C. tive expenses of third parties who assist in carrying out the provisions of the Social Security Act. Health insurance carriers and intermediaries such as Blue Cross and Blue Shield organizations and private insurance companies who pay most Medicare bills and are responsible for certain other administrative functions will require $.2 of every administrative dollar estimated for fiscal year 1972. Since the inception of Medicare, intermediary and carrier workloads have increased at a faster rate than those of the SSA bureaus. For this reason the Medicare intermediaries and carriers have consumed a growing proportion of the total social security administrative dollar-21.5 percent in fiscal year 1968 as compared to 27 percent estimated for fiscal year 1972. The increased workloads stem from the growth in mmber of aged individuals receiving services under the Medicare program and from efforts to introduce qualitative improvements and greater cost controls in this, the newest area to which social security has been extended. The Social Security Administration contracts with State agencies which make medical determinations on initial disability claims as well as on continuing eligibility for disability benefits. These agencies will require $.06 of every administrative dollar budgeted for fiscal year 1972. In the administration of the health insurance program, the Social Security Administration also contracts with State agencies (usually public health agencies) which certify that providers of services, that is, hospitals, extended care facilities, home health agencies and independent laboratories, meet health and safety requirements and thus are eligible to participate in the program. These agencies will require $.01 of every administrative dollar budgeted for fiscal year 1972. Manpower budgeted for SSA proper is less than 18 despite a 20.9 percent increase in work output over the four-year period. The 1972 budget request is based on the premise that SSA will fully absorb the workload increase budgeted for 1972 over 1971 and in addition decrease its manpower requirements by 1,025 man-years. During 1970, the Social Security Adrinistration saved 3,799 man-years and $36.9 million because of higher productivity than experienced in 1969. This represented an increase of 7.1 percent over that year and was brought about primarily through systers improvements involving the extension of the use of computers and telecommunications. Procedural changes resulting from a comprehensive manpower utilization study made late in 1969 also contributed to these manpower savings. In 1971, a further improvement of 2.5 percent, which is equivalent to a saving of 1,399 man-years and $14.2 million over fiscal year 1970, is projected. Most of these savings will be accomplished by specific cost reduction projects. As in previous years, the bulk of these projects involve extension of the use of computers and finding better ways of getting the job done. A productivity increase of 5.6 percent in 1972 over 1971 is budgeted and reflects savings of 3.050 ran-years and $34.9 million. These savings will be achieved through continued efforts to automate the claims and benefit payment processes, other extensions of the use of computers and other machinery and completion of the changes initiated in the preceding year. Exhibit 2, which follows this narrative, shows the trend in productivity in the Social Security Administration since fiscal year 1960. The work output index used in computing the productivity index is composed of 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 intermediaries and the manpower for them are excluded. D. 1972 budgeted man-years reflect a continued effort to reduce the use of overtime. An increase of 655 permanent positions is requested in 1972 to permit a reduction in the use of overtime. As shown in Exhibit 3 following this narrative overtime usage has decreased from 7.6 percent of total manyears used in fiscal year 1968 to an estimated 1.7 percent in fiscal year 1972. At the same time the number of permanent positions filled at end-of-year 1972 is less than 300 over the actual end-of-year for fiscal year 1968 which was prior to the enactment of the Revenue and Expenditure Control Act. A summary of SSA's employment and overtime requirements funded from the Salaries and Expenses appropriation follows: For individuals whose salaries are equal to or less than the base rate of a GS-10, an hour of overtime costs one and one-half times as much as an hour of regular time. Extensive periods of overtime reduce employee productivity during normal working hours and when prolonged may endanger the employee's health. Therefore, the Social Security Administration believes that by increasing permanent positions and reducing overtime it can accomplish its objectives more efficiently and more economically. |