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arrangement will be reviewed and consideration given to the possibility of further joint work by SSA and the Academy,

Such project areas as the following will be identified and structured as work efforts: (1) on-going analysis of SSA/contractor relationships (including involvements of other DHEW components), with reports on findings and recommendations published at appropriate times; (2) analysis of the role of SSA's On-Site Representatives, other techniques and devices used to measure and to optimize contractor performance, and regionalization of Medicare activities; (3) exploration of the roles of senior SSA officials in relationships with private contractors; (4) examination of the question of cost incentives and cost reduction; (5) consideration of alternatives to contract cancellation for improving contractor performance; and (6) exploration and possible testing of alternatives to the present structure of administration.

Other areas in which projects may be developed and specified are the quality and quantity of information flow within SSA and between SSA and contractors, its use for evaluation and decision-making, and its responsiveness as a system to anticipating and preventing crises; various facets of the operations of the Bureau of Health Insurance, particularly in policy formulation; and SSA staffing policies and practices and possibilities of organizational exchanges of personnel.

A special technique to improve working relationships will be two “residential" conferences, one each in fiscal years 1972 and 1973. These will be organized and planned by the National Academy, with SSA assistance, to bring senior executives and staff of SSA and its private contractors together and involve them jointly in the activities of the Academy panel. Issues will be presented and discussed in a context designed to promote a commonality of goals and a mutual pursuit of objectives in the public interest. Meetings will include approximately thirty individuals from the various organizations concerned and will be of two weeks duration. Each will address some specific set of Medicare problems with the dual goals of programming action on the issues and developing a team approach to solutions. Plans and agenda for the meetings will be based on preceding efforts to identify divergent values and define corrective lines of approach.

he Academy will also undertake a modest teaching and research program. Its purpose will be to strengthen the community of interests between graduate schools and those responsible for administering the Medicare program. It is considered quite important to develop liaison and a dialogue with the academic world. The Academy will therefore attempt to interest a small number of faculty and graduate students in the way in which the Medicare program is or could be implemented, looking to the benefit that could accrue from research undertaken particularly in administrative behavior and organizational communication. This activity will center around a graduate student summer internship program and the support of a small amount of .faculty research.

V. National Academy/SSA Relationships

Formal liaison of the panel of the National Academy will be with the Commissioner of Social Security, the Deputy Commissioner, the Assistant Commissioner for Administration and the Director of the Bureau of Health Insurance. Policy determinations and overall planning to determine and to adjust the course of project activities will be made through interaction at this level. Major problems that may develop and significant recommendations will also be considered by the panel with this group of SSA officials. The panel will publish annually a report to the Commissioner describing activities and findings, and making appropriate recommendations.

The panel will make itself available to the Commissioner and these other senior SSA executives to make sure that panel members understand their objectives and problems, and to advise and comment on Medicare administrative policies and their translation into action programs. In this role, they will act not only to give counsel but also to develop ways to assist in achieving a broader understanding and acceptance of the policies established by SSA senior executives. From time to time, the panel as a whole may meet with other SSA officials and staff to consider with them various problems or lines of thought and possible action.

The Social Security Administration will establish a permanent group to work as appropriate with the Academy panel on programs and projects. It will in addition, make such administrative arrangements as may be necessary and provide appropriate administrative support to the panel. The head of this work group will act as the dayto-day SSA liaison representative with the Chairman of the panel and the Academy's staff representative.

VI. Arrangements for Funding

The preliminary estimate for the contract cost of the project over a period of threeyears is approximately $275,000. This is spread as follows for each of the years: $75,000; $100,000, $100,000. SSA intends to pursue the project by single fiscal year contracts with the National Academy, making a first contract for fiscal year 1971 in the amount of approximately $75,000.

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Beyond fiscal year 1971, the Academy proposes some funding from other sources to emphasize the fiscal independence of the Academy as well as its impartiality of judgment. SSA is in agreement with the value and purpose of this approach. It is therefore planned to "step fund” the project, with SSA providing 60 percent of the contract cost in fiscal year 1972, and 30 percent in fiscal year 1973. The Academy and SSA will approach philanthropic foundations to seek the additional funds. Several of the private groups involved in Medicare may be interested in making small contributions to the project as a sign of support. If so, they will be included.

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