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SENATE COMMITTEE ON GOVERNMENT OPERATIONS,

June 6, 1966. Staff Memorandum No. 89–2–25. Subject: Reorganization Plan No. 3 of 1966, Proriding for Reorganization of

Health Functions of the Department of Health, Education, and Welfare. Reorganization Plan No. 3 of 1966 was submitted by the President to the Congress on April 2:, 1966. Unless disapproved by a majority vote of either House of the Congress, it will become effective on June 24, 1966. Plan No. 3 was referred to the Subcommittee on Executive Reorganization on May 9. 1966. tive staff resources. At a time when these functions could be neatly compartmentalized, the structure was adequate. But today the situation is different.

PURPOSE OF THE PLAN

The stated purpose of Plan No. 3 of 1966 is (1) to modernize and strengthen the structure and organization under which the Department of Health, Education. and Welfare administers Federal health and health-related programs and ac tivities, (2) eliminate diffusion of responsibility, and (3) increase efficiency, by giving the Secretary of Health, Eduation, and Welfare the flexibility required to reorganize the Public Health Service and coordinate health programs and functions throughout the Department.

The plan seeks to accomplish this objective ly (1) trausferring to the Secre tary of Health, Education, and Welfare all of the functions of the Public Health Service, its Surgeon General, and all of its other officers, employees and agencies. except for certain statutory advisory bodies: (2) authorizing the Secretary of Health, Education, and Welfare to assign the performance of such functions to officers, employees or agencies of the Public Health Service or the Department of Health, Education, and Welfare; and (3) abolishing the four principal statutory components of the Public Health Services and the Offices of the heads of these agencies :—the Bureau of Vedical Services, the Bureau of State Services the Office of the Surgeon General, together with the position of Deputy Surgeon General, and the National Institutes of Health, with the exception of its research institutes. (Plan No. 3 does not abolish either the Public Health Service or the statutory position of its head, the Surgeon General of the Public Health Service.)

According to the President's Message transmitting the plan, the program and activities referred to involve an estimated $7.8 billion for fiscal year 1967, of which $2.4 billion is administered by the Public Health Service and $3,4 billion. will be expended by other components of the Department of Health, Education, and Welfare for health and health-related programs and activities.

THE PRESIDENTS MESSAGE

In the President's Message on Health and Education, transmitted to the (' gress on March 1, 1966, he stated :

“Over the last 12 years, the budget of the Public Health Service for research. training, and services has grown alınost ten-fold-from $250,000,000 to $2+ billion. Yet major elements of the basic structure of the Public Health Service remain set by a law more than 20 years old.

*The Secretary of Health, Education, and Welfare and the Surgeon General of the United States have consulted leading experts physicians, administrators scientists, and public health specialists in a thorough search for the best meaus to improve the administration of public health programs. They all agree that the need to modernize the administration of the l’ublic Health Service is urgent."

In his Message transmitting Plan No. 3 to the Congress, the President stated that:

“Today the organization of the Public Health Service is clearly obsolete. The requirement that new and expanding programs be administered through an organizational structure established by law more than two decades ago stands as il major obstacle to the fulfillment of our Nation's health goals."

The President then noted that as presently constituted, the Public Health Service is composed of four major components: National Institutes of Health, Bureau of State Services, Bureau of Medical Services and Office of the Surgeon General, and under present law, Public Health Service functions must be assigned only to these four components.

('ontinuing, the President stated that:

“This structure was designed to provide separate administrative arrangements for health research, programs of State and local aid, health services, and execu

"Under recent legislation many new programs provide for an integrated attack on specitic disease problems or health hazards in the environment by combining health services, State and local aid, and research. Each new program of this type necessarily is assigned to one of the three operating components of the Public Health Service. Yet none of these components is intended to administer programs involving such a variety of approaches.

"Our health problems are difficult enough without having them complicated by outmoded organizational arrangements.”

After pointing out that merely integrating the four agencies within the Public Health Service would not go far enough, President Johnson stated that the Department of Health, Education, and Welfare performs major health or healthrelated functions which are not carried out through the Public Health Service, although they are closely related to its functions. Among these are health insurance for the aged, administered through the Social Security Administration ; medical assistance for the needy, administered through the Welfare Adininistration; regulation of the manufacture, labeling, and distribution of drugs, carried out through the Food and Drug Administration; and grants-in-aid to States for vocational rehabilitation of the handicapped, administered by the Vocational Rehabilitation Administration.

