital care

Justin Ford Kimball (1872 to 1956) had been superintendent of the Dallas public schools from 1914 to 1924. In 1929, the year of the stock market crash that began the Great Depression, he became vice president of Baylor University in charge of its College of Medicine, School of Nursing, College of Dentistry and hospital, all in Dallas. He found that Baylor Hospital was carrying a large number of unpaid bills, many of them owed by Dallas schoolteachers.

Adapting the prepayment schemes of the lumber and railroad industries, Kimball offered the teachers a plan: fifty cents a month, or six dollars a year, would pay for up to 21 days of semiprivate care at Baylor Hospital. By December 1929, 75 percent of Dallas teachers had enrolled, and within two years employees of the Dallas Morning News and the radio station WFAA had joined as well. The American Hospital Association invited Kimball to present a paper on how the plan worked and later elected him an honorary life member.

Planners soon moved to community-wide plans, in which groups of hospitals honored the same membership and subscribers could choose where to go. In 1933 E. A. van Steenwyk, head of a hospitalization plan in Minnesota, designed a poster with a blue Geneva cross, and the plans came to be known as Blue Cross. The American Hospital Association set national standards, and its crest sat at the center of the cross until 1972. A California plan of 1939 paid physicians instead of hospitals; its blue shield bearing a caduceus became the mark of Blue Shield.

In Texas, a group chartered in 1939 as Group Hospital Service was approved by the American Hospital Association in 1942 as the Blue Cross plan of Texas, and in 1944 the Baylor Plan was dissolved and its members moved to it. When Medicare began in 1966, Blue Cross and Blue Shield of Texas became an intermediary for the program.