Skip to main content
Resolutions & Amendments

27th International Convention - Chicago, IL (1986)

Health Care Cost Containment

Resolution No. 119
27th International Convention
June 23-27, 1986
Chicago, IL


Health care costs continue to increase faster than the consumer price index, increasing 9.1% in 1984 and 6.9% in 1985 while the CPI-U increased 3.6% and 3.9%, respectively In many jurisdictions, annual increases in health insurance plan costs have been much greater than overall health costs. In many jurisdictions wage increases have either been contingent on modifications to the health plan or reduced in order to preserve benefits; and


Joint labor management committees in several AFSCME jurisdictions have been successful in reducing the rate of increase in health care costs of the employer-sponsored health plans by improving delivery and utilization patterns while maintaining the quality of health care and not shifting costs from the plans to the employees. In some jurisdictions, for example, the States of Pennsylvania and Wisconsin, and the City of Detroit, modifications in health care plans have resulted in actual savings to the jurisdiction and the AFSCME-represented employees; and


A special Health Care Cost Containment Committee of the International Executive Board was appointed to deal with the issues. As a result of their deliberations, an AFSCME Handbook on Health Care Benefits was developed for use by council and local staff that included a number of approaches and strategies for health care cost containment; and


The Medicare hospital prospective payment reimbursement system, begun in 1983, became fully implemented this year. Because this system does not apply to all payers, hospitals may continue to shift costs to non-Medicare beneficiaries and other payers to make up for lost revenues, and refer higher-risk Medicare beneficiaries to public and inner city hospitals that already treat a disproportionate number of the elderly and the poor. The system has put further fiscal strain on public hospitals that is jeopardizing the continued viability of these institutions and the jobs of the public hospital workers. While AFSCME supports a prospective payment system not only for hospitals, but also for physicians and other medical suppliers, the system must include all payers; and


In several states, legislative approaches, including all-payer rate setting with indigent care coverage, regulation of insurance carriers to make them more cost conscious, and requirements for disclosure of price and quality information have proven to be effective in controlling health care costs and improving health services to all Americans; and


The International Union, the U.S. Conference of Mayors, and the National Public Employer Relations Association received a grant from the Federal Mediation and Conciliation Service to form a national committee to develop ideas and programs agreeable to both labor and management, for effective containment of health care costs. The grant supported limited funding and technical assistance to AFSCME labor-management committees in Baltimore, Maryland, and Milwaukee, Wisconsin, addressing health care cost containment. In Baltimore, an educational video was developed for the use of all public sector jurisdictions to show the need for and impact of joint cooperation on health plan issues; and


The Administration's approach to health care cost containment for Medicare for the elderly and Medicaid for the poor has been to impose increased out-of-pocket costs and to limit federal health care expenditures while shifting the burden onto the states and private insurers to make up the losses.


That this 27th International Convention urge all AFSCME councils and locals to support efforts through legislation to fight cutbacks, control costs and improve health services for all Americans; and


That AFSCME councils and locals participate, where appropriate, in joint labor management committees to control the costs of plans covering AFSCME represented employees, and that participation be continued past the initial implementation of any revisions for the ongoing monitoring of plan finances, utilization, and claims administration. Funds saved through such cost control may be applied to other contract improvements; and


That AFSCME councils and locals recognize the special role of public hospitals in serving everyone, regardless of the ability to pay, and work to ensure the fiscal viability of public hospitals; and


That the International Union continue to support a program of national health insurance as the only long-term solution to adequate health care for all the American people.


International Executive Board

Women's Committees of Councils 24, 40 and 48

Irene Herron-Steeger, Chairperson
Council 24, Madison, Wisconsin

Marcella McCallum, Chairperson
Council 40, Madison, Wisconsin

Paula Dorsey, Chairperson
Council 48, Milwaukee, Wisconsin

Joe Kreuser, International Vice President
President, Council 40
Madison, Wisconsin