History of SSA During the Johnson Administration 1963-1968

ORGANIZATIONAL CHANGES

REORGANIZATION OF 1965

Background

The Social Security Amendments of 1965 (principally, the new programs of health insurance for the aged) added to the responsibilities of the Social Security Administration another quite distinct area of knowledgeand skill, and on such a large scale that a new pattern of organizationwas seen as necessary to absorb and administer the new programs. The Hospital Insurance Program and the Supplementary Medical-Insurance Program did far more than greatly increase the workloads of the Administration.

Recognizing that much of the knowledge and skill necessary to administer certain portions of the health insurance programs was to be found in the private sector, the new legislation provided that the Social Security Administration would contract with private insurance carriers and other health organizations to administer the bulk of the health insurance claims-handling activities. This called for very extensive contact and negotiation on the part of officials stationed in the field. In addition, the Social Security Administration was to contract with the States for
determining the eligibility of providers to participate in the hospital insurance program.

In view of these new responsibilities, the Administration anticipated a number of problems. In the field, relationships with the States and with private organizations would multiply far beyond the capabilities and resources of the basically unifunctional Division of Field Operations. The Division's Regional Representatives would be unable to cope with both the line supervision of field installations and the technical issues, negotiation, and liaison resulting from the new programs. The district offices would suffer from a lack of technical support which would be necessary to carry out their responsibilities in dealing with the public. New work processes would be developed to accommodate the new programs, and these processes would not fit satisfactorily into the pattern of the old organization. In the headquarters, the disability program and the new health insurance programs would require an ever-increasing degree of specialization in the policy-making and technical issues areas.

In addition, electronic data processing and transmission techniques and applications had developed considerably, and had become such an integral part of workload processing that it was no longer realistic or feasible to view the handling of workloads in separate, compartmentalized stages. Rather, the handling of workloads was fast becoming a single, highly integrated process that transcended organization boundaries and defied the lines shown on organization charts.

Specific Changes

All of these developments led to the reorganization of the Social Security Administration in 1965. Announced on July 26, the reorganization was designed to attain the following major objectives:

1. Accommodate within the overall structure of the Social Security Administration, the important new units with special responsibility for the hospital and supplementary medical insurance programs.

2. Modify existing units to accommodate additional responsibilities because of these programs.

3. Provide for greater efficiency and economy and fuller utilization of scarce skills in the new technical area of electronic data processing and transmission by centering responsibility for this function in a single headquarters unit.

4. Strengthen the role of the management unit at the top level of the agency in order to better assure the most
effective, efficient, and economical administration of both old and new program responsibilities.

5. Increase the technical support for district offices, payment centers, and State agency operation by assigning
responsibility for functional supervision of technical work to specialised bureaus and their representatives.

6. Strengthen the administration of the social security program in the field by placing responsibility for coordination and leadership of all social security activities in a given geographical area under a Regional Assistant Commissioner reporting directly to the Office of the Commissioner.

7. The position of Assistant Commissioner, Field, Thomas C. Parrott, was established in the Office of the Commissioner to oversee the day-to-day activities of the Regional Assistant Commissioners.

The new components which emerged and their relationships with the old are described as follows:

Office of the Actuary-- Robert J. Myers
Formerly the Division of the Actuary. Responsibilities expanded to includework in the new programs of health
insurance.

Office of Information-- Roy L. Swift
Responsibilities expanded to includethe new health insurance programs.

Office of Research and Statistics-- Ida C. Merriam
Formerly the Division of Research and Statistics. Expanded to include health insurance studies and to exercise a greater degree of unified control over the research and statistical activities of the Administration.

Office of Program Evaluation and Planning-- Alvin M. David
Formerly the Division of Program Evaluation and Planning. Responsibilities expanded to include work in the health insurance program area.

Office of Administration-- Jack S. Futterman
Formerly the Division of Management plus the former Central Planning Staff, the internal audit functions of the
former divisions of Disability Operations, Claims Control, Accounting Operations, and Field Operations. Expanded to include a new Management Coordination and Special Projects Staff and a new Special Staff for
Employee Management Relations and Equal Employment Opportunity. Given responsibility for assisting the Commissioner in giving leadership and unified directionto the administration of the social security program.

Bureau of Federal Credit Unions-- J. Deane Gannon
The Bureau's Regional Representatives in the field were brought under the general coordination and leadershipof the newly established Regional Assistant Commissioners. Retained its relatively independent status within the Social Security Administration due to its separate and distinct program.

Bureau of Hearings and Appeals-- Joseph E. McElvain
Responsibilities expanded to include hearings and appeals in the area of health insurance, and the placement of Regional Hearing Representatives under the general coordination and leadership of the Regional Assistant
Commissioners. Retained its relatively independent status within the Social Security Administration to assure in
dependent and impartial hearings.

Bureau of Data Processing and Accounts-- Joseph L. Fay
Formerly the Division of Accounting Operations and the Electronic Data Processing Systems Branch of the former Division of Claims Control. Given centralized responsibility for all electronic data processing and data transmission activities of the Administration.

Bureau of District Office Operations-- Hugh F. McKenna
Formerly the Division of Field Operations. Functions and responsibilities were refocused on the direct line management and supervision of district office operations,while technical or functional supervision of specialised program activities was given to the specialized program bureaus.

