Book Excerpt: AIDS Healthcare Foundation Risks Bankruptcy To Save Lives

AHF staffers march in the L.A. Gay Pride Parade in the 1990s

AHF staffers march in the L.A. Gay Pride Parade in the 1990s - photo by AHF

In 1996, AIDS Healthcare Foundation faced a difficult decision — pay for the new “AIDS Cocktail” and possibly go bankrupt or wait for government reimbursement and not risk financial ruin. With so many terminally ill patients’ lives on the line, AHF chose to foot the bill. Not everyone at the organization was happy.

In Righteous Rebels: AIDS Healthcare Foundation’s Crusade to Change the World, we go back to a crucial point in history of both AHF and the AIDS epidemic in the United States. Between 1981 and 1995, hundreds of thousands of people had died from AIDS, with no treatment and vaccine available.

In 1996, however, Dr. David Ho, a top AIDS researcher, announced at the International AIDS Conference in Vancouver that a breakthrough combination drug therapy, known as the “AIDS Cocktail,” reduced the viral loads of people living with HIV/AIDS to undetectable levels. AIDS patients, in other words, no longer faced an almost certain death sentence.

At the time, AHF was only providing hospice care to terminally AIDS patients in the Los Angeles area. As we see in this book excerpt, the amazing discovery of the life-saving AIDS cocktail forced AHF and its co-founder Michael Weinstein into a precarious situation.


After the initial elation over Ho’s announcement, Michael Weinstein and AHF had to face some hard facts. The AIDS cocktail was expensive—a year’s worth of treatment cost around $12,000—and government was slow to set up reimbursement systems for providers such as AHF that paid for combination drug therapy for the poor and uninsured. If AHF wanted to save even more patients, it had to dip into its quickly depleting financial reserves. In addition, by bringing people back to life, AHF was directly contributing to the demise of its own hospices, which brought in essential revenue.

“We’d just opened our third hospice,” said AHF senior vice president Peter Reis, referring to Linn House in West Hollywood. “We had mortgages, and it was a lot of money to shell out.”

Within AHF, some employees didn’t want to put the organization in financial jeopardy by paying for the AIDS cocktail without government reimbursement. Others believed that AHF shouldn’t stray from its core mission of providing hospice care. Weinstein didn’t agree with either camp.

“Whether to give the hospice patients drugs was, to me, a very clear-cut moral issue,” said Weinstein. “I’d be damned that we now have a life preserver and that people aren’t going to get it. It seemed to me that we didn’t really have a choice. On the cost-benefit scale, what if we had survived but continued to be a hospice organization and allowed those people to die? Morally, it would be reprehensible.”

He added, “I couldn’t really get why people would want to stay in death mode when they could switch to life mode. That was just weird.”

In pure business terms, Weinstein thought that sticking with hospice care was actually “suicidal” for AHF. With the coming of combination drug therapy, the future of AIDS healthcare had been undeniably altered, and hospice would soon become obsolete. In Weinstein’s mind, AHF had to adjust, especially if it was serious about providing the best, most current care to its largely underprivileged clientele.

The turmoil within AHF closely matched a larger schism that was developing in the national AIDS movement, which was detailed in a 1996 Wall Street Journal story titled “Powerful Treatments Create Growing Rift Among AIDS Groups.”

In essence, one group wanted the federal government to aggressively expand access to the life-saving AIDS cocktail while another group wanted to protect the government funding that paid for social services such as pre-cooked meals, housing, and psychological counseling. The latter group was largely compromised of social service providers who believed their work was still valuable to people with AIDS and didn’t want to go out of business.

When interviewed by the Wall Street Journal, Weinstein held the unmovable opinion that the bulk of AIDS funding should be directed towards medical treatment. While he applauded the important work of social service groups, Weinstein also told the paper, “A whole industry has developed around this [disease] and as much as people said they wanted pink slips, now that the time is upon us, most aren’t willing to downsize.” Weinstein was referring to the often-repeated sentiment of AIDS organization leaders that they hoped a cure would someday force them to shut their doors.

Weinstein’s critics didn’t take kindly to his plainspokenness, and shot back in the article that he was making a power grab for money. Perhaps so, but an AHF patient, who was also interviewed for the story and was already taking the AIDS cocktail, unknowingly explained why. “Without these things,” he said about the drugs, “I die.”

