Naked City

"What 'deal' are they talking about?" City Manager Toby Futrell wondered in response to Monday's Statesman editorial urging the city to accept Seton Healthcare Network's latest offer on Children's Hospital. That editorial informed Austinites that "an agreement is emerging" where Seton would take possession of the city-owned Children's and invest $175 million in a new facility at the old Mueller airport, while continuing to lease and manage city-owned Brackenridge Hospital. The offer would include a $50 million penalty against Seton if it walked on its Brack lease -- which has 23 years to go -- and a similar penalty against the city if it severed its ties with Seton. "Austin City Council members should take the deal," the editorial implored.

"There is no deal on the table," Futrell said. "We are in the very early stages of discussion right now." The $50 million has since changed to another number, she said, but she wouldn't specify the amount. "Those numbers are going to change every day of negotiation," she said. On the plus side, Futrell said she is happy that Seton has backed off of its original plan to build a new Children's in far North Austin. "We've got some very good discussions going now. We're talking openly for the first time [in months], and that's very encouraging."

Not everyone is equally encouraged. Public health care advocates fear that city officials may become so focused on keeping Children's in Central Austin that they will relinquish public ownership without putting up a fight. Travis Co. Probate Judge Guy Herman has put his concerns in writing in a letter to City Council members, as has Jack Gray, who serves with Herman on a proposed hospital-district steering committee.

Council Member Daryl Slusher says he shares similar concerns. "They've raised some of the same points that I've been raising," he said, referring to questions about how these trade-offs would benefit the city. Further, he said that while he wants Children's to remain centrally located, he's not yet ready to settle on the Mueller site.

Herman, for his part, told the Chronicle that the city needs more information from Seton before striking a deal. "The city should insist on full financial disclosure regarding the business operations of [both] Children's Hospital and the rest of Brackenridge Hospital," he said. "Then, and only then, should there be any discussions of amending the lease ... or selling the profitable parts of Brackenridge Hospital to Seton."