Social-Service Agencies Fear
Losing Funds as Money Goes
to Provide Medicine
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'I Want You Out of Business'

Cleve Jones, founder of the mile-long AIDS quilt, got a warm reception in October as he walked to the podium of a Washington, D.C., hotel to speak to AIDS social-service providers. But his message sent a chill through the audience.

Mr. Jones, who had almost died of AIDS, was now strong thanks to advanced AIDS medication. His message was that drugs, research and treatment -- not social services -- should be the priority for public and private funds.

"My point was, 'AIDS Inc., I want you out of business,'" he says. "Some people wanted to string me up."

Little wonder. For years, an army of AIDS social-service providers have been dedicating their lives to caring for people with AIDS, with little help from medical science. But now their world has changed. With new medications restoring some people to robust health, pressure is building to shift funds away from social services like transportation, housing and counseling, and into drugs and treatment. Without drugs and treatment, "What good are these services?" asks Jules Levin, executive director of the National AIDS Treatment Advocacy Project in New York.

That has left the social-service providers, having spent a decade setting up an array of programs with government and private funding, scrambling to protect their programs. "You can have the best medicines and medical services in the world, but if people can't get to the appointment, what good does it do to have a doctor sitting there someplace?" asks James Loyce Jr., executive director of AIDS Project Los Angeles, the biggest social-service provider in the area. Such providers say it is much too early to start slashing services; while the new drugs are a godsend, they don't work for everyone and they might ultimately be a big disappointment. Cuts, they warn, will hurt the neediest most.

Nasty conflicts, fueled by a combustible combination of selflessness and self-interest, have already erupted in some communities, as well as on the national level. They will worsen as more people seek the costly new combination therapies, which can easily cost $12,000 a year. While a big increase in the size of the federal AIDS funding pie would ease the strain, that is unlikely, given Washington's yearning for a balanced budget. And some agencies are finding it harder to raise private money, a development they blame on glowing news reports about a new class of drugs known as protease inhibitors, which are taken with older medications to produce a potent anti-HIV "cocktail." "The `cure' headlines are hurting us," says Allen Carrier, the director of communications for AIDS Project Los Angeles.

In the meantime, those pushing hard for treatment funds say the social-service agencies have become giant bureaucracies out to perpetuate themselves. "This is lives vs. jobs," says James Driscoll, the San Francisco-based director of AIDS policy for the Log Cabin Republicans, a gay political group. In an angry rebuke, Steve Johnson, director of public policy for the Northwest AIDS Foundation in Seattle, says he will be happy to find other work. "I'm tired of burying my friends," he says.

Says Mary Lucey, an analyst for the city of Los Angeles's AIDS office, who is herself HIV positive: "Everybody is in turmoil."

Ms. Lucey, a member of the planning council that sets local priorities for federal AIDS spending, sparked one such clash in September. She proposed a modest 4% across-the-board reduction in funding for dozens of social services, in order to increase by $800,000 funding for outpatient medical care, a category that includes doctors' visits, expensive tracking procedures called viral-load tests and a small drug-reimbursement program. (Most drugs for low-income people with AIDS, including the protease inhibitors, are paid for by Medicaid or a separate state drug-assistance program.) Ms. Lucey's proposal passed, but drew heated protests from some social-service providers.

"People started taking sides and becoming very defensive and protective of their categories," she says, citing "sheer greed" as a motivating factor. Her action, while modest, defined a chasm in the Los Angeles AIDS community that will widen under continued financial pressure. "It's going to get vicious," she predicts.

On one side of the divide in California is Michael Weinstein, the confrontational founder and president of the Los Angeles-based AIDS Healthcare Foundation, a sprawling but financially struggling medical provider. The 44-year-old Mr. Weinstein, who wears a lapel pin saying "Treatment=Life" and recently held a fundraiser honoring the industry scientists who developed the protease inhibitors, is pressing hard for shifting more funds into medical services. "When there wasn't effective treatment, money being wasted didn't matter so much," he says. "But now, every $2,500 in primary care and $10,000 in money for drugs pulls another person into the lifeboat." With the new treatments, he says, the need for support services will diminish.

On the other side of the divide are people like Sue Scott, executive director of the AIDS Service Center, a Pasadena agency that provides counseling, day care, family support and free food. Ms Scott, who is 60, vows to block any move to defund social-service organizations like her own. She says that services, especially those involving food, housing and transportation, will become even more important as people go on the complicated drug regimens. "People need stable environments and support systems around them for the drugs to really work," she says.

Both AIDS Healthcare Foundation and AIDS Service Center have a big financial stake in the debate: They depend heavily on the federal Ryan White CARE Act to make ends meet. (The nearly $1 billion federal program -- named for the Indiana teenager who emerged as a forceful opponent of discrimination against AIDS patients before he died of the disease in 1990 -- is designed to provide medical and other services for uninsured and underinsured people with AIDS).

Los Angeles County gets between $26 million and $31 million a year from the act's two main titles, divvied up among various providers and community-based organizations. The category most important to Mr. Weinstein, outpatient medical care, is already the top priority, getting a little less than half the funds; he thinks the category should get at least two-thirds of the total, given medical advances.

