The work output of the Social Security Administration proper increases by 3.6 percent for an increase of approximately 3,200 man-years. Of this, approximately 600 man-years is required to process a small net increase in the number of units of work over FY 1976. The principal areas of increase in work units are in the disability and health insurance activities. Approximately 1,900 man-years will be required to make quality improvements in the claims taking processes in district offices and approximately 700 man-years are needed to further improve the quality of redeterminations of SSI recipients.

The 10.6 percent increase in the work output of the health insurance contractors is primarily due to increases in the number of bills for hospital services and in claims for medical insurance services. These increases are due to the normal growth in the aged population and the higher utilization of health services.

The work of the State agencies that make disability determinations for the disability insurance and the Supplemental Security Income program is projected to increase by a net of 3.3 percent. The principal reason for the increase is that the disability State agencies are assuming added responsibilities. Beginning in fiscal 1976 (annualized in 1977) the State agencies will conduct due process hearings with a beneficiary whose social security disability benefits are about to be terminated. An even more important new responsibility is the reconsideration interview procedure. Under this process, to be implemented in 1977, trained examiners in the State agencies will discuss face-toface with claimants the vocational and medical evidence aspects of their disability insurance and SSI disability claims. One purpose of these new procedures is to reduce Bureau of Hearings and Appeals workloads by making better decisions at an early stage in the appellate process and to explain the decisions to the claimant.

Productivity in the SSA Bureaus

After a long trend of increasing productivity the bureaus and offices of the Social Security Administration lost ground in fiscal year 1974 (-2.4 percent). This came about as a result of the necessary preoccupation with putting into motion the new SSI program with a resultant setback in planned improvements to systems capabilities in the social security program; the hiring and training of large numbers of new unexperienced employees; and a growing workload backlog situation, which produced many public inquiries and caused disruption of normally efficient processes. However, SSA recaptured this lost productivity in FY 1975 when its productivity increased by almost four percent. Further productivity

increases are projected in fiscal years 1976 and 1977 as shown in the following table which displays the yearly changes in productivity and the man-year values.

In both fiscal years 1976 and 1977, the major factor contributing to better productivity is a series of improvements in SSA systems and procedures. Among these improvements are: (1) increased automation in the social security account number system; (2) improvements in the automated SSI claims and payments systems; (3) an increase in the receipt of Medicare bills on tape rather than on hard copy; and (4) improvements in telecommunications and (5) increased efficiency by a more experienced staff. Of course, as in any budget projection, there are always a number of uncertainties surrounding the estimates. For example, to the extent that planned changes in systems and procedures are delayed the productivity budgeted cannot be achieved. Therefore, SSA's predictions of productivity often vary from the estimates.

Historical Trend in Productivity of SSA Bureaus

Exhibit 2 displays SSA productivity improvement for the ten-year period-FY 1968 through FY 1977. Using FY 1967 as the base the work of the agency's bureaus is projected to increase 150 percent while manpower increases only 79 percent, resulting in a productivity improvement of 39.5 percent.

The work output index used in computing the productivity index in this exhibit is based on units of program workloads processed adjusted for changes in the quality of the output, and non-recurring work involving the use of SSA manpower. The manpower index covers total manpower paid directly from the Salaries and Expenses appropriation including overtime. Work performed by State agencies and contractors is excluded from this computation.

Over the past two decades the SSA has shifted a significant portion of its work from manual to computer processes and productivity increases have been achieved principally by these shifts and by making improvements to the computer systems and procedures now in place. In the past few years productivity improvement has slowed in part because of the inability to extract further improvements out of the present generation of ADP equipment and to obtain significant procedural improvements from the existing systems without a basic redesign. Now the agency is committed to taking a new and total look at all of its major workload flows and to plan how to handle on a long-range basis its growing workloads. Special emphasis will be given to advanced systems design and improved computer technology. An Advanced Operation Systems Staff has been established and has started work in this area. The staff reports directly to the Commissioner to ensure that it has continuing priority attention. As the workloads of the Social Security Administration grow, advanced systems design and implementation are necessary to ensure prompt and accurate processing of them without commensurate increases in staff.

'Work performed by State agencies and Medicare contractors and the manpower for them are excluded.

1Productivity index equals work output index divided by manpower index times 100.

Productivity of State Agencies and Medicare Contractors

Presently the most significant productivity advances are occuring in the Medicare contractors where improved operating procedures and automated electronic data systems are being applied to the handling and processing of well over one hundred million bills and claims on an annual basis. Productivity for the Medicare contractors is projected to improve in 1976 by 5.5 percent and in 1977 by 11.8. Actual productivity for the Medicare contractors achieved in

1975 was 13.8 percent.

On the other hand the State agencies who are under contract to make disability determinations for the disability insurance and the supplemental security income programs are experiencing relatively level or decreasing productivity. In 1977 productivity is projected to decline by 1.9 percent. One major factor contributing to this situation is the increasing number of disability claims that require special medical examinations thereby increasing the time examiners spend on these cases. Another reason for the decline is increased training time for disability insurance State examiners.

Manpower and Positions

The major thrust in the budget to improve the accuracy of SSI and social security payments and to improve the quality of SSA service to the public cannot succeed unless SSA has a stable workforce not impacted by high turnover and excessive overtime on a continuing basis.

Last year the budget proposed the employment of 6,000 two-year term employees beginning in the second half of FY 1975. Since these employees could not become permanent additions to the Federal workforce, turnover among the term employees was considerably higher than for the regular permanent staff of the agency. As a result, the experiment with term employment is being dropped, and steps are underway to fill vacant term positions with permanent employees and to convert term employees on the rolls to permanent status wherever these employees can be reached on permanent civil service registers through standard competitive procedures for Federal employment. The budget request for FY 19761977 thus provides for the 6,000 term positions to become full-time permanent.

The budget also provides for a gradual decrease in overtime over the twoyear period 1976-1977, as illustrated in the table below:

In addition to the conversion of terms to permanent employment and the reduction of overtime, the 1977 budget provides for an increase of 1,950 permanent authorized positions over the 1976 level for all programs administered by SSA. However, the budget projects that the level of SSA permanent staff onduty (all programs) will be virtually unchanged from the end of fiscal year 1976 to the end of fiscal year 1977 (78,359 permanent employees at the end of FY 1976, and 70,309 at the end of FY 1977). One purpose of the 1,950 increase in authorized staffing is to enable SSA to obtain more permanent man-years from its employment ceiling. Another purpose is to enable SSA to prepare in advance to meet workload peaks during the year. The agency would be allowed to staff up as high as 81,243 permanent positions (2,934 positions higher than the end-ofyear ceiling) by the end of the transition period (September 30, 1976) and come