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Chapter 6

A Decade of Progress - Contents

Administration and Management

The truth is, that medicine, professedly founded on observation, is as sensitive to outside influences, political, religious, philosophical, imaginative, as is the barometer to the changes of atmospheric density.-OLIVER WENDELL HOLMES.

General Heaton endeavored to effect the integration of all the skills and facilities available to him to achieve his goal of the practice of total medicine.

In addition to those activities directly concerned with preventive medicine, patient care, military medical research and development, and combat readiness, General Heaton directed his attention to the more efficient management of the Army Medical Department. One of the cardinal principles of his fivefold concept of operations, it will be recalled, was to improve military medical administration.


Hospital Command Management System

The development of sound management practices was a major objective of the Department of the Army for more than a decade. Toward this end, the Army Command Management System was designed and implemented beginning in 1956. The Command Management System was introduced in an effort to provide a single integrated method for Army programming, budgeting, cost accounting and reporting, and a general streamlining of Army management methods. The goal was the


development of a system to bring together what had been essentially two basic management processes-the program management system and the financial management system.

The objective of the Army Command Management System was to produce the kinds of data necessary for commanders at all levels to control missions and resources and to enable them to adjust resources to both long-range and immediate changes in missions and mission priorities. Basically, it involved establishing a direct command responsibility in each installation and agency for the management of peacetime nontactical activities. It was aimed not only at improving the system of fiscal responsibility but also at creating an atmosphere in which management could be exercised more fully.

Since mid-1959, the Army Command Management System, of which the Hospital Command Management System was an integral part, has been functioning at all of the installations and activities under the command of The Surgeon General that operate under the appropriation entitled "Operations and Maintenance, Army." Experience in the program-budget cycles since that date has confirmed the soundness of the basic concepts of the system. Because of the alinement of the program and budget cycles, the utilization of programs as the basis for the development of the budget was greatly facilitated. Perhaps more important, it made it possible to evaluate readily the adequacy of financial resources for the accomplishment of assigned missions, objectives, tasks, and workloads. The extension of the Hospital Command Management System to appropriate installations and activities under the command of The Surgeon General strengthened the administrative control over their activities and provided a mechanism by which programs and program decision could be reflected in Medical Department budget justifications.

As a guideline to measure progress, the Army Command Management System provided that success in the accomplishment of fiscal year program objectives


was to be measured through a process of review and analysis. This review and analysis had been a prominent feature of the predecessor of the Army Command Management System, the Primary Program System, but under the new arrangement of close relationship between appropriations and goals it become more meaningful. Formal review and analysis at each level of command was performed at least once each quarter. At each level of command or operation, the respective commander or head was responsible to the next higher echelon of command or operation for effective accomplishment of the assigned mission and proper use of funds made available. Review and analysis at each successive level culminated with overall review and analysis by the Office of The Surgeon General staff agencies having primary responsibility for each program and finally a composite review of all programs by The Surgeon General. This composite review thus became a vehicle by which The Surgeon General could identify and take steps to cope with specific problems.

"Find-it, Fix-it"-A New Approach to Internal Review

The introduction of the Army Command Management System stimulated interest in the more effective execution of the internal review program. In a series of administrative letters published in 1962, General Heaton established the basic policy to govern internal review procedures at the Office of The Surgeon General. In contrast to the specialized and technical review and analysis procedures formally prescribed by the Command Management System, this policy was designed to promote operator participation and to increase the incentive toward accomplishing the objectives of the program. The "find-it, fix-it" concept was inaugurated, and informality was encouraged.

The informal internal review reporting procedures and the "find-it, fix-it" concept initiated by General Heaton resulted in overall improvement of the working relationship between operating and internal review personnel.


This improvement, in conjunction with the application of the principle of "management by exception" which focused attention on weak and troublesome areas, resulted in improved financial management at the Office of The Surgeon General.

Hospital Methods Improvement Program

Department of the Army Pamphlet 20-557, "Staffing Guide for U.S. Army Hospitals," issued in October 1958, provided guidance for determining the number and type of personnel required to operate U.S. Army hospitals of varying sizes and workloads. The qualitative staffing information contained in the guide was designed primarily to aid in staffing hospitals at the installation level and in properly identifying positions in hospital tables of distribution. The guide did not constitute an authorization for personnel. While intended chiefly as a means of guidance for determining proper personnel requirements for performance of hospital functions, the guide also had an important aim-the conservation of manpower resources. In accordance with the Department of the Army policy of exercising utmost economy in the use of manpower, every effort was made to operate within the allowances and ranges of the guide, or to operate with fewer personnel.

