Prepared Statement By Kenneth S. Apfel Commissioner Of Social Security
Before The House Committee On Ways And Means Subcommittee On Social Security
Subject - Information Technology Enhancements
July 29, 1999
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me to testify about the Social Security Administration's (SSA) progress on implementing information technology initiatives. These initiatives are critically important when we consider that our ability to manage our workloads now--and in the future--rests on our ability to use technology extensively and effectively, and I am proud of SSA's achievements in this area.
It is clear technology has been, and will continue to be indispensable to SSA's success in achieving the goals set forth in the Agency Strategic Plan. The success of goals such as the ability to deliver customer-responsive, world class service, to make SSA program management the best in the business, with zero tolerance for fraud and abuse, and to be an employer that values and invests in each employee, is directly linked to SSA's ability to apply advances in technology. As you yourself have noted, Mr. Chairman, computers will play a critical role in our ability to process benefit applications, pay benefits timely, and guard against fraud.
From 1992 through 1999, SSA has spent $4.3 billion on information technology to support its programs. These costs include funds spent from the Information Technology Systems budget, the automation investment fund, and salaries and expenses of information technology personnel. My testimony today will focus on how we have invested those resources and what benefits have been returned as a result of those investments. The areas I will discuss today are: SSA's preparedness for the Year 2000; automation of our disability processes; a project to provide our employees with workstations with the capability to process claims and respond to customer inquiries (also known as the Intelligent Workstation/Local Area Network or IWS/LAN project);and issuance of Social Security Statements (formerly known as Personal Earnings and Benefit Estimate Statements, or PEBES).
Preparing for the change of century date--from 1999 to 2000--is one of the biggest challenges ever to face the technology industry. At SSA our national computer center maintains and operates hundreds of mission-critical systems supported by over 35 million lines of in- house computer code, as well as hundreds of commercial off-the-shelf vendor products that had to be reviewed and changed where necessary to ensure that January 2000 payments will be made correctly and on time to the nearly 50 million Social Security and Supplemental Security Income (SSI) beneficiaries who could be affected by the Year 2000 (or Y2K) changeover.
I want to thank the Subcommittee for holding this hearing and for your efforts in making the public aware of SSA's progress to make sure that we will pay benefits timely and that SSA's system will function as it should. As I testified before the Ways and Means Committee in February, SSA's benefit payment system is Year 2000 compliant. As we like to say, "We are Y2K OK." We have worked closely with the Treasury Department, Federal Reserve, and the Postal Service to ensure that Social Security and Supplemental Security Income (SSI) checks and direct deposit payments for January will be paid on time. Since October 1998, payments for both Social Security and SSI programs have been made with Year 2000-compliant systems at both SSA and Treasury.
We worked with the State Disability Determination Services (DDS) to make sure that the 55 State DDSs that have automated systems to support the disability determinationprocess are Year 2000 compliant. I am happy to report that as of January 1999 all of the State DDS systems are Year 2000 compliant, tested, and implemented.
We recognize that it is not enough for SSA to be Year 2000 compliant if our trading partners are not ready. We have worked very closely with all of our trading partners. I am pleased to report that all outgoing data exchanges are Year 2000 compliant and implemented. All but three of our incoming data exchanges are compliant and implemented. The remaining three are in testing and will be implemented in early August 1999.
We have worked hard to make sure that all of our mission critical systems are Year 2000 compliant, and now we are taking steps to make sure that we do not introduce possible date defects into these systems. Whenever a system that has been Year 2000 certified is changed due to legislation or other requirements, we are recertifying the system to make sure it is still Year 2000 compliant. In addition, beginning this month we have instituted a moratorium on installation of commercial off-the-shelf software and mainframe products, and we will impose a similar moratorium in September for discretionary changes to our own software. The moratoriums will be in place through March 2000.
We have developed a detailed strategy that comprises the comprehensive set of actions that will be executed during the last days of 1999 and the first days of 2000. The strategy also includes the activities leading up to the critical century rollover date, such as identification of key personnel involved, preparation of facilities checklists, establishment of the Y2K command center, a schedule for testing all systems over the weekend, and other activities. Implementation of the strategy will ensure, to the extent possible, that SSA's facilities and systems will be fully operational on January 3, 2000--the firstbusiness day of the new century. That is, service to the public and our trading partners will continue without interruption due to the change of century date.
Finally, we recognize that our system depends on infrastructure services, such as the power grid or the telecommunications industry and third parties, which are beyond our control. In March 1998, SSA completed its Y2K Business Continuity and Contingency Plan, which is updated quarterly. The plan identifies potential risks to Agency business processes, ways to mitigate each risk, and strategies to ensure continuity of operations.