Ms. Scott says even the relatively small 4% cut approved by the Los Angeles planning council will hurt. Combined with a new federal rule limiting certain expenses, the cost to her agency, which now gets $1.2 million a year in federal funds, could reach "hundreds of thousands of dollars." In just one area, case management (in which case workers refer clients to services and help get them signed up for federal benefits) the cuts total $18,000. That means the employee who has been doing quality assurance -- running focus groups and distributing questionnaires to measure client satisfaction -- will be reduced to half-time status, unless other funding can be found.

Meanwhile, Mr. Weinstein's organization is likely to get an extra several hundred thousands dollars because of the 4% shift in priorities, a drop in the bucket for the $30 million nonprofit. Mr. Weinstein has set his sights on bigger game: Citing rising costs, he is urging the county board to earmark any new Ryan White funds for the coming year, which could be in the millions, for outpatient medical care, a proposal that Ms. Scott and other social service providers vigorously oppose. They want any extra money divvied up according to the planning commission's priorities, with medical providers getting some but not all of the funds.

While praising much of the work of the service providers, Mr. Weinstein also claims they are out to save themselves. "A whole industry has developed around this and as much as people said they wanted pink slips, now that the time is upon us, most aren't willing to downsize," he says. But Ms. Scott retorts that Mr. Weinstein is no different. "If Michael Weinstein wants all the money, he's doing the same thing," she says. "I don't know how you can say, `My service is better than yours, so I'm not doing a fiefdom, but you are.'"

For Mr. Weinstein, the year has been one of tumult, in large part because of the protease inhibitors. The New York native founded the organization in the 1980s to provide AIDS hospice care after a close friend was left lying on a gurney in a hospital hallway. Today, the foundation treats 3,000 people a year, most of whom are uninsured and indigent, at four outpatient clinics and two residential facilities, and is the largest community-based AIDS medical-care provider in the country.

Impressed by the new protease inhibitors, Mr. Weinstein made them widely available to his patients months before the drugs were reimbursable by the state. In the process, he says, he ran up a $1 million deficit and a soaring drug bill; he recently settled a lawsuit from a pharmacy-benefits manager by agreeing to pay $3 million over time.

"We prescribed those drugs from the day they were available, because we weren't going to decide who is going to live or die," Mr. Weinstein says. His action earned him the loyalty of patients like Bruce Teague, 43, a former stock broker whose health has improved markedly since he went on one of the protease inhibitors in the spring. "Without these things, I die," he says.

But Mr. Weinstein's budget-busting upset the other providers, who contend that management mistakes, not altruism, have caused the foundation's financial problems; in particular, his decision to open a new hospice earlier this year, despite declining demand. They worry that if the county has to bail him out, they could be affected. And his actions infuriated some county officials who saw them as a tactic to squeeze more funds from them.

Meanwhile, there are signs that social-service agencies are beginning to adjust to the idea that greater resources must go to medical services. "Some social-service people are thinking that overall, it's got to go that way," says John Schunhoff, acting director of public-health programs and services for Los Angeles County. "They just wish it wouldn't affect their agencies." And all the Los Angeles providers, medical and social, face another potential financial threat; they are expecting the state of California to press them to pony up some money for the state's cash-strapped AIDS-assistance drug program.

Many of the Los Angeles providers are trying to figure out how to reposition themselves for the future. At AIDS Project Los Angeles, officials are finding that it is taking more effort to raise the same amount of private funding. "People are starting to think, maybe we should be a $15 million organization, not a $21 million one," says Mr. Carrier, the communications director. Ms. Scott says she made certain that the lease to her new building will allow her to cut the space in half in five years, if necessary. And, in her most optimistic moments, she likes to kick around ideas about what to do with the agency down the road, like turning it into a gay senior citizens' center. She says she is determined not to become institutionalized and tells her staff they should view their work as good experience, not a lifelong career.

The debate about priorities is going on in other parts of the country as well. Late last year, just as the first protease inhibitor was coming on the market, a group of AIDS advocates in Washington, D.C., successfully pressed the local HIV planning council to shift $400,000 in funds from services to the city's underfunded drug-assistance program. "There was a lot of upset over that," says Hank Carde, a local activist. But this year, he says, there was general agreement about making medical treatment and drugs a top priority.

The dispute between drugs and services broke out at the national level in October, just as Congress was getting ready to adjourn, and is still reverberating through the AIDS community. A group of AIDS activists and drug-company lobbyists were trying to get $100 million in funding earmarked for the state AIDS drug-assistance programs, which are experiencing sharp cost increases because of the new AIDS drugs. But a coalition of local communities and social-service providers argued successfully that the funds should be sprinkled throughout all the services covered under the Ryan White bill, in part because of the increased need for primary medical care and diagnostic tests. The result: $50 million went to the state drug programs and the other $50 million went to social-service and medical programs.

The move infuriated Jeff Getty, an Oakland, Calif., activist, who gained fame when he had a bone-marrow transplant from a baboon. Some portion of the money going to the service agencies will fund medical services and viral load testing, and perhaps some drugs as well. But Mr. Getty, says, it won't be enough. "The rest will go to case management and counseling," he says. "The whole thing is a smokescreen."