Healthcare costs begin escalating rapidly, which is partially due to unexpectedly high Medicare expenditures; rapid inflation in the economy; the expansion of hospital expenses and profits; and changes in medical care that include the greater use of technology, medications, and conservative approaches to treatment.

American medicine is now seen as being in crisis. President Nixon's plan for national health insurance is rejected by liberals and labor unions, but his "War on Cancer" centralizes research at the National Institutes of Health (NIH).