As part of the plan, we have in place local plans for each of our field offices, teleservice centers, processing centers, hearings offices, and State DDSs. We have also developed contingency plans for benefit payment and delivery. We continue to work closely with the Treasury Department and the Federal Reserve to identify any Year 2000 issues that might affect direct deposit payments. While we have not identified any so far, ira problem should occur in January, the Treasury Department will quickly issue a replacement Social Security check, and SSA offices will provide emergency payment services to beneficiaries with critical needs. I do not consider Social Security's job done until timely and correct benefits are in the hands of all of our beneficiaries.
I know that we are all concerned about ensuring that all beneficiaries are paid on time, but I want to be sure to urge you to resist proposals to make the January 2000 Social Security benefit payment in December 1999. After a thorough review of the pros and cons of making payments early, the Administration determined that such action is not necessary given the readiness of agency payment systems and business continuity and contingency plans.We believe that there are risks associated with making payments early.
Such actions could easily be interpreted by the public as an indicator of the government's inability to make automated payments in January 2000. Such a signal could prove disastrous if citizens decide to withdraw their currency in anticipation of a disruption in benefits or other payments, or try to cancel electronic payments and revert to check payments. At this point, the damage that could result from public overreaction could be far more serious than technology risks resulting from potential Year 2000 problems. Moreover, providing early payments in December could require the government and industry to make additional programming changes to account for the payments with the requisite testing of those systems and would raise a number of difficult tax policy issues if there were a move to extend early payments of other transactions in the public or private sector beyond simply Social Security payments.
As a part of our strategic goal of delivering customer-responsive, world class service and our strategy for providing employees ready access to the information they need to serve the public as described in SSA's Strategic Plan, SSA initiated the IWS/LAN project. As you know, Mr. Chairman, the Strategic Plan paints a broad picture of SSA's future, as well as our means and strategies to achieve our long-range goals. SSA's business approach to providing world-class service while workloads grow relies on business process and information technology improvements, such as IWS/LAN. This technology is key to our business strategy because it provides employees with state-of-the-art tools to serve the public and it opens up exciting new possibilities for doing business with our customers in the future.This project establishes a national computer network including desktop computer workstations for all SSA and DDS employees supported by appropriate communications and software systems. This technology is critical in taking claims efficiently and providing online service to national 800-number callers. This project also reflects SSA's conviction that employees deserve a professional environment in which they can readily access information enabling them to increase productivity and to provide better service to the public. SSA's strategic goal--to be an employer that values and invests in each employee, relies in part on providing such tools and training needed for high quality performance.
In 1995, at the time Social Security became an independent agency, one of our first undertakings was the implementation and distribution of this new computer equipment. SSA has accomplished what many said could not be done. I am happy to report that we have successfully installed more than 75,000 workstations and 1,742 local area networks in SSA and State DDS offices throughout the country. To achieve this, we installed the new equipment in 75 offices per month, which was a major undertaking, as all installations had to be done on the weekends. I am particularly proud that these installations were accomplished without any disruption to our ability to serve the public.
SSA is currently in the process of acquiring an additional 6,900 workstations and 275 local area networks to complete the installation for all employees. This project is one of the largest information technology initiatives ever undertaken in the Federal government.
The IWS/LAN project provides the enabling infrastructure for many of the technologybased initiatives that SSA is implementing. It provides a standardized platform and architecture that now exists throughout SSA and the DDSs and our hearings and appeals offices, which I described earlier. In addition, the accomplishments of IWS/LAN pave the way for our ability to provide service electronically and exploit emerging technologies to improve service to SSA's customers.
Our redesigned title II system is a major investment that has enabled us to do our job more efficiently. That technology has allowed us to improve the services we provide, as well as the manner in which we provide those services. When the public comes in to file a claim for Social Security or Supplemental Security Income benefits, their claims are now processed faster and with greater accuracy than ever before. We are able to handle more than 70 million telephone calls per year to our 800 number by using automated responses to our customers, as well as by using technology that allows our employees to quickly locate necessary information. Our streamlined process for reporting W-2s allows us to provide more timely and accurate feedback to our nation's employers. Finally, we are now making use of the Internet to provide our customers with a wide range of SSA services. And, we are in the process of converting our processing centers from paperbound processing to paperless, electronic processing, which will make these offices more efficient, less costly to operate and will provide better services.
