ILocated in Houston, Texas, the Institute for Immunological Disorders was the first hospital in the nation dedicated exclusively to the treatment and study of Acquired Immune Deficiency Syndrome (AIDS). Formed through a partnership of the University of Texas M. D. Anderson Hospital (MDAH) and the for-profit hospital network of American Medical International, Inc. (AMI), the Institute for Immunological Disorders (IID) was designed to fill a gap in AIDS research by providing a large, centralized patient population and facilities to study pharmaceutical and other types of treatments for the disease. The research and care of the patients was the purview of University of Texas medical staff, while building maintenance and support staff were supplied by AMI.
The Institute was open from September 2, 1986, to December 11, 1987. The partnership between an academic program and a for-profit facility was unique but became a major factor in the institute’s demise. IID’s brief period of operation was due in part to a number of complex problems, including politics and controversy surrounding the AIDS epidemic, but one of the most pressing issues was money. AMI expected a large amount of patients diagnosed with AIDS to be sent to IID over other area hospitals and that the profits gained from IID would be akin to a full hospital of AIDS patients undergoing treatment. In reality, IID functioned primarily as an outpatient facility, which significantly limited its profit margin. During its operation, the Institute treated approximately 750 patients.
MDAH and AMI formed the Institute for Immunological Disorders in 1986. MDAH had been treating AIDS patients for several years by then; the first case of AIDS in Houston was discovered in 1981. Many AIDS patients were initially treated at M. D. Anderson’s Cancer Center because they showed symptoms of Kaposi’s Sarcoma, a very rare type of cancer. To address the growing epidemic, MDAH created an AIDS program in 1982. Its director was Dr. Peter Mansell, who, in his former position as associate director of cancer prevention at MDAH, was among the first medical personnel to encounter AIDS in Houston. From 1982 to 1986 the MDAH AIDS program saw more than 1,000 referrals. AIDS patients overwhelmed the intensive care unit at MDAH and spilled over into regular hospital rooms. MDAH needed greater space and funds in order to more effectively treat AIDS patients.
In 1985 the for-profit hospital network American Medical International, Inc., approached the University of Texas Medical System, which oversaw MDAH, with an offer for a partnership. AMI had plans for a medical facility focused exclusively on AIDS, which had been presented to them earlier that year by Dan Moreschi, director of nursing at AMI’s Katy Community Hospital. The plan, written by Moreschi and Ted R. Hewes, a Houston psychotherapist who worked with AIDS victims, described a facility focused on both care and on-site research. The intent was for patients to receive the most effective treatments for AIDS as soon as those treatments were discovered. At this time, AMI had already seen profits from the care of AIDS patients in their hospitals and was eager to explore Moreschi’s and Hewes’s idea. The kind of facility detailed in the plans, one focused on cutting-edge research and treatment for AIDS, required access to experimental drugs only available to academic institutions. This necessitated AMI’s partnership with University of Texas. Despite the expectation of an expensive initial investment, AMI anticipated no difficulty in recouping costs and turning a profit, while simultaneously elevating their company profile as the one of first health care corporations to respond to the AIDS crisis.
Negotiations over the terms of the partnership between AMI and the University of Texas took just over a year. AMI agreed to supply the building, facilities, and support staff, including Moreschi. MDAH would supply the medical and research staff, as well as access to experimental drugs. During the negotiations, MDAH’s AIDS program applied for and won a $5.8 million contract from the National Institute for Allergy and Infectious Diseases (NIAID) to conduct research and provide treatment to AIDS patients. Under the grant agreement, MDAH’s AIDS clinic would move to a separate hospital complex dedicated solely to the AIDS program. The grant did not cover the costs of facilities and non-medical personnel, which further necessitated the partnership between MDAH and AMI. With the NIAID grant and AMI’s support, MDAH had the resources to expand their AIDS clinic and move forward with continuing AIDS research. The result of these combined resources was the establishment of the Institute of Immunological Disorders (IID).
IID opened in September 1986 at 7407 North Freeway in the Acres Homes community in Houston. Its operations were housed in the former Citizens General Hospital, a medical complex owned by AMI and renovated for the use of IID. The location sparked controversy; residents of Acres Homes were fearful of the presence of an AIDS hospital in their area, and IID was approximately fifteen miles away from Montrose, the community hit hardest by the AIDS outbreak. Mansell was appointed to be IID’s medical director and worked alongside Moreschi, who was appointed by AMI to be director of development. AIDS research was headed by Dr. Adan Rios, director of clinical research, and overseen in the laboratory by Dr. Jose Trujillo. In addition to doctors of traditional medicine, MDAH formed a social services department at IID to address patients’ mental and psychological wellbeing; this department was directed by Sue Cooper.
In order to develop a large pool of patients for clinical trials and per the philosophy of MDAH, all patients were accepted at IID regardless of their ability to pay for treatment. MDAH preferred to provide care on an outpatient basis unless it was medically necessary to admit a patient to a hospital room. Due in part to this practice, the ICU at the Institute was never used. Mansell and Sue Cooper organized a team that included physicians, nurses, nutritionists, physical therapists, and psychologists to treat AIDS patients at home until death.
The IID model of treatment led to financial losses for AMI early in its operation. AMI’s expectations for profits were based on average costs for in-house treatment of AIDS patients over an extended hospital stay, possibly for the remainder of the patients’ lives. (With no cure or effective treatment method for AIDS victims in the late 1980s, diagnosis with the disease was usually a death sentence.) IID focused on outpatient care when possible, which cost significantly less than in-house treatment. AMI’s finances were also strained by the number of indigent patients that came to IID for care; about half of IID’s patients were impoverished. Some IID staff suspected that doctors at other hospitals accepted only AIDS patients with insurance and sent the poor to IID or waited until patients ran out of money to then “dump” them on IID. By mid-March 1987 AMI had spent $2.5 million on indigent care, when they had budgeted $250,000 for the entire year.Stipulations in grant funding contracts did not give express permission for AMI to use grant rewards to cover any of the general operating expenses (indirect costs) of IID.
Due to financial strains, AMI announced in March 1987 that no more indigent patients would be enrolled into care at IID; one month later, AMI laid off twenty-six IID employees. In August AMI announced the impending closure of the Institute and cited operating losses of more than $8 million among the causes. Mansell and his team attempted to move to a different facility in order to continue AIDS research and treatment, but no other medical complexes were interested in providing the necessary space for patients and staff. Without a physical location, Mansell’s team was not able to guarantee the required number of patients needed to conduct drug trials. Since research and clinical trials could not continue, more than $4 million in grant money was returned to the National Institute for Allergy and Infectious Diseases. The 450 patients enrolled in care at IID were referred for treatment to different medical institutions by IID’s Social Services Department. Patients with insurance were sent to private hospitals and physicians; those without were referred to the Harris County Hospital District.