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I agree with your comment, but mostly because hospitals were just becoming routinely used medical facilities by the FDR days.

Health Insurance in the United States

1930-1940: The Birth of Blue Cross and Blue Shield

Blue Cross: Hospital Insurance

As the demand for hospital care increased in the 1920s, a new payment innovation developed at the end of the decade that would revolutionize the market for health insurance. The precursor to Blue Cross was founded in 1929 by a group of Dallas teachers who contracted with Baylor University Hospital to provide 21 days of hospitalization for a fixed $6.00 payment. The Baylor plan developed as a way to ensure that people paid their bills. One official connected with the plan compared hospital bills to cosmetics, noting that the nation's cosmetic bill was actually more than the nation's hospital bill, but that "We spend a dollar or so at a time for cosmetics and do not notice the high cost. The ribbon counter clerk can pay 50¢, 75¢, or $1 a month, yet.... it would take about twenty years to set aside a large hospital bill" (The American Foundation 1937, p. 1023).

Pre-paid hospital service plans grew over the course of the Great Depression. Pre-paid hospital care was mutually advantageous to both subscribers and hospitals during the early 1930s, when consumers and hospitals suffered from falling incomes. While the pre-paid plans allowed consumers to affordably pay for hospital care, they also benefited hospitals by providing them with a way to earn income during a time of falling hospital revenue. Only 62 percent of beds in private hospitals were occupied on average, compared to 89 percent of beds in public hospitals that accepted charity care (Davis and Rorem 1932, p. 5). As one pediatrician in the Midwest noted, "Things went swimmingly as long as endowed funds allowed the hospitals to carry on. When the funds from endowments disappeared the hospitals got into trouble and thus the various plans to help the hospitals financially developed" (American Foundation 1937, p. 756).

The American Hospital Association (AHA) encouraged hospitals in such endeavors ostensibly as a means of relieving "... from financial embarrassment and even from disaster in the emergency of sickness those who are in receipt of limited incomes" (Reed 1947, p. 14). However, the prepayment plans also clearly benefited hospitals by giving them a constant stream of income. Since single-hospital plans generated greater competition among hospitals, community hospitals began to organize with each other to offer hospital coverage and to reduce inter-hospital competition. These plans eventually combined under the auspices of the AHA under the name Blue Cross.