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Annual Report of the Surgeon General United States Army Fiscal Year 1958


Change in Management Structure

The Army Medical Service has revised its program system to conform with the new Department of the Army management structure which establishes a uniform classification of Army activities for purposes of programming, budgeting, accounting, analyzing performance, and allocating and controlling manpower. The AMEDS program system, the principal managerial system for the accomplishment of Army Medical Service missions, now uses the standard terminology, definitions, and work units throughout the Army. It not only provides command direction and control of AMEDS operations at the levels of the Office of the Surgeon General and class II installations and activities, but also furnishes staff direction and guidance to AMEDS activities worldwide. The programming system provides a basis for appraising the progress being made toward accomplishing missions in terms of scheduled objectives as well as in terms of dollar and manpower utilization.

Basic Change in Personnel Staffing

A composite inpatient and outpatient work unit, known as the medical care work unit, has been developed and adopted for the purpose of evaluating personnel utilization and operating costs in CONUS Army hospitals. This composite unit not only permits a more accurate analysis of trends within a hospital or dispensary but also makes it possible to compare the staffing and operating costs of the various-sized hospitals by taking into account such factors as numbers of admissions and occupied beds as well as length of patient stay.

The first step in the development of the medical care work unit was the establishment of a composite inpatient work unit. It had become increasingly evident in recent years that a more flexible measuring unit should be devised that would incorporate into the inpatient work unit some factor for patient turnover in order to obtain a better index of inpatient workloads. An informal ad hoc committee was appointed, with representatives of the Army, Navy, and Air Force Surgeons General working together on field studies to determine the factors that would best measure inpatient workload in a simple formula. Further, the committee was to determine the proper weights to apply to the factors. The committee split into various teams and visited 34 hospitals.


The committee studies, which related the personnel utilization in hospitals to continuing care (beds occupied) and turnover of patients (admissions) resulted in a recommended weight factor of 1 for beds occupied and 10 for admissions. The outcome was the establishment of the composite inpatient work unit, consisting of the sum of daily average beds occupied plus 10 times the daily average admissions.

Late in the fiscal year, the composite inpatient work unit was expanded into the composite inpatient and outpatient work unit. This medical care work unit consists of the daily average number of beds occupied; plus 10 times the daily average admissions; plus 10 times the daily average live births; plus 0.3 times the sum of daily visits of inpatients, quarters patients, and outpatients to dispensaries and specialty clinics; plus the daily average number of physical examinations. This composite unit precludes the necessity of prorating personnel at the installation level between inpatient and outpatient care, always a difficult procedure requiring subjective evaluation. These new composite work units were introduced officially as elements of appendix VI, AR 1-11, 17 January 1958, as modified.

Hospital Command Management System

The HCMS (Hospital Command Management System), installed first at Valley Forge Army Hospital on 1 January 1957, was extended on 1 July 1957 to the Brooke and Walter Reed Army Medical Centers and to four more Army Hospitals-Fitzsimons, Letterman, Madigan, and William Beaumont. Since some objections were made that the system as prescribed in OTSG Administrative Letter 1-12, dated 1 April 1957, was too comprehensive, instructions were issued by telegraph to modify the manual. The major changes were:

1.  The degree of responsibility to be assigned to, and the extent of the participation in, the programing and budgeting processes by program coordinators, the Program Budget Advisory Committee, program directors, and activity directors were to be based on a decision of the installation or activity commander.

2.  The HCMS management structure was to be diminished by eliminating those functional identities which were not considered to represent requirements of this office.

3.  Some of the mandatory requirements for completion of the data complex were to be eliminated.

4.  The requirement for accumulation of productive time of personnel was to be abolished.


As had been anticipated, local commanders experienced considerable difficulty, during the first year of operation, in the precise implementation of the accounting and data accrual procedures of the system. These difficulties were generally due to personnel training problems which, by the end of the fiscal year, had been largely overcome. During the year, a project for comprehensive machine application to financial transactions, using the Walter Reed Army Medical Center as the development site, was carried out. This machine application was considered feasible and is being implemented in the development site, effective 1 July 1958.

At the request of the Comptroller of the Army, an Army audit team evaluated the HCMS on an informal basis. The Army Audit Agency later indicated that it considers the HCMS to be a comprehensive and clear-cut command management system. The GAO (General Accounting Office) studied HCMS in detail and is using it as a framework in conducting comprehensive managerial audits at Fitzsimons, Madigan, and Letterman Army Hospitals. Unofficially, GAO has evaluated HCMS as an excellent managerial system in application and operation, particularly at Madigan Army Hospital.

The HCMS has served as a prelude to many staff actions taken in the OTSG and at higher levels, aimed at modifying the processes of programing, budgeting, manpower control, accounting, operations analysis, and reporting. Most of these staff actions have been in the form of changes in directives of various types and have provided self-contained provisions for integrating these various processes. Accordingly, in the future the HCMS will be considered a normal managerial technique as applied to hospitals and no longer will be substantially dissimilar to management systems used elsewhere in the Army.

Study on Further Integration of Armed Forces Medical Services

The Secretary of Defense noted in a memorandum to the Secretaries of the Army, Navy, and Air Force on 7 October 1957 that steady progress had been made in coordinating procurement and in cross-servicing through the single-service procurement assignments, the Interservice Supply Support Committee, and the single managers. He requested that each of the services make a critical appraisal of the actions taken and recommend further steps that might be taken to improve the integration of the supply and logistic systems.

As a result of this memorandum, the Deputy Chief of Staff for Logistics directed The Surgeon General to evaluate-


1.  The desirability of establishing within the Department of Defense a separate civilian or civilian-military managed agency (commonly described as the 'fourth service') which would be responsible all Armed Forces medical service support activities in CONUS and overseas.

2.  The desirability of allocating to one of the three services the responsibility for all Armed Forces medical service support activities (the single-manager plan).

3.  The continuation and possible extension of the present system of cross-servicing in which one military service provides medical service support to the other services on a mutually agreed basis for the purpose of eliminating duplication and overlapping.

In a study forwarded to the Deputy Chief of Staff for Logistics on 24 January 1958, The Surgeon General expressed opposition to both the fourth-service and the single-manager concepts. He recommended that the present organization of the Army Medical Service be continued under the direction of the Assistant Secretary of Defense (Health and Medical) and that the system of cross-servicing and joint

utilization of facilities be extended wherever feasible.