Referring to the position of the Secretary of Health, Education, and Welfare, the President said:

"As head of the Department, the Secretary * * * is responsible for the administration and coordination of all the Department's health functions * * *.

"But today he lacks this essential authority over the Public Health Service. The functions of that agency are vested in the Surgeon General and not in the Secretary.

"This diffusion of responsibility is unsound and unwise.

“To secure the highest possible level of health services for the American people the Secretary of Health, Education, and Welfare must be given the authority to establish—and modify as necessary—the organizational structure for Public Health Service programs.

"He must also have the authority to coordinate health functions throughout the Department. The reorganization plan i propose will accomplish these purposes. It will provide the Secretary with the flexibility to create new and responsive organizational arrangement to keep pace with the changing and dynamic nature of our health programs."

PROVISIONS OF THE PLAN

Section 1(a) transfers to the Secretary of Health, Education, and Welfare all of the functions of the Public Health Service, the Surgeon General of the Public Health Service, and all of its other officers and employees and agencies, except as otherwise provided in section 1(b). (A list of these functions is contained in Appendix A).

Section 1(b) exempts from the provisions of this section the functions vested by law in advisory councils, boards or committees of the Public Health Service which are established by law or are required by law to be established. (A list of these bodies is contained in Appendix B).

Section 2 authorizes the Secretary, from time to time, as he may deem appropriate, to delegate the performance of any of the functions transferred to him by the provisions of this plan to any officer, employee or agency of the Public Health Service or of the Department of Health, Education, and Welfare. (The proposed delegation orders of the Secretary, relative to the Public Health Service, are contained in Appendix C).

Section 3 (a) lists the agencies of the Public Health Service which are abolished, as follows:

Section 3 (a) (1) the Bureau of Medical Services, including the Office of the Chief of the Bureau of Medical Services.

Section 3 (a) (2) the Bureau of States Services, including the Office of the Chief of the Bureau of State Services.

Section 3(a) (3) the agency designated as the National Institutes of Health and the Office of the Director of the National Institutes of Health, but excluding all of the research institutes presently existing in the National Institutes of

Health.

Section 3 (a) (4) the agency designated as the Office of the Surgeon General and the position of Deputy Surgeon General.

Section 3 (b) directs the Secretary to make such provisions as he shall deem necessary to wind up any outstanding affairs of the agencies abolished by ser. tion 3. (A summary of the functions now performed by the agencies proposed to be abolished is set forth below).

Section 4 authorizes the Secretary, from time to time, to transfer within the Department of Health, Education, and Welfare, any of the records, property. personnel and unexpended balances of appropriations (available or to be made available), allocations, and other funds of the Department which relate to the functions affected by this reorganization plan, as he deems necessary in order to carry out the provisions of the plan.

PRESENT

AND

OF

THE

PUBLIC

HEALTH

SERVICE

ORGANIZATION

FUNCTIONS

General

The Public Health Service, a component of the Department of Health, Education, and Welfare, is the principal health agency of the Federal Government, charged specifically with the protection, improvement and advancement of the health of the American people. In carrying out its mission, the Service works closely with other agencies in the Department and of the Federal Government. State and local agencies, and various professional, voluntary, civic and special interest groups. In addition, it collaborates closely with international organizations in world health activities.

In general, the Public Health Service has a wide variety of specific statutory responsibilities. Thus, it administers comprehensive programs of health research and training, medical care for designated beneficiary groups, and public health practice. It is also responsible for certain direct services which can be (arried on only by a Federal agency, such as preventing the spread of disease from State to State, protection of the Nation from the importation of diseases from abroad, and working with other nations for a healthier world.

l’nder existing law, the organization and principal functions of the Public Health Service and the Surgeon General are contained in (1) the Public Health Services Act of 1941, as amended (42 U.S.C. 201 et seq.); (2) the Act of August .), 1954; as amended (42 U.S.C. 20001 et seq.), relative to the Indian health program; (3) other statutes which vest authority directly in the Surgeon General (a summary of the principal functions to be transferred is set forth in Appendix A); and (4) delegations to the Surgeon General of statutory authority vested in the Secretary of Health, Education, and Welfare, or elsewhere, which have been delegated to the Suregon General by the Secretary, and include such statutes as the Clean Air Act, as amended (Public Law 88–206), the Solid Waste Disposal Act (Title II, Public Law 89–272), the Federal Water Pollution Control Act, as amended (Public Law 660, 84th Congress), and Title XVII of the Social Security Act (Public Law 88-156, as amended by Public Law 89–97). With respect to these delegated functions, as of May 1966, eighteen have been transferred to the Surgeon General, and would not be affected by the Plan, since the basic authority is now vested in the Secretary. (A list of these functions is set forth in Appendix D).