Bureau of Retirement and Survivors Insurance-- Richard E. Branham
Formerly the Division of Claims Policy (except the investigative function) and the Division of Claims Control (except the EDP Systems Branch and the Baltimore Payment Center). Given responsibility for the development of policy in the area of retirement and survivors insurance and the line supervision of payment centers. Also given responsibility for the functional or technical supervision of district office retirement and survivors claims development and adjudication, and for those aspects of policy development common to more than one program and not primarily in the area of disability or health insurance.

Bureau of Disability Insurance-- Bernard Popick
Formerly the Division of Disability Operations (except the Internal Audit Branch and certain research and statistical elements in the Management and Analysis Branch plus the Baltimore Payment Center. Given responsibility for the development of policy in the area of disability insurance, liaison with State agencies that participate in the administration of the disability insurance program, and line supervisionof the Baltimore Payment Center (processing payment of disability insurance claims.

Bureau of Health-Insurance-- Arthur E. Hess
A new component, given responsibility for the development of policy in the new area of health insurance. Also given responsibility for negotiating and administering contracts with State agencies and health insurance intermediary organizations, and for serving as an intermediary to providers of health services choosing to deal directly with the Social Security Administration.

Field Organization

As a part of this general reorganization, the field structure was also considerably altered. For each bureau with significant responsibilities in the field, a Regional Representative was assigned to each of its geographic regions and placed in charge of that bureau's activities in the region. In the technical issues of program administration, the pattern of supervision for all field employees was designed largely as a functional one, giving a lesser degree of recognition to strict organization boundaries. Thus, the Regional Representatives for retirement and survivors insurance, disability insurance, health insurance, hearings and appeals, and Federal credit unions were given functional aid technical supervision of their respective program activities regardless of whether carried out by personnel in district offices, regional offices, or payment centers.

Complementing this pattern of technical supervision, wherever the Social Security Administration had field installations the strict line supervision of these installations was the responsibility of a bureau Regional Representative. Thus, the payment centers came under the line supervision of the Regional Representatives for retirement and survivors insurance, and the vast network of public contact facilities--district and branch offices--came under the line supervision of the Regional Representatives for district office operations.

Despite the variety of programs and activities which had developed within the Administration, social security (excluding the Federal credit union program) remained essentially one complexly interrelated and highly integrated program. All of its programs were based in one statute, guided by one set of objectives, financed from essentially one source, linked by one system of account numbers and centralized accounting, dependent upon a single set of earnings records, and implemented by means of basically the same administrative processes. This meant that no matter how the field organization was to be structured, a considerableamount of coordination and on-the-spot leadership would be required in the field. To achieve the coordination and leadership necessary to social security program administration in the field, the country was divided into eight Social Security Administration regions, each headed by a Regional Assistant Commissioner (title changed to "Regional Commissioner" in May of 1968). The Regional Commissioner was stationed in a region but located organizationally in the Office of the Commissioner,
reporting directly to the Commissioner or his chief assistant for overall field administration, the Assistant Commissioner, Field. He was assigned the primary responsibility of taking or recommending such action as would
be necessary to keep the Social. Security Administration's field activities moving toward predetermined objectives, and moving in a closely integrated and well coordinated fashion.

The factors of population, geographic area, workload distribution, and location of field installations were the bases for setting the Social Security Administration regional boundaries. Boston, New York, Charlottesville, Atlanta, Chicago, Dallas, Kansas City, and San Francisco were chosen as the Social Security Administration regional offices. These same factors went into determining the boundaries of bureau (i.e., Bureau of District Office Operations, Bureau of Disability Insurance, Bureau of Health Insurance, Bureau of Retirement and Survivors Insurance, Bureau of Hearings and Appeals, and Bureau of Federal Credit Unions) regions, but with different results. Since the bureaus' responsibilities in the field varied considerably, their regional boundaries were not, in all cases, conterminous with the Social Security Administration regional boundaries. As a result, offices for certain bureau regions were located in Philadelphia, Harrisburg, Birmingham, Cleveland, and Denver, as well as the aforementioned cities.

At the headquarters level, the position of Assistant Commissioner, Field was established in the Office of the Commissioner to give high level attention to the overall problems of field administration, to give day-to-day leadership to the Regional Commissioners, and to keep the Commissioner apprised of field activities.

Summary

In retrospect, the reorganization of 1965 provided a framework for the high degree of specialization required by new and more complete social security programs, by technological advancements in the area of data processing and transmission, and by new concepts in governmental administration. Scarce skills and knowledge were conserved andconcentrated where they could most effectively, efficiently, and economically serve the Administration. The centrifugal tendencies of specialization and of growth in workloads and organization size were countered by providing a strengthened staff arm for the Commissioner--the Office of Administration--and by providing for direct and personal leadership in the field through the Assistant Commissioner, Field and the Regional Commissioners.

Some further organization modifications have been made since 1965, but have all taken place within the structure of bureaus and offices established in 1965. These changes have been essentially a final phase to the 1965 reorganization, bringing to the lower levels of the Adminis tration the same theme and objectives that guided the reorganization of the top level. {1}

Footnotes (Footnote numbers not same as in the printed version)

{1} Major sources for this section: Commissioner's Bulletins, No. 30, July 26, 1965, No. 31, August 19; 1965; and Vista, Vol. IX, No. 1, January 6, 1966.