History

Administration and Management

The truth is, that medicine, professedlyfounded on observation, is as sensitive to outside influences, political,religious, philosophical, imaginative, as is the barometer to the changes ofatmospheric density.-OLIVER WENDELLHOLMES.

General Heaton endeavored to effect theintegration of all the skills and facilities available to him to achieve hisgoal of the practice of total medicine.

In addition to those activities directly concerned withpreventive medicine, patient care, military medical research and development,and combat readiness, General Heaton directed his attention to the moreefficient management of the Army Medical Department. One of the cardinalprinciples of his fivefold concept of operations, it will be recalled, was toimprove military medical administration.

MANAGEMENT IMPROVEMENT PROGRAMS

Hospital Command Management System

The development of sound management practices wasa major objective of the Department of the Army for more than a decade. Towardthis end, the Army Command Management System was designed and implementedbeginning in 1956. The Command Management System was introduced in an effort toprovide a single integrated method for Army programming, budgeting, costaccounting and reporting, and a general streamlining of Army management methods.The goal was the

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development of a system to bring together what had beenessentially two basic management processes-the program management system andthe financial management system.

The objective of the Army Command ManagementSystem was to produce the kinds of data necessary for commanders at all levelsto control missions and resources and to enable them to adjust resources to bothlong-range and immediate changes in missions and mission priorities. Basically,it involved establishing a direct command responsibility in each installationand agency for the management of peacetime nontactical activities. It was aimednot only at improving the system of fiscal responsibility but also at creatingan atmosphere in which management could be exercised more fully.

Since mid-1959, the Army Command ManagementSystem, of which the Hospital Command Management System was an integral part,has been functioning at all of the installations and activities under thecommand of The Surgeon General that operate under the appropriation entitled"Operations and Maintenance, Army." Experience in the program-budgetcycles since that date has confirmed the soundness of the basic concepts of thesystem. Because of the alinement of the program and budget cycles, theutilization of programs as the basis for the development of the budget wasgreatly facilitated. Perhaps more important, it made it possible to evaluatereadily the adequacy of financial resources for the accomplishment of assignedmissions, objectives, tasks, and workloads. The extension of the HospitalCommand Management System to appropriate installations and activities under thecommand of The Surgeon General strengthened the administrative control overtheir activities and provided a mechanism by which programs and program decisioncould be reflected in Medical Department budget justifications.

As a guideline to measure progress, the ArmyCommand Management System provided that success in the accomplishment of fiscalyear program objectives

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

"Find-it, Fix-it"-A NewApproach to Internal Review

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

The informal internal review reportingprocedures and the "find-it, fix-it" concept initiated by GeneralHeaton resulted in overall improvement of the working relationship betweenoperating and internal review personnel.

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This improvement, in conjunction with theapplication of the principle of "management by exception" whichfocused attention on weak and troublesome areas, resulted in improved financialmanagement 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 tooperate U.S. Army hospitals of varying sizes and workloads. The qualitativestaffing information contained in the guide was designed primarily to aid instaffing hospitals at the installation level and in properly identifyingpositions in hospital tables of distribution. The guide did not constitute anauthorization for personnel. While intended chiefly as a means of guidance fordetermining proper personnel requirements for performance of hospital functions,the guide also had an important aim-the conservation of manpower resources. Inaccordance with the Department of the Army policy of exercising utmost economyin the use of manpower, every effort was made to operate within the allowancesand ranges of the guide, or to operate with fewer personnel.

Army Regulations No. 40-202, dated 29 October1958, revised the hospital staffing report, Assignment and Utilization of ArmyMedical Department Personnel, to reflect the incorporation of the compositemedical care work unit which was agreed upon late in fiscal year 1958. This newwork unit, which was considered a better index of hospital workload, combined inweighted fashion the numbers of beds occupied, admissions, births, dispensaryand clinic visits, and physical examinations. The combining of inpatient andoutpatient care work units eliminated the need for prorating medical carepersonnel at the hospital level between those charged to inpatient care andthose charged to outpatient care.

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This action, in conjunction with therealinement of the functional table in the report to conform with the managementstructure prescribed in Army Regulations No. 1-11, made the report not onlyeasier to prepare but also more meaningful for purposes of analyzing personnelutilization. It provided a better basis for comparing personnel utilizationbetween hospitals where inpatient workloads and outpatient workloads varied inproportion to one another. Personnel reporting was more accurate because of theelimination of the arbitrary proration between inpatient and outpatient care,and workloads were more realistically portrayed through the use of the compositework unit. While these were technical points, they were important in that theyimproved the validity of the report and enhanced the use of the data itcontained in making studies of personnel utilization within the hospital as wellas in evaluating personnel performance between hospitals, between majorcommands, and among the three medical services, and also in distributing medicalcare personnel among the functional elements of the hospital.