Army Regulations No. 40-202, dated 29 October 1958, revised the hospital staffing report, Assignment and Utilization of Army Medical Department Personnel, to reflect the incorporation of the composite medical care work unit which was agreed upon late in fiscal year 1958. This new work unit, which was considered a better index of hospital workload, combined in weighted fashion the numbers of beds occupied, admissions, births, dispensary and clinic visits, and physical examinations. The combining of inpatient and outpatient care work units eliminated the need for prorating medical care personnel at the hospital level between those charged to inpatient care and those charged to outpatient care.


This action, in conjunction with the realinement of the functional table in the report to conform with the management structure prescribed in Army Regulations No. 1-11, made the report not only easier to prepare but also more meaningful for purposes of analyzing personnel utilization. It provided a better basis for comparing personnel utilization between hospitals where inpatient workloads and outpatient workloads varied in proportion to one another. Personnel reporting was more accurate because of the elimination of the arbitrary proration between inpatient and outpatient care, and workloads were more realistically portrayed through the use of the composite work unit. While these were technical points, they were important in that they improved the validity of the report and enhanced the use of the data it contained in making studies of personnel utilization within the hospital as well as in evaluating personnel performance between hospitals, between major commands, and among the three medical services, and also in distributing medical care personnel among the functional elements of the hospital.

The Medical Department established a system in February 1960 whereby its hospitals and dispensaries could report noteworthy improvements developed in the management of their facilities to the Office of The Surgeon General. This office then consolidated and published lists of information concerning these improvements and distributed them to each hospital and dispensary. The objective of the management information exchange program was to provide better patient care, which could be more readily achieved by constantly striving to improve methods, procedures, and equipment throughout the entire hospital and dispensary system. The system provided for the publication of information lists on a continuing basis, and it was intended that efforts would be made to include improvements accomplished in medical facilities of other Federal agencies as well as some civilian hospitals.


Administrative and Professional Management Improvement Program

Management in the Army Medical Department was comprised of two principal parts. The first was professional management which encompassed all efforts directly related to preventive medicine and actual medical treatment. The second part was administrative management which included all activities necessary to support professional management. These parts were not independent, and neither would be effective without the other.

A plan for management improvement, covering administrative and professional management, was evolved during 1960 and approved by The Surgeon General. This plan had a number of broad objectives. One was to develop and standardize techniques, materiel, and services to lower the incidence of disease and injury throughout the Army. A second was to curtail or eliminate costly administrative and professional practices which did not contribute directly to the maintenance of a high standard of patient care. A third was to reorient and rehabilitate clinic services in the Army in accordance with their expanded role in the diagnosis and treatment of patients. The fourth was to assure that current and proposed systems allowed commanders of class II installations and activities maximum flexibility of operational decisions in utilization of available resources. The fifth objective was to assure that the basic policy pertaining to supervision by the Office of The Surgeon General of Medical Department operations was one of minimum direction and of maximum assistance and guidance.

The Army Medical Department's Plan for Management Improvement, The Surgeon General's plan for improvement of medical management, was published in September 1961. It provided guidance for planning, organizing, directing, coordinating, and controlling administrative and professional management improvement activities. It reflected an organized effort for the detec-


tion of areas in need of improvement, the development of required improvements, and the application of such improvements to operations.


Mechanized Financial Accounting

The Army Medical Department supported an extensive program for the modernization of financial accounting operations through mechanization in the period from 1960 to 1964. This program was initiated in order to improve the quality and timeliness of the financial data supplied to management personnel at all levels of command. The design of the system was also adaptable to future utilization of electronic computers wherever feasible. The electrical accounting machine element of this improvement, which utilized conventional carriage-type accounting machines for posting subsidiary ledgers, with the simultaneous preparation of punched-paper tapes, permitted the preparation of most internal and external reports by punchcard methods, resulting in more accurate and timely data from field installations.

Procedures and equipment, which were pilot tested at Walter Reed Army Medical Center in 1959, were installed at Letterman, Madigan, and Valley Forge General Hospitals during 1960. Preliminary planning and action was later directed toward the mechanization of the remaining class II hospital finance and accounting offices (at Fitzsimons and William Beaumont General Hospitals and at Brooke Army Medical Center). The finance and accounting procedures being installed in the class II hospital system were also modified for compatibility with automatic data processing equipment at the Louisville Medical Depot, Louisville, Kentucky.

