Taxable or tax-exempt? When taxable financing is the better way

This article has tried to demonstrate that (depending on loan terms and repayment provisions) a lower interest rate may not automatically guarantee a lower financing cost. And the flexibility of loan provisions (and conversely the restrictions placed on hospital management) must be carefully considered to ensure that the hospital can readily adapt to basic changes in the delivery systems and payment mechanisms of health care. This article has used both tax-exempt and taxable financings . Hospitals should undertake a thorough evaluation of all financing aspects and alternatives before commitments are made that may have far-reaching consequences on future hospital operations and hospital viability. There is a place both for tax-exempt and taxable financing--each institution must carefully evaluate which best meets its particular needs.