The Medical Department established a system inFebruary 1960 whereby its hospitals and dispensaries could report noteworthyimprovements developed in the management of their facilities to the Office ofThe Surgeon General. This office then consolidated and published lists ofinformation concerning these improvements and distributed them to each hospitaland dispensary. The objective of the management information exchange program wasto provide better patient care, which could be more readily achieved byconstantly striving to improve methods, procedures, and equipment throughout theentire hospital and dispensary system. The system provided for the publicationof information lists on a continuing basis, and it was intended that effortswould be made to include improvements accomplished in medical facilities ofother Federal agencies as well as some civilian hospitals.

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Administrative and ProfessionalManagement Improvement Program

Management in the Army Medical Department wascomprised of two principal parts. The first was professional management whichencompassed all efforts directly related to preventive medicine and actualmedical treatment. The second part was administrative management which includedall activities necessary to support professional management. These parts werenot independent, and neither would be effective without the other.

A plan for management improvement, coveringadministrative and professional management, was evolved during 1960 and approvedby The Surgeon General. This plan had a number of broad objectives. One was todevelop and standardize techniques, materiel, and services to lower theincidence of disease and injury throughout the Army. A second was to curtail oreliminate costly administrative and professional practices which did notcontribute directly to the maintenance of a high standard of patient care. Athird was to reorient and rehabilitate clinic services in the Army in accordancewith their expanded role in the diagnosis and treatment of patients. The fourthwas to assure that current and proposed systems allowed commanders of class IIinstallations and activities maximum flexibility of operational decisions inutilization of available resources. The fifth objective was to assure that thebasic policy pertaining to supervision by the Office of The Surgeon General ofMedical Department operations was one of minimum direction and of maximumassistance and guidance.

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

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tion of areas in need of improvement, thedevelopment of required improvements, and the application of such improvementsto operations.

MANAGEMENT INFORMATION SYSTEMS

Mechanized Financial Accounting

The Army Medical Department supported anextensive program for the modernization of financial accounting operationsthrough mechanization in the period from 1960 to 1964. This program wasinitiated in order to improve the quality and timeliness of the financial datasupplied to management personnel at all levels of command. The design of thesystem was also adaptable to future utilization of electronic computers whereverfeasible. The electrical accounting machine element of this improvement, whichutilized conventional carriage-type accounting machines for posting subsidiaryledgers, with the simultaneous preparation of punched-paper tapes, permitted thepreparation of most internal and external reports by punchcard methods,resulting in more accurate and timely data from field installations.

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

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

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

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

Automatic Data Processing Systems

The function of medical records is twofold: toprovide for the care of the individual and to yield statistical informationwhich will guide administrative policy leading to improved health conditions.Mechanical methods for handling large volumes of records were not new to theArmy Medical Department. The fact of the matter is that the Medical Departmentwas a pioneer in the use of mechanical equipment for tabulating records. Thebasic ideas of modern recordkeeping and the potential of high-speed datamanipulation and computation were understood well before World War II. Only thespeed limitation of the tabulating equipment available prevented their fullrealization.

This early experience provided the stimulusthat led to the recognition of the potential benefits to be derived from theapplication of electronic data processing to the business-type operations of theMedical Department. The Surgeon General therefore appointed an Automatic DataProcessing Systems Group to assume responsibility for

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

The Automatic Data Processing Systems Groupbegan formulation of a long-range program aimed at the creation of a systememploying individual equipment installations in a coordinated manner with a viewto ultimate full integration. In the initial phases of the program, theacquisition of equipment was subordinated to the establishment of desired goalson a Department-wide basis and the development of related systems andprocedures. The major functional areas in which program development wasconcentrated were personnel, medical statistics, supply accounting, and financeand accounting. Investigation of the potential value of electronic dataprocessing systems at class II installations was a matter of primaryconsideration.

The overall objectives established for theprogram were to provide: (1) economies in dollars, manhours, and processingtime; (2) current and reliable data to be used by management in makingdecisions; (3) data that was necessary but not otherwise available; and (4) apotential for expansion to meet operational and mobilization needs without aproportional increase in personnel and financial outlay. The effort in theperiod from 1960 to 1965 was directed largely toward a relatively short-rangegoal of substituting electronic computers for electrical data processingequipment at the Office of The Surgeon General and at class II hospitals andmedical centers.