By 1963, the seven class II hospitals and medical centers were converted to punched-card reporting procedures. The cards received at the operating agency accounts office, Office of The Surgeon General, contained


feeder data, inclusive of all requirements for preparation of current and cumulative expenditure and status of funds reports, in a format for immediate assimilation into consolidation routines. During the same year, implementation of mechanized military pay procedures was initiated on a phased basis. In addition, action was taken to procure equipment necessary for the mechanized check-writing for civilian payrolls and military checkrolls at one class II installation.

A thorough evaluation of the mechanized accounting methods and the validity of the accounting product completed in 1964 indicated that mechanization had resulted in more accurate and timely data. Meanwhile, interest in the substitution of automatic data processing systems for mechanized systems had grown considerably. As a result, the program for the computerization of finance and accounting systems gradually developed in the period after 1964.

Automatic Data Processing Systems

The function of medical records is twofold: to provide for the care of the individual and to yield statistical information which will guide administrative policy leading to improved health conditions. Mechanical methods for handling large volumes of records were not new to the Army Medical Department. The fact of the matter is that the Medical Department was a pioneer in the use of mechanical equipment for tabulating records. The basic ideas of modern recordkeeping and the potential of high-speed data manipulation and computation were understood well before World War II. Only the speed limitation of the tabulating equipment available prevented their full realization.

This early experience provided the stimulus that led to the recognition of the potential benefits to be derived from the application of electronic data processing to the business-type operations of the Medical Department. The Surgeon General therefore appointed an Automatic Data Processing Systems Group to assume responsibility for


the development of a program. In appointing this committee, he indicated the need for long-range planning in this field, with due caution observed to avoid too rapid conversion of existing procedures by use of electronic data processing methods without critical evaluation, and any attempt to create theoretically perfect application without due consideration of the Medical Department's ability to absorb and utilize the new ideas and techniques. These two reminders became the guiding principles for subsequent development of the program.

The Automatic Data Processing Systems Group began formulation of a long-range program aimed at the creation of a system employing individual equipment installations in a coordinated manner with a view to ultimate full integration. In the initial phases of the program, the acquisition of equipment was subordinated to the establishment of desired goals on a Department-wide basis and the development of related systems and procedures. The major functional areas in which program development was concentrated were personnel, medical statistics, supply accounting, and finance and accounting. Investigation of the potential value of electronic data processing systems at class II installations was a matter of primary consideration.

The overall objectives established for the program were to provide: (1) economies in dollars, manhours, and processing time; (2) current and reliable data to be used by management in making decisions; (3) data that was necessary but not otherwise available; and (4) a potential for expansion to meet operational and mobilization needs without a proportional increase in personnel and financial outlay. The effort in the period from 1960 to 1965 was directed largely toward a relatively short-range goal of substituting electronic computers for electrical data processing equipment at the Office of The Surgeon General and at class II hospitals and medical centers.

The updating of data processing systems was established and formalized as a specific objective in The Sur-


geon General's Plan for Management Improvement for the first time in fiscal year 1962. Subsequently, the program gained momentum with each passing year. The Automatic Data Processing Systems Group entered into the final stages of the development of a total integrated automatic data processing system for the Office of The Surgeon General during fiscal year 1965. Data automation requirements covering all systems were scheduled for completion by the end of the first quarter of fiscal year 1966. Detailed systems specifications that were to serve as a basis for obtaining equipment proposals from computer manufacturers were scheduled for completion by the end of the second quarter of fiscal year 1966. This system under development was to provide more complete data processing support to various activities within the Office of The Surgeon General, including planning and operations, supply, personnel and training, collection and evaluation of medical statistics, budgeting, and fund accounting. It was anticipated that through the extensive use of computer-type equipment, these and other activities would be able to function with greater efficiency, speed, accuracy, and flexibility.

Progress in the installation of electronic data processing equipment at class II installations was also marked. International Business Machines Corporation 1440 automatic data processing computer systems were installed at Brooke and Walter Reed Army Medical Centers and at Fitzsimons General Hospital during the third quarter of fiscal year 1965. The Supply Accounting System became operational at Walter Reed Army Medical Center in May 1965. The computer system for the Office for Dependents' Medical Care became operational at Fitzsimons General Hospital in May 1965. The Inpatient Accounting System became operational at Brooke Army Medical Center in June 1965. The Personnel Accounting, Financial Accounting, and Military and Civilian Pay Systems were in the programming phase at the close of the fiscal year. An International Business Machines Corporation 1440 card processor was in-


stalled at William Beaumont General Hospital in May 1965. In April 1965, Valley Forge General Hospital assumed the additional mission for providing data processing support to the U.S. Army Medical Materiel Agency, which had been moved to Phoenixville, Pa., from Brooklyn, N.Y. Medical Department observers continued to participate in the Veterans' Administration's Automated Hospital Information System (formerly Hospital Automation Project) Program. This multipurpose automated data system was designed to incorporate all patient data necessary to the operation of the Veterans' Administration hospitals.