Automation of Disability Process
In 1992, SSA began an ambitious software development project, the Reengineered Disability System (RDS), to provide an automated disability case processing system. The primary goal of RDS was to improve service to our disability clients, by reducing processing time and providing a framework for more consistent and uniform disability decisions.Our initial plan was to develop a single system that would support all the SSA components involved in the disability process. That includes our nationwide network of field offices, the 55 State DDSs and our hearings and appeals offices. We developed a prototype system and implemented it in the pilot SSA field offices in Virginia and the Federal DDS in our Baltimore headquarters. While we achieved some success in the pilot, we ran into significant performance problems.
Because of these performance problems, we felt it would be prudent to obtain an independent evaluation of our pilot system. We delayed further pilot implementation and contracted with Booz-Allen and Hamilton to evaluate the RDS process and recommend options for proceeding.
Based on the contractor's recommendations, we are changing the way we will deploy automation to the disability process. Rather than replace all of the existing DDS systems with one central system, we will build on the strengths of the existing software systems in the DDSs, and link them electronically to an automated field office disability system, based on the RDS system we piloted in the Virginia offices. We are now calling this approach eDIB.
RDS was a very large initiative that required a substantial early investment to build the hardware and software infrastructure needed to support the prototype system. From 1992 through 1999, SSA invested a total of $4.3 billion in information technology investments; we spent a little over $71 million on this project. Roughly, one half of this $71 million investment continues to be applicable to the new strategy recommended by the independent review. Included in this is the automated system which will be used in SSAfield offices to strengthen the disability application process and enhance its cost effectiveness. The remaining half is the price we have paid to learn a number of valuable lessons in how to manage the risks associated with deploying this type of technology throughout SSA and the 55 DDSs.
Our new strategy will focus on working with the DDSs to build on their systems, providing more flexibility in the process and recognizing differences in case processing among the States. As with our successes with IWS/LAN and Y2K, SSA needs to continue to strive to apply advances in information technology to improve our disability claims process, and to do so in a way that manages the risk inherent in any technology improvements.
Mr. Chairman, let me illustrate the reason why we must automate the current disability claims process. If you were to walk into one of our offices today to file a disability claim, the SSA representative would complete a paper questionnaire to document information about your disability. The form includes doctors' names and addresses, medications you take, tests you have had performed, documentation of your daily activities, and other detailed medical information. Depending on your individual circumstances, the form might need to be supplemented by additional information concerning your vocational history. Once this was completed, we would need to assemble the folder and mail the information to the State DDS.
Compare that with the improvements an automated process would provide us and which will be facilitated by the software I mentioned earlier in my testimony. All of the information needed for the claims application will be entered electronically by the SSA interviewer using the work station and transmitted electronically to the State DDS. Wewill eliminate the mailing time delays. We will reduce the need to recontact the disability applicant because the system would assure that all questions are answered and readable. Information technology will give us a quicker, more efficient process and provide much better customer service.
An important facet of the new disability process revolves around our efforts in working with the medical community to use advanced technology to efficiently obtain an exchange of medical evidence. As you know, difficulties in obtaining medical records have a critical impact on our ability to make timely and accurate decisions on disability claims.
Our efforts in this area are focused on enabling providers to electronically transmit medical evidence quickly and securely. The ability to receive this evidence electronically will facilitate a number of steps during the disability process resulting in significant customer service improvements.
Technology improvements will also be invaluable as we work to improve the hearings process, which is a key performance indicator of our strategic plan goal to provide customer-responsive, world-class service. Our hearings office improvements initiative relies on enhanced automation and management data collection and analysis. This will facilitate the monitoring and tracking of case processing and development steps; facilitate the transfer of case-related information; help ensure the completeness of case development and analysis; and increase the efficiency of highly variable labor- intensive functions such as scheduling.
SSA and its State partners remain committed to the common goal of providing automation to improve the processing of disability claims. We plan to follow a strategy that will manage the risks involved in this initiative. By making incremental changes, bycarefully developing and evaluating our prototypes before they are put into production, and by making modest investments that build on our existing infrastructure, I am confident we will be able to significantly improve the way we manage the disability claims process.
Social Security Statements
One of SSA's basic responsibilities to the public is to help Americans understand Social Security and its importance to them and their families. As part of our public education efforts, SSA has been issuing earnings and benefit estimate statements to the public since 1988. And, as I mentioned at the beginning of my testimony, our Strategic Plan identifies strengthening public understanding of our Social Security programs as one of our five Agency Strategic goals.
