Until the 1880s, Canadian hospitals were institutions that cared for the sick poor, soldiers, sailors and recent immigrants who lacked family homes. By the 1890s, however, public general hospitals had begun to serve the middle and upper classes, leading to two-tiered care and increasing expenses for better accommodation and new technology. By 1929, Canada had approximately 954 hospitals, 481 of which were public general hospitals, 42 were mental hospitals, 31 were tuberculosis sanatoria, 33 were hospitals for incurables and 269 were private hospitals. Red Cross hospitals, convalescent homes and other hospitals accounted for the remainder.
The public general hospitals contained more than 32,000 beds, while private hospitals had only 2,500. But, through the 1920s, as operating costs rose, paying patients, their doctors and hospital administrators began to question the lack of public spending on such an important social institution.