The Public Health Service presently employs approximately 35,000 persons in more than 350 different occupations. Of the total number employed, some 5,000 are officers of the commissioned corps and the balance are career civil-service employees. Appropriations for the Service in fiscal year 1966 totaled $2,180,512.799 ; fiscal year 1967 budget estimates total $2,156,711,000.

Public Health Service personnel are stationed throughout the United States and the world. More than 90 percent of the staff are located outside the headquarters office in Washington, D.C. The largest concentration, about 11.000 is stationed at the National Institutes of Health, Bethesda, Maryland. Almost half of the Public Health Service staffs are located in hospitals and clinics throughtout the country. More than 900 people are stationed in the regional offices of the Service ; 600 are on duty with other Federal departments, primarily the Bureau of Prisons and the Coast Guard, including more than 100 stationed overseas with missions of the Agency for International Development.

The permanent field stations of the Service include 9 regional offices, 65.5 hospitals, 25 clinics, 31 major foreign quarantine stations, 12 Indian Health Centers, three large specialized centers, and several environmental laboratories for water, shellfish, and radiation research. In addition, there are many smaller

laboratories, training stations, environmental monitoring facilities, and field offices carrying out special projects and investigations.

The three large specialized field centers are: The Communicable Disease Center in Atlanta, Georgia ; the Robert A. Taft Sanitary Engineering Center in Cincinnati, Ohio; and the Arctic Health Research Center in Anchorage, Alaska. Present organization and structure

As presently constituted, the Public Health Service is composed of four major operating components, the National Library of Medicine, 9 regional offices and 78 public advisory groups, of which 17 are specifically established by statute. (A list of the 17 statutory bodies is contained in Appendix B. Charts showing the present structure of the Public Health Service and functional assignments are attached hereto as Appendices E and F, respectively). The Chief Officer of the Service is the Surgeon General, who is a member of the commissioned corps and is appointed by the President, subject to Senate confirmation, from among members of the corps, for a term of four years. The Deputy Surgeon General and the Assistant Surgeons General, including the Chief Dental Officer, Chief Nurse Officer and Chief Engineer Officer of the Service, are appointed by the Surgeon General from the corps. (Under the Secretary's proposed Delegation Order the Surgeon General's appointment authority would be redelegated to him by the Secretary. See Appendix C(1)).

The present statutory provisions governing the basic organization of the Public Health Service were originally contained in the Public Health Service Act of 1943 (Public Law 181, 78th Congress, 57 Stat. 587), which provided that the several functions of the Service be assigned to four component organization units :—the Office of the Surgeon General; the Bureau of Medical Services : (direct medical treatment program); The Bureau of State Services (programs of grants to the States for disease control and technical aid to the States); and the Vational Institutes of Hcalth (research). Prior to that time, the organization of the Service consisted of a number of divisions and other units, established either by law or administrative action.

The Public Health Service Act of 1944 (Public Law 410, 78th Congress, 58 Stat. 683), which consolidated various statutory provisions relating to the Service, retained the organization of the Service set forth in the 1943 Act. Thus, with the exception of a 1948 amendment changing the name of the National Institute of Health to the National Institutes of Health, several laws establishing or authorizing specific institutes within the National Institutes of Health, and a 1956 Act establishing the National Library of Medicine, no change has ever been made in either the number or the designation of the four component agencies of the Service. (See Appendices E and F).

Accordingly, at the present time, the Secretary of Health, Education, and Welfare and the Surgeon General are bound by the organizational language contained in section 202 of the 1944 Act, as amended, which reads as follows (42 U.S.C. 203): “The Service shall consist of (1) the Office of the Surgeon General, (2) the National Institutes of Health, (3) the Bureau of Medical Services, and (4) the Bureau of State Services. The Surgeon General is authorized and directed to assign to the Office of the Surgeon General, to the National Institutes of Health, to the Bureau of Medical Services, and to the Bureau of State Services, respectively, the several functions of the Service ***.”