So far, more than 37 million people have requested and received earnings and benefit statements--formerly known as Personal Earnings and Benefit Estimate Statements (PEBES). In amendments to the Social Security Act in 1989 and 1990, Congress provided that SSA was to phase-in issuing PEBES by issuing them to all workers aged 60 or over in FY 1995; in FY 1996 through FY 1999 to individuals who reach age 60 in those years; and annually to all covered workers aged 25 and older beginning in FY 2000. In addition to the PEBES mailing required by law, SSA sent PEBES to increasingly younger individuals in advance of the schedule in the law. SSA sent a PEBES to workers aged 40 and older--about 73 million people--between September 1995 and March 1999.The statements we will begin to mail in October--the largest customized mailing ever undertaken by the federal government--will be our newly-designed Social Security Statement which, like its PEBES predecessor, provides estimates of Social Security retirement, disability, and survivors benefits that workers and their families could be eligible to receive now and in the future. The automatic mailings will take place at a rate of about half a million Statements per business day, with about 10 million issued each month. Workers can expect to receive their Statement each year about three months before their birthday.
SSA's computer based recordkeeping and information technology improvements will allow us to produce and mail the statements for about 56 cents each This is a considerable achievement when we consider that, when we began issuing PEBES in 1988, there were private vendors producing their own version of benefit estimate statements for individuals and charging them a fee of $10 or more.
SSA redesigned the PEBES format and language to make it easier to read and understand. We tested four prototypes with focus groups in three different age groups (ages 25-35, 36-50, and over 50). Additional public input was obtained through a mail survey of 16,000 randomly selected individuals from the same age groups. Focus group and mail survey participants alike overwhelmingly found the redesigned statement an improvement over PEBES.
I am pleased to report that the results of a recent Gallup survey, undertaken at SSA's request, revealed that individuals who had received a statement had a significantly increased basic understanding of Social Security. The survey also found that the individuals responding had an increased understanding of some important basic featuresof Social Security. This relationship validates the performance measures we use to track our progress in meeting our "Public Understanding" strategic goal: we track both the increasing number of PEBES we send to the public and the increasing public knowledge about our programs.
The information in the Statement provides workers with an easy way to determine whether their earnings (or self-employment income) are accurately posted on their Social Security record. This is important because the amount of a worker's future benefits will be based on his or her earnings record. The Statement tells how to correct inaccurately posted earnings.
We encourage workers to use the Statement to plan for their financial future. Workers can use the Statement to better plan for their financial needs when they retire, or if they become disabled or die and leave survivors.
As I said at the beginning, Mr. Chairman, SSA's ability to use technology and make systems improvements will be critical to our success as an Agency, given the workloads we will face. I am proud to report that SSA was one of only two Government agencies to receive an A grade in management of information technology from the Government Performance Project from the Alan K. Campbell Public Affairs Institute of Syracuse University's Maxwell School of Citizenship and Public Affairs.Use of technology has already enabled SSA to improve significantly the service it provides to the American people, and I would like to cite a few examples to illustrate this point:
- In 1982, it took 6 weeks for a person to receive a Social Security card from SSA. Now it takes 5 days.
- In 1982, it took 39 months to post annual wage reports to workers' earnings records. Now, this task is completed in 6 months.
- In 1982, it took four years to perform annual recomputations for beneficiaries entitled to higher benefits. Now this is done in 6 months.
- In 1982, SSA needed three weeks of computer processing time to calculate annual cost-of-living increases. Now, this done in 24 hours.
- In 1982, it took 15 days to issue an emergency replacement payment. This is done now in 5 days.
I am pleased with these achievements, but I believe that SSA can do better. In time, we believe the investments in automation technology that SSA has made in recent years will be vitally important in enabling SSA to manage the increasing workloads it will experience in coming years.
As we look to the future, access to data will be vitally important to SSA's future plans to improve program integrity. For this purpose, the Administration supports the House-passed bipartisan "Foster Care Independence Act of 1999" (H.R. 1802), which includes provisions for data matches, and I would like to commend the Committee, Mr. Chairman, for your efforts on this bill. H.R. 1802 expands the pool of data available for making SSI eligibility and payment determinations by requiring frequent SSA matches with the Health Care Financing Administration and by facilitating electronic exchanges of information from financial institutions about financial assets owned by SSI applicants and beneficiaries. It is data matches, such as these, that will help SSA continuously guard the integrity of our programs.
Throughout its almost 65-year history, Social Security has made a difference in the lives of Americans, and we have a responsibility to be careful stewards of our programs both now and as we move into the 21 st century. As demonstrated in our Agency Strategic Plan, we have ambitious goals, and I am proud of those computer systems achievements which will provide the framework for us to achieve them. I look forward to working closely with the members of this Subcommittee in that spirit on these important endeavors, and would be happy to answer any questions you might have.