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We aggressively put together a Health Program, and since government funding may not be available to meet our future needs, the only solution, other than to cease to exist, was to create a valued service that we could offer to our member groups for a nominal fee. We decided to go the managed competition route--the same concept that most people are expecting to come out of the White House. This was a result not so much of trying to copy cat the concepts of the Jackson Hole Folks, but rather of coming to a logical conclusion on our own as how to best wrestle with the health care dragon. Finally, in the summer of 1992, we were ready to take the giant step of doing something about health care, rather than simply acknowledging the problem. Our journey into health care began two years ago when PALM co-hosted the Illinois State Labor-Management Conference, whose theme was "Labor and Management in the Midst of the Health Care Crisis." One of the speakers at this event was William Hembree, Director of the Health Research Institute in Walnut Creek, California. Hembree was soon to become a significant influence in the direction we would take. He began working with our health care committee as a facilitator and instructor. We began to educate ourselves about the overall problems in health care. We also began to determine what we wanted to do about this issue. The hours spent on developing goals and objectives would eventually pay off, even if at times we were unsure if the time spent on this effort was productive. Finally, in the summer of 1992, we were ready to take the giant step of doing something about health care, rather than simply acknowledging the problem. That first step was to put together our own prescription drug card program as the best and easiest way to lower costs to our member organizations. Fortunately, we knew that we needed outside expertise if we were going to accomplish our task. Don Kline, president of Applied Concepts, a Peoria-based health care consulting company, was hired by the PALM board to help us. We began by sending out requests for proposals to pharmacy provider organizations across the country. After receiving ten proposals, we narrowed the number to four and broke our committee into four corresponding subcommittees. The subcommittees met with each of the four finalists and made their reports to the health care committee. In August of 1992, the committee recommended to the board that an agreement be worked out with Walgreens Healthcare Plus, the pharmacy managed care organization of Walgreens. The decision to go with Walgreens was not based on cost alone, even though their prices were far below all the others. It was also based on our belief in Deming philosophy of establishing a long-term relationship. At the same time that the Walgreens agreement was announced by the PALM board, we introduced a newly formed subsidiary called Labor-Management Cooperative Health Programs (LMC Health Programs). LMC Health Programs, a not-for-profit organization, was created as a health care purchasing cooperative owned by both labor and management, modeled after the joint ownership of the Taft-Hartley Trusts. Through the national network offered by Walgreens and its claims processor RESTAT (RESTAT is a Wisconsin company that in addition to claims processing also has a nationwide network of over 30,000 pharmacies), LMC Health Programs is ready to offer cost savings to organizations coast to coast. It is also estimated that by May 1, 1993, LMC Health Programs will have a national hospital PPO network. As a labor-management cooperative, we are willing to financially help those labor-management committees or construction committees that want to organize LMC Health Programs. We feel this arrangement creates a win-win situation for everyone. To date, labor-management committees from Pennsylvania, Florida, Iowa, and Illinois have expressed interest. We have been especially encouraged by the support from the Illinois State Labor-Management Cooperation Committee, the Illinois Department of Commerce and Community Affairs staff, and the other labor-management committees in Illinois who share our excitement in this endeavor. As to the observation by the Medical Tribune, we were happy to be at the right place at the right time. Resolving health care as an issue of collective-bargaining requires collective solutions. We believe that through LMC Health Programs we have taken a step closer to that goal.