Throwback Thursday: In 1976, National Center for Health Services Messes Up $20M in Grants and Contracts
In June 1976, the National Center for Health Services received a Golden Fleece Award after it was revealed that more than $20 million of their grants and contracts — more than $104 million in 2022 dollars — were routinely not completed on time, cost up to five time the original contract, and “contained low quality and highly questionable results.”
Sen. William Proxmire, a Democrat from Wisconsin, gave awards to wasteful and nonsensical spending, eventually handing out 168 Golden Fleece Awards between 1975 and 1988.
The senator requested an audit from the General Accounting Office, now the Government Accountability Office, which found that one seven-year project to develop a comprehensive computer system for patients medical and billing records cost more than $10 million but the data in the project was not only unavailable to the public but to the National Center for Health Services — now the National Center for Health Statistics — itself.
Another one-year study originally cost $325,000, ballooned into a four-year, $1.25 million project.
That project was supposed to compare the costs of different medical offerings, like group practice or solo fee for services, or use of paramedics.
"An evaluation in the third year, but after the contract was increased by $930,000, and extended to four years, found that, '… the work had generally been of low quality.'"
It found that of the 48 papers produced, only one was published and that was in a low-quality journal and that the “work would neither contribute to or expand the existing body of … knowledge … or be particularly useful for policy formulation.”
After spending yet another $1.6 million to study “how to make hospitals, clinics and other health care institutions more efficient, a group of experts found that data provided by the study was of low quality and of questionable value and that the project director was relatively uninformed in the health services field,” Proxmire summarized.
Beyond the problems with the specific studies, the GAO audit found, “The Center lacks the ability to determine whether goals are achieved.”
It also found that 67 percent of all contracts were noncompetitive awards.
The audit “indicates to this senator that the Center more than rivals the Pentagon in cost overruns, modified contracts and late deliveries,” Proxmire said.
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