The Texas Health Institute was created in 1964 as the Texas Hospital Education and Research Foundation. Throughout its existence, the nonprofit 5.01(c)(3) Institute has addressed significant health care policy issues.

In 1996, the leadership of the foundation recognized that fundamental changes were occurring in how health care is delivered. Mergers and acquisitions to form systems of hospitals have created unanticipated administrative and policy questions, as well as unintended consequences. Linkages with physicians and development of managed care organizations by hospitals/health systems have created new policy questions that challenge traditional technology needs and complicate regulatory oversight. The transition to community-focused care and the implementation of meaningful outcome/quality measurements bring long-established ethical practices and values into question. Every community is unique, so a single delivery system design will not adequately meet diverse needs. Research to understand and evaluate the new operating environment is needed to provide direction to move beyond managing costs to focusing on outcomes and real improvement in community health status.

In 1997, the board of directors of the Institute approved a strategic plan for the newly named and reorganized organization. With its research, education and policy development, the Institute provides leadership in improving the health of Texans through community driven and community focused efforts.