The article explores the relationship between the cost and the quality of hospital care by elaborating a conceptual model of hospital performance. The model relates the financial health status of an organization (financial integrity) to the quality of care provided by that organization (clinical integrity) within an environment that is characterized by various forms of risk. The model suggests that both concepts determine the corporate destiny (success, bankruptcy, or merger) of the organization. If this model proves valid empirically, the results could be used as an early warning system to identify hospitals that might experience financial or clinical distress.