Regardless of what his critics were saying, Weinstein wasn’t waiting around for a government payday. Instead he decided that AHF would risk bankruptcy, pay for the AIDS cocktail, and put hundreds of AHF patients on drug therapy as quickly as possible. AHF’s Dr. Charles Farthing backed Weinstein’s decision. AHF Chief Financial Officer Craig Thompson was opposed.

“He thought we were going under,” said Weinstein, “and there was good reason to believe that. He thought that I was reckless.”

(Thompson declined to be interviewed for this book.)

As expected, AHF soon got hit with a double-whammy. First, since people were getting well, the number of hospice patients plummeted by 50 percent, which caused AHF to lose around $200,000 per month in government funding. On top of that, the bill for drug therapy was skyrocketing into the hundreds of thousands.

“We basically screwed ourselves in-house,” Reis said matter-of-factly. “It was a dangerous position to be in.”

Weinstein freely admitted to me, “We were teetering on the edge of bankruptcy. There was no turning back. We had said, ‘Okay, if we go down, then we go down. But this is what we are doing.’ You could say that was a reckless thing, but the line between visionary and fool is a very narrow one.”

Longtime AHF consultant Miki Jackson said, “The mission was to do all we could to save people’s lives in any opportunity we had, no matter what it cost us. And we did that.”

As a kind of sales pitch and counter-argument directed at the public, critics, politicians, and AHF employees alike, Weinstein came up with another motto: “Treatment = Life.” It made clear that Weinstein believed drug therapy, not social services, ultimately kept people alive. It was also a life-affirming spin on ACT UP’s famous slogan: “Silence = Death.”

The internal pushback at AHF continued to be intense, especially when, in 1996, Weinstein closed Chris Brownlie Hospice, which held undeniable sentimental value for him. Some staffers lost their jobs and others were moved into different positions, but nearly all of them were angry. For years, they had attended to every need of the dying and put significant emotional investments into their work. “They felt betrayed,” said former AHF manager Jerry Baughman, who acted as a referee and conciliator between Weinstein and the agitated employees. Then, with AHF’s financial health still in serious question, Craig Thompson decided to take matters into his own hands.

In the winter of 1996, Thompson secretly approached several members of AHF’s board of directors with an idea to oust Weinstein and take over the reins himself. The plan didn’t stay quiet for long. Even John Brown, who had left AHF’s board, got wind of the situation.

“I talked with a couple of board members and I made my support for Michael known,” said Brown. “Craig was delusional.”

AHF veteran Jessie Gruttaduaria also heard about Thompson’s intentions.

“It was very, very shocking,” she said.

L.A. gay nightclub owner Gene LaPietra, who had given AHF vital seed money to start up in 1987, learned about what was stirring, too. He said, “I told people who were passionately wanting to get rid of him that if you replace Michael at the helm of AHF, this organization, like so many others, will be slowed and it won’t go anywhere.”

And, of course, Weinstein was tipped off—two employees showed up at his home one evening and told him what was unfolding. Weinstein quickly reached out to his allies on the board.

Over the next few weeks, Thompson and a few board members insisted that Weinstein should resign. Weinstein refused, with a majority of the board backing him. He could have turned the tables on Thompson and demanded his resignation, but chose not to.

“I thought it was funny that Michael didn’t get mad,” said Cynthia Davis, an AHF board member who watched the attempted coup implode, “because other people would have.”

Gruttaduaria observed something similar.

“Michael kept his chin up,” she said, “and he was very admirable that he didn’t let this person take him down. He was the bigger person.”

But Weinstein took the high road for a very pragmatic reason. Further internal strife could have seriously harmed AHF, and that would have impacted its patients.

“I reassigned him and he decided to leave,” Weinstein explained of Thompson. “You always have to be careful about the collateral damage from coming down on someone, even if it is justified.”

With government systems finally in place to reimburse AHF for purchasing the AIDS cocktail, the organization survived—and changed completely and forever. Rather than comforting the dying, AHF was now giving life as a provider of HIV treatment.

“It tested our mettle,” said Weinstein. “We went from hospice care in one city to eventually treatment for the world. So it shaped our ambitions and our agenda. It falls under the category of whatever doesn’t kill you makes you stronger. It was kind of a crucible—and it weeded out people.”

Read more about AHF in “Righteous Rebels: AIDS Healthcare Foundation’s Crusade to Change the World.” Now available as an e-book and paperback.

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