Hospital Financing 101


Texas hospitals strive to provide the best care to their patients and meet the health care needs of their communities 24 hours a day, 7 days a week, 365 days a year. Fair, stable and adequate payment is key to meeting this mission. Hospitals operate under unique economic, legal and regulatory circumstances. They need revenue to provide necessary health care services, but payment often fails to cover the full cost of care provided. And, by law, they must treat anyone who seeks care in their emergency departments, regardless of a patient’s insurance status or ability to pay.

With a growing aging population and advances in medical science, hospitals will remain an essential part of communities’ infrastructure. Understanding hospital financing is a key part of being an advocate not only for Texas hospitals but for patients as well. The Texas Hospital Association’s educational series on hospital financing breaks down the complex ways in which hospitals are paid.


Hospital Payment Sources

This document provides an overview of the major sources of hospital payments and why reimbursement often is insufficient.

Graduate Medical Education

This whitepaper explains the importance of continued state and federal investment in physician training and provides an overview of the sources and limits of their investment. 

Rural Hospital Financing

This document, the fourth in the Texas Hospital Association’s series on hospital financing, examines the special financing arrangements in Medicaid and Medicare that target the unique needs and vulnerabilities of rural hospitals.

Value Based Payment

This whitepaper discusses the challenges and opportunities Texas hospitals experience to navigate state and federal requirements for specific value-based payment models.

Local Provider Participation Funds in Texas

The local provider participation fund resource shows where LPPFs currently exist and the state legislation that authorizes them. Local hospital districts created LPPFs as a way to provide the non-federal share of Medicaid payments.