A consensus was building that facilities for the aged should focus on providing medical care, as well as residential care, and legislators decided to actively promote the development of skilled nursing homes. In 1954 the Hill-Burton Act was amended to provide funds to nonprofit organizations for the construction of skilled nursing facilities that met certain hospital-like building standards, if built "in conjunction with a hospital".
The Hill-Burton amendments created a number of precedents. The changes represented the first time that legislation specifically included nursing homes as part of the health care system rather than the welfare system, and created an expectation that the physical design of nursing homes would be based on hospital design. The Hill-Burton regulations placed nursing homes under the jurisdiction of the National Health Service, ensuring that future regulatory oversight would be medical in nature, and they represented the first time that federal funding for nursing homes was tied to standards for construction and design, staffing patterns, and other medically-oriented concepts.
If all nursing homes had been built under these standards after 1954, some of the quality problems that later emerged might not have occurred. But Hill-Burton financing was limited to a small group of non-profits affiliated with hospitals, so these standards had little impact on the vast majority of new nursing home construction. Ironically, restricting the funds to hospital-affiliated non-profits was intended to increase the quality of nursing homes, but it had the opposite effect. Developers who couldn't qualify for Hill-Burton funds continued to build thousands of new facilities with no reference to Hill-Burton standards. When regulators later decided that all nursing homes should meet the higher qualifications, it was too late. Trying to make the nursing homes fit the standards many years after they were built was nearly impossible.