As health care policymakers and providers focus on eliminating the persistent racial disparities in treatment, it is useful to explore how resistance to hospital desegregation was overcome. Jackson, Mississippi, provides an instructive case study of how largely concealed deliberations achieved the necessary concessions in a still rigidly segregated community. The Veterans Administration hospital, the medical school hospital, and the private nonprofit facilities were successively desegregated, owing mainly to the threatened loss of federal dollars. Many of the changes, however, were cosmetic. In contrast to the powerful financial incentives offered to hospitals to desegregate and ensure equal access in the early years of the Medicare program, current trends in federal reimbursement encourage segregation and disparities in treatment.