Texas Children’s to Expand to Austin with Clinics

Texas Children’s Hospital is expanding to Austin with an extensive outpatient network that would be the latest extension of its brand beyond the Texas Medical Center.

The elite Houston hospital plans over the next five years to open four pediatric urgent-care clinics, three pediatric specialty-care clinics, 18 pediatric primary-care practices and two maternal-fetal medicine practices, leaders said Wednesday. The first to open will be an urgent-care clinic in south Austin next spring.

“This expansion reflects both an opportunity and a need,” said Dr. Mark Kline, Texas Children’s physician-in-chief. “It’ll be an entrance into a market where we haven’t had a presence and a benefit to Austin of our integrated and wholistic pediatric-care model that we think is second to none.”

Texas Children’s, a Texas Medical Center institution for 63 years, has expanded across both greater Houston and the state since the mid-1990s. It also has pediatric HIV/AIDS clinics in numerous countries in the developing world.

Kline said leaders are “open to the possibility” of building a Texas Children’s hospital in Austin, but he insisted there are no current plans. He said a hospital would occur “after we’ve implemented this five-year plan.” In the meantime, the plan is to start with the outpatient strategy and “reassess as we go.”

Austin’s pediatric in-patient needs are currently served by Dell Children’s Medical Center of Central Texas, a well-regarded but smaller hospital owned by the Seton Healthcare Family and affiliated with the University of Texas-Austin’s new medical school. The hospital, now 10 years old, is licensed for 248 beds and boasts the only Level 1 pediatric trauma center in the central part of the state.

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Dell’s leaders Wednesday seemed in the dark about Texas Children’s plans.

“Having just been notified about the plans, we look forward to gaining a better understanding of them,” chief of external and academic affairs Greg Hartman said in a statement. “Seton and Dell continually seek to improve health care in our community, and we hope Texas Children’s will also commit to better care for our youngest patients and their families – care that’s based here in Austin, and stays here in Austin.”

Kline said Texas Children’s would be “excellent partners” and predicted a “symbiotic relationship.” He said its doctors will bring patients needing hospitalization to Dell under the Austin hospital’s policy granting admitting privileges to both academic and private practice doctors.

Vivian Ho, a health economics expert at Rice University’s Baker Institute for Public Policy, said the key question over time will be how many such patients will be admitted to Dell and how many will be taken to Texas Children’s main campus in Houston.

Texas Children’s officials gave no dollar figure for the Austin project. They said they still aren’t sure about exact locations, where they’ll build and where they’ll lease and what specialties they’ll feature.

Kevin Holloran, a Texas-based analyst with Fitch Ratings, called the move “an inexpensive way to test the market.”

“This is a lot different than moving to The Woodlands, a straight shot up the road, where everyone knows the brand name, you’ve got physicians and a known marketplace,” said Holloran. “Austin’s not just 150 miles away, it’s a college town and a state capital, a different culture. It behooves Texas Children’s to go in with baby steps.”

Holloran said Texas Children’s might see an opportunity to identify children who need their high-end care or they might be trying to determine if there’s a potential market for another pediatric hospital in Austin.

Holloran said it would be “an unusual move” if Texas Children’s ultimately opts to build a hospital where there’s already an established pediatric facility. He said it’s not common for pediatric hospitals to “go head to head.”

Previous Texas Children’s ventures around the state include a cancer and hematology clinic in McAllen that opened in 2001; a partnership with Scott & White Healthcare in Temple that was signed in 2011; and a collaboration with Children’s Hospital of San Antonio that began providing it doctors in 2013.

Outside the Medical Center but within greater Houston, Texas Children’s opened a West Campus hospital at Interstate 10 and Barker Cypress in 2011 and a hospital in The Woodlands in April.

Texas Children’s Pediatrics, now the nation’s largest primary-care network for pediatric doctors, was established in 1995, and the hospital’s first urgent care clinic in Houston was opened in 2014. Texas now has eight such clinics scattered around Houston.

Kline said those practices and clinics will serve as a model for what Texas Children’s plans to take to Austin.

“On a smaller scale, we just plan to do in Austin what we’ve done in Houston, a distributed health-care model of primary care, specialty care and urgent care,” Kline said. “We think we can do it to the benefit of children and families in Austin.”

He said the site of the first urgent-care clinic is still being negotiated but will be on the city’s south side, not the more affluent north and northwest.

With 639 licensed beds, Texas Children’s Hospital in the Medical Center is the nation’s largest pediatric hospital. It is staffed by Baylor College of Medicine doctors and has consistently ranked No. 4 in U.S. News & World Report’s annual survey of pediatric hospitals in recent years.

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