The company you keep: spreading effects of financial fraud on investor trust

Investor trust is valuable to health care organizations. Without it, they may face higher capital costs. This study explores recent cases of fraud and the appearance of impropriety by health care organizations, focusing on the manners in which trust was violated, the systems that allowed those violations, and the effects on financial markets. Increases in the incidence and scale of such transgressions may be harbingers of worse times ahead. This article examines how recent events have affected the cost of capital, and what health care organizations can do to avoid being judged by the company they keep.