By fiscal year 1965, the installation of automated data systems at the Office of The Surgeon General and at the class II hospitals and medical centers for use in the business-application areas of supply, personnel, patient and financial accounting, and payroll was drawing to a successful conclusion. Overlapping this achievement was the increased use of electronic data processing equipment in Medical Department research and educational activities. The Radio Corporation of America 301 computer system for the U.S. Army Medical Research and Nutrition Laboratory underwent a successful performance evaluation by a Department of the Army team in October 1965. Approval was obtained to install an Analog to Digital Conversion System to increase the capability for use of the Radio Corporation of America 301 computer in support of the entire laboratory research effort. In June 1965, announcement was made by the Department of the Army of the selection of a computer for processing medical-record data at the Armed Forces Institute of Pathology. A Data Automation Requirement for expansion of existing computer facilities at the Walter Reed Army Institute of Research to accommodate a proposed biomedical research and evaluation data processing system was submitted to the Department of the Army. The system would provide for the establishment of a "Facility of Mathematics and Computer Sciences" at the Institute, using modern meth-


ods of data acquisition and handling for the orderly and timely pursuit of assigned missions in medical research and education.

By the beginning of fiscal year 1967, computer systems were in use at the class II hospitals and medical centers, medical research facilities, the Armed Forces Institute of Pathology, the Office for the Civilian Health and Medical Program for the Uniformed Services, and the Office of The Surgeon General. With the installation of an International Business Machines Corporation disk-type computer at Valley Forge, Madigan, and William Beaumont General Hospitals, the replacement of punch-card equipment was completed at all class II hospitals except Letterman General Hospital. Electronic data processing support of medical research and other medical activities was expanded during the year. An International Business Machines Corporation 360/30 configuration with magnetic tapes went into operation at the Office for the Civilian Health and Medical Program for the Uniformed Services in April 1967, and a similar system was established at the Armed Forces Institute of Pathology in May. Equipment specifications were developed for a large-scale computer system at the Walter Reed Army Institute of Research to replace the International Business Machines Corporation 1401 configuration in use there.

During fiscal year 1968, an International Business Machines Corporation 1440 disk-type computer was installed at Letterman General Hospital in August, completing the standardization of electronic data processing equipment at the seven class II hospitals and medical centers. In addition, standard computer-type systems for financial and accounting and supply control went into operation at all the class II hospitals and medical centers. Standard inpatient accounting systems were initiated at three installations and were scheduled for implementation at the remaining class II hospitals in fiscal year 1969. Standard systems for personnel and payroll operations, tested in fiscal year 1968, were to


be implemented at all class II installations beginning in fiscal year 1969.

The proposed third generation computer system configuration (a system which has been improved, expanded, or altered twice since its innovation) designed for use at the Walter Reed Army Institute of Research was reviewed by the Comptroller of the Army's Computer Systems Evaluation Command, and specifications were released to the computer marketing firms. These plans provided for one central processor and four satellite computers. The approved modification of the Radio Corporation of America 301 equipment configuration at the U.S. Army Medical Research and Nutrition Laboratory, Denver, Colo., will extend the present system into third generation concepts. International Business Machines Corporation 1440 programs for the Office for the Civilian Health and Medical Program for the Uniformed Services system were converted to International Business Machines Corporation 360 programs during the year. Two disk drivers were added to the International Business Machines Corporation 360 computer at the Armed Forces Institute of Pathology, providing greater processing capability.

During the year, plans were completed and approval was received from the Vice Chief of Staff, Management Information Systems, for developing a system for computer application in military psychiatry. Phase I was to relate to the psychiatric treatment centers at the major class II hospitals, and phase II was to extend the automated system to one or more mental hygiene clinics. Approval was also received to develop an automated outpatient system to assist direct patient care activities. The detailed data automation requirements and equipment specifications were under development in June 1968.

By stimulating interest in modern administrative and managerial practices, eliciting widespread employee participation by imaginative programs such as the "find-it, fix-it" policy, supporting the drive for the mechani-


zation and automation of managerial procedures, and supporting hospital commanders in the introduction and implementation of comprehensive management improvement programs, General Heaton kindled motivation and aroused interest in more efficient and effective management throughout the Army Medical Department. Under his direction, the Medical Department kept pace with the "management revolution" in the Department of the Army.