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

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geon General's Plan for ManagementImprovement for the first time in fiscal year 1962. Subsequently, the programgained momentum with each passing year. The Automatic Data Processing SystemsGroup entered into the final stages of the development of a total integratedautomatic data processing system for the Office of The Surgeon General duringfiscal year 1965. Data automation requirements covering all systems werescheduled for completion by the end of the first quarter of fiscal year 1966.Detailed systems specifications that were to serve as a basis for obtainingequipment proposals from computer manufacturers were scheduled for completion bythe end of the second quarter of fiscal year 1966. This system under developmentwas to provide more complete data processing support to various activitieswithin 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 extensiveuse of computer-type equipment, these and other activities would be able tofunction with greater efficiency, speed, accuracy, and flexibility.

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

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stalled at William Beaumont General Hospitalin May 1965. In April 1965, Valley Forge General Hospital assumed the additionalmission for providing data processing support to the U.S. Army Medical MaterielAgency, which had been moved to Phoenixville, Pa., from Brooklyn, N.Y. MedicalDepartment observers continued to participate in the Veterans' Administration'sAutomated Hospital Information System (formerly Hospital Automation Project)Program. This multipurpose automated data system was designed to incorporate allpatient data necessary to the operation of the Veterans' Administrationhospitals.

By fiscal year 1965, the installation ofautomated data systems at the Office of The Surgeon General and at the class IIhospitals and medical centers for use in the business-application areas ofsupply, personnel, patient and financial accounting, and payroll was drawing toa successful conclusion. Overlapping this achievement was the increased use ofelectronic data processing equipment in Medical Department research andeducational activities. The Radio Corporation of America 301 computer system forthe U.S. Army Medical Research and Nutrition Laboratory underwent a successfulperformance evaluation by a Department of the Army team in October 1965.Approval was obtained to install an Analog to Digital Conversion System toincrease the capability for use of the Radio Corporation of America 301 computerin support of the entire laboratory research effort. In June 1965, announcementwas made by the Department of the Army of the selection of a computer forprocessing medical-record data at the Armed Forces Institute of Pathology. AData Automation Requirement for expansion of existing computer facilities at theWalter Reed Army Institute of Research to accommodate a proposed biomedicalresearch and evaluation data processing system was submitted to the Departmentof the Army. The system would provide for the establishment of a "Facilityof Mathematics and Computer Sciences" at the Institute, using modern meth-

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ods of data acquisition and handling for theorderly and timely pursuit of assigned missions in medical research andeducation.

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

During fiscal year 1968, an InternationalBusiness Machines Corporation 1440 disk-type computer was installed at LettermanGeneral Hospital in August, completing the standardization of electronic dataprocessing equipment at the seven class II hospitals and medical centers. Inaddition, standard computer-type systems for financial and accounting and supplycontrol went into operation at all the class II hospitals and medical centers.Standard inpatient accounting systems were initiated at three installations andwere scheduled for implementation at the remaining class II hospitals in fiscalyear 1969. Standard systems for personnel and payroll operations, tested infiscal year 1968, were to

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be implemented at all class II installationsbeginning in fiscal year 1969.

The proposed third generation computer systemconfiguration (a system which has been improved, expanded, or altered twicesince its innovation) designed for use at the Walter Reed Army Institute ofResearch was reviewed by the Comptroller of the Army's Computer SystemsEvaluation Command, and specifications were released to the computer marketingfirms. These plans provided for one central processor and four satellitecomputers. The approved modification of the Radio Corporation of America 301equipment configuration at the U.S. Army Medical Research and NutritionLaboratory, Denver, Colo., will extend the present system into third generationconcepts. International Business Machines Corporation 1440 programs for theOffice for the Civilian Health and Medical Program for the Uniformed Servicessystem were converted to International Business Machines Corporation 360programs during the year. Two disk drivers were added to the InternationalBusiness Machines Corporation 360 computer at the Armed Forces Institute ofPathology, providing greater processing capability.

During the year, plans were completed andapproval was received from the Vice Chief of Staff, Management InformationSystems, for developing a system for computer application in militarypsychiatry. Phase I was to relate to the psychiatric treatment centers at themajor class II hospitals, and phase II was to extend the automated system to oneor more mental hygiene clinics. Approval was also received to develop anautomated outpatient system to assist direct patient care activities. Thedetailed data automation requirements and equipment specifications were underdevelopment in June 1968.

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

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zation and automation of managerialprocedures, and supporting hospital commanders in the introduction andimplementation of comprehensive management improvement programs, General Heatonkindled motivation and aroused interest in more efficient and effectivemanagement throughout the Army Medical Department. Under his direction, theMedical Department kept pace with the "management revolution" in theDepartment of the Army.