Thus, in the absence of legislative action, all of the functions of the Public Health Service must be placed in one of the four units specified in the statute ; none of these may be abolished or renamed ; and no new units may be established. As a result, although there have been some 27 major amendments to the Public Health Service Act of 1944, involving approximately 50 new programs, the Surgeon General must continue to administer them through the original structure. (Major amendments of the Public Health Service Act of 1944 are listed in Appendix G).

Plan No. 3 would abolish these four statutory components, as well as the statutory requirement that the Surgeon General assign all of the functions of the Service to them; and would transfer to the Secretary of Health, Education, and Welfare all of the functions now vested by statute in the Surgeon General and the Public Health Service. According to the President's transmittal message, this action would supply the necessary legislative authority to enable the Secretary to reorganize the health and health-related activities within the Department of Health, Education, and Welfare in a manner which will enable it to meet present-day requirements. (The proposed new organization will be discussed at a subsequent place in this memorandum). Present functions and responsibilities of the Public Health Service and the

Surgeon General The principal functions and responsibilities of the Public Health Service and the Surgeon General may be divided into two groupings: (1) major areas of functions and responsibilities; and (2) principal means by which the Service carries out its responsibilities. The principal functions involve 6 major areas: (1) medical and hospital services; (2) community health; (3) environmental health; (4) research and training; (5) health information resources; and (6) international health. (A list of major functions is set forth in Appendix J). The principal means by which these functions and responsibilities are carried out involve 5 categories: (1) direct operations; (2) financial assistance; (3) setting standards; (4) regulatory authority; and (5) leadership. Present assignment of funotions

As indicated, all of the functions and responsibilities of the Public Health Service and the Surgeon General are carried out through its four major statutory units: (1) the Office of the Surgeon General; (2) the National Institutes of Health; (3) the Bureau of Medical Services; and (4) the Bureau of State Services. The present functions and responsibilities assigned to each of these bureaus is summarized below in order to furnish a basis for comparison with the assigument of functions proposed by the Secretary of Health, Education, and Welfare, in the event that Reorganization Plan No. 3 becomes effective. (See charts in Appendices E and F).

(1) The Office of the Surgeon General supports the Surgeon General in the policy direction and management of the Service and operates separate programs in such fields as international health and health mobilization. It acts as the focal point for public inquiries; undertakes broad programs of public information in health matters ; acts as the administrative focus for the National Center for Health Statistics and the National Library of Medicine; and provides (entralized and coordinating services in such fields as budget and financial management, administration, grants policy, programs and legislative planning.

The Office of the Surgeon General operates through five offices, five divisions and the National Center for Health Statistics. The offices are: Grants Policy, Equal Health Opportunity, Information and Publications, International Health, and Personnel. The divisions are: Administrative Services, Finance, Health Mobilization, Internal Audit and Public Health Methods.

(2) The National Institutes of Health is the principal Federal agency engaged in the conduct and support of medical and health-related research. Its mission is to conduct both fundamental and clinical research aimed at the conquest of disease and the improvement of human health, and to support similar research at universities, medical schools and other institutions; to provide support to those institutions for the development of research training; to aid in the construction of research facilities; and to facilitate the dissemination of information and the application of new knowledge to advance the health of the American people. It is also responsible for administration of controls designed to insure the purity, safety and potency of the Nation's biologicals, and for the conduct of research leading to their improvement or to the development of new ones that will prevent or control disease.

The National Institutes of Health is composed of 9 Institutes, a Clinical Center and 6 divisions. The Institutes are Allergy and Infectious Diseases; Arthritis and Metabolic Diseases; Cancer; Child Health and Human Development; Dental Research ; General Medical Sciences; Heart; Mental Health; and Neurological Diseases and Blindness. The Divisions are: Biological Standards; Computer Research and Technology ; Regional Medical Programs; Research Facilities and Resources; Research Grants; and Research Services.

(3) The Bureau of Vedical Services develops and administers a system of l’ublic Health Service hospitals, clinics, contract services and medical programs designed to meet the medical care needs of Public Health Service beneficiaries designated by law-American seamen, Indians, Alaskan natives, Federal pris. oners, U.S. Coast Guardsmen and others. It also administers foreign quarantine legislation, international sanitary regulations and the medical aspects of immi. gration laws; conducts training for physicians, dentists, nurses and other health personnel ; carries out studies and demonstration in clinical research, treatment

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