Dr. Edward J. Hinman, director of hospitals and clinics for the U.S. Public Health Service, has been named executive director of the 110,000 member Group Health Association.

Hinman, a 23-year career officer in the Public Health Service is expected to take over the $86,000 health maintenance organization post Oct. 1.

The appointment of the 46-year-old physician, who now is U.S. Assistant Surgeon General, comes after a seven-month search by a committee made up of GHA physicians and board members. Hinman, one of 160 applicants for the post, was the second person offered the directorship of the trouble plagued health care provider.

The post was first offered to Dr. Ernest Saward, one of the leaders in the prepaid health care movement. Saward, a professor of medicine at the University of Rochester, was medical director for 25-years of the Kaiser-Permanente medical plan in Oregon, one of the nation's largest and most successful such plans.

Saward turned the job down because, he told a reporter, "they don't understand they have a problem. They're fine people but they don't recognize what problems the independent numbers of the board (of directors) are making."

Friction between the board and the GHA staff physicians culminated in an 11-day physicians' strike in April, the first such strike in the nation by a group of fully-trained doctors.

Hinman said in an interview yesterday that he thinks he can move Group Health forward and avoid further strife within the organization.

Hinman, described by one source who closely observed 10 years of his public health service career as "a very good administrator, bright and hard working," said he believes Group Health "should be on the cutting edge in looking at ways to improve health care delivery."

Unlike conventional insurance plans, which pay a portion of one's medical bills on a case-by-case basis, prepaid health plans like Group Health provide all of a members' basic health services and hospitalization for one yearly fee. The Group Health member pays his fee and then uses the services of the plan as he needs then during a given year.

"I believe group practice is probably the best way we know at the present time to deliver health and medical services to the general population," said Hinman, who during his tenure as director of the Public Health Service Hospital in Baltimore earned a reputation as an innovator who tried to develop hospital specialty services lacking in the surrounding community.

Hinman said he wants to work toward involving patients more in their health care, both in the preventive area and in helping them to better understand their medical problems and treatment.

During his tenure in the Public Health Service, Hinman was responsible for the administration of nine hospitals, 30 clinics and a health care program involving 5,604 employes, including 700 full-time physicians.

Hinman is replacing outgoing GHA executive director Louis J. Segadelli, who will remain in the post until Oct. 1 and then will serve in a consultant's capacity until Jan. 1.