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Excerpt from Oral History Interview with George Watts Hill, January 30, 1986. Interview C-0047. Southern Oral History Program Collection (#4007) See Entire Interview >>

Organization of Blue Cross/Blue Shield in North Carolina

Hill discusses his participation in the formation of North Carolina Blue Cross/Blue Shield during the 1930s. During those years, Hill was presiding the management of Watts Hospital, founded by his father and grandfather in 1907. With other community business leaders, he helped to form various nonprofit insurance organizations, which eventually culminated in Blue Cross/Blue Shield.

Citing this Excerpt

Oral History Interview with George Watts Hill, January 30, 1986. Interview C-0047. Southern Oral History Program Collection (#4007) in the Southern Oral History Program Collection, Southern Historical Collection, Wilson Library, University of North Carolina at Chapel Hill.

Full Text of the Excerpt

Now, in '33 there also was the North Carolina Blue Cross/Blue Shield.
There was the Blue Cross. Dr. Davison, then of Duke University, he came down here as the chief resident from Hopkins - had been in England and he had had some relationships, some knowledge, of hospital insurance; not what we'd organized here but something on the way toward that. And it was a Depression time and I was running Watts Hospital at the time.
Now you say running, you mean as an administrator?
No, I was president of the board, unofficial president, you might say, and my auditor in the office was Bo Harris, whom I'd brought over from the city. We were on the same floor as my father; both offices were in the Trust Building later and in the CCB Building. I had a Director of the hospital. And the three of us ran the damn place. There wasn't any question about it. I had built an addition, the Private Patient Pavilion, in honor of my grandmother, through funds my grandfather had left. I got the hospital up to ninety-one patients capacity, and eventually to 301. But we were having a tremendous loss, we thought at that time; looking at it now, hell, it was just chicken feed. But it was vital to keep the hospital going. We didn't have much coming from the city or the county in those days - $1,000 apiece or something like that. And the charity patients, part-charity patients, were a tremendous percentage. Same thing at Duke; Duke had started in '24 and they built Duke South, we call it now. Davison was up against the same thing. And we started Blue Cross. And I gave them an office in the old Trust Building and we brought Lash Herndon in as manager and I don't know why - he was an insurance agent, or something, to start with. And we slowly grew and at one time we had Duke put up $50,000 as a loan and I put up $50,000 personally. We never used it; we had it. It was $100,000, big money in those days. And Blue Cross slowly grew and moved over to where Guaranty State is now, on the second floor, and then, eventually, when we built the Insurance Company Building on Chapel Hill and Duke street, Blue Cross had a floor up there. They paid a little rent but not much. In '30, Dr Manning, Isaac Manning here in Chapel Hill, we helped him get $25,000 somehow, somewhere. I've forgotten how. He went to Charlotte and organized (with Graham-Davis) the Hospital Savings Association about a year and a half after we had started Hospital Care. Duke and Watts Hospital controlled Hospital Care. We had the Duke vice-president for finance on the board, and my then-bank president was the president. All non-profit. And naturally I had the bank account - naturally. [laughter] But, that's all I got out of it.
Now, this was all non-profit.
All non-profit. And we eventually - it was then Blue Cross - I helped them buy forty or fifty acres where the Blue Cross is now. And I got Alec McMahon eventually (Alex was then the secretary of the County Commissioners Association, headquartered in Raleigh) I got him in as president of the Hospital Savings, our opposition. We were fighting each other. We had a smaller number of members than Hospital Savings, but we had more cash and greater investments and so forth, than Hospital Savings. Eventually we went to Greensboro and I preached a sermon and "got the Lord on my side," as the old expression goes. We combined the two and John Harris, became the president, and Joe Eagles of Wilson, then business manager in the university, was vice president of savings. We combined the two into "Blue Cross/Blue Shield of North Carolina." Savings had been able to obtain the Blue Cross, which was hospitalization, and Blue Shield was medical. They had obtained approval of the use of Blue Cross hospitals and they had kept Hospital Care from getting Blue Cross. And we, the three of us (a hospital man, a doctor, and I was the public representative) went to Colorado Springs. Again we "got the Lord on my side." We got there before Hospital Savings and we sold a bill of goods to the National Blue Cross Association and got approval. And I know Manning was so mad. So was Crawford, who was their vice-president of savings. They were terribly upset. But once we got that Blue Cross, we both had Blue Cross/Blue Shield and we could combine them and it became proper to combine them, at one time, though just exactly when I don't remember, I don't remember a date, but I can remember putting it together. Then we built the new building and brought Tom Rose to Chapel Hill when Alec McMahon went on to be President of American Hospital Association.