When Fred Walters, president of Expert Nutrition, first learned three years ago that his nonprofit was going to receive a medical and nutritional therapy contract from the Ryan White Grant Administration, it was a dream come true.
Walters founded the organization, which was then known as the Houston Buyer’s Club, to help HIV-positive people get the best nutritional supplements available at lower prices than they might find elsewhere. The $352,000 Ryan White contract gave HIV-positive program members a place to go to receive the care they needed, and allowed Expert Nutrition to add services to its retail component.
Since then, however, the program has ended up costing Expert Nutrition thousands of dollars every month, angered customers, and endangered its core retail business.
The story began happily enough, as Expert Nutrition was able to offer people with HIV and those on HIV medications better care than they could get at other low-cost clinics or nonprofits.
“We were overjoyed to get the contract because our clients would finally have something they deserved, which was choice,” Walters said. “If they needed a protein powder to maintain their muscle mass, there was only one they could get from their provider. Now they get a choice of 50 different proteins.”
That choice allowed lactose- and soy-intolerant clients to find a powder that worked best for them. Likewise, they could receive the vitamins and nutritional counseling they needed for side effects of their HIV-suppressing drug regimen, such as lipodystrophy, which causes a loss of body fat.
The program was well received when it began, and once nutrition counseling was added 18 months ago, Expert Nutrition’s program base began to swell. It now serves 900 clients, and the program even began outreach into six rural sites.
“We received a tidal wave of people coming in,” Walters said. “We got 253 more than expected, and we had to hire three-and-a-half full-time registered dieticians to meet the need.”
But the cost of maintaining services for hundreds of clients strained the store’s inventory as well as its coffers, partly because the contract was designed for healthcare centers that were Medicare providers. The nutritionists, for example, are paid at the standard market rate of $180 an hour, and each patient meets with them several times a year; each consultation takes about two hours to complete.
“What we found out, after the fact, was that this program was designed to be part of the services offered by primary medical care clinics that could bill Medicaid and Medicare the $180,” Walters said.
Instead, Expert Nutrition is only reimbursed $60. Although Walters tried to accommodate the program’s needs by seeking outside funding, fewer donations are coming in to distribute to needy organizations.
“We knew we would have to raise money to keep this thing going,” he said. “We saw it coming. But some of the grants didn’t come in, and they gave less than we requested or nothing at all.”
The program now costs Expert Nutrition $90,000 per year to run, which is unsustainable for a nonprofit that must maintain its store inventory by paying for products in advance. The store must then wait for two months to be reimbursed by the Ryan White program.
“It was robbing our store of inventory, so when paying customers were coming in to buy, there was nothing there,” Walters said. “We were subsidizing our nutrition counseling program from our sales.”
After considering the impact to its core business, Walters and the Expert Nutrition board have since decided to discontinue its Ryan White contract. They will lay off its nutritionists and end its nutrition program in order to renew its focus on providing an extensive inventory for its paying customers. The store will also offer nutritional workshops, lectures, and limited programs.
“We’re going to continue the store that started everything, and bounce back from this,” Walters said. “We’re going to get back to educational lectures, which we didn’t pursue grants for.
“We’ll be able to carry a whole lot more than we do now, and keep inventory levels stable,” he added.
The organization is also establishing a “website superstore,” with more than 5,000 different products at low prices, and customers can sign up for a $150 nutrition counseling session that would typically cost $200. The store’s space will also be available to nutrition and health-related groups who want to use it after hours.
The goal, Walters said, is to serve the customers who helped to make Expert Nutrition the largest nonprofit of its kind in the country.
“Our focus is about improving the quality of life for our customers,” he said. “We couldn’t do the Ryan White program, but there’s a lot of other things we can do, and we want to do that for people.”