The reorganization of DHEW: what happened, why, and so what?

This is a case study of the restructuring of the Department of Health, Education and Welfare that was announced by the Secretary, Joseph Califano, in March 1977. Balutis addressed the question: Did the reorganization accomplish the Secretary's purposes? Of the 12 goals outlined by Califano, the author feels that only those seeking to consolidate supervision over fraud and abuse were achieved. As a result of the reorganization, both Medicare and Medicaid are reviewed by a single staff, a change designed to achieve a "more balanced, integrated, and active" effort. Two of the purposes for restructuring were: improvement of internal efficiency and cost-savings; it is difficult to discern real progress in these areas. The author terms the overall effect "traumatic" because the process remains incomplete and other changes appear emminent. He concludes that reorganization is useful only for addressing the "fragmentation of related programs among different organnizational units." Balutis argues that reorganization in and of itself is not likely to increase efficiency or reduce government costs, and may in fact, be counterproductive to these objectives.