Here's where investing gets tricky.

I'm pretty confident that Triad Hospitals (NYSE:TRI) will get its act together again -- better admissions, a lower amount of bad debt, stronger cash flow growth -- but I'm not exactly sure when. So that leaves us Fools with a better-than-average company in a sector where many pundits have made ill-fated value calls in the not-too-distant past.

While reported revenue increased nearly 17%, revenue on a same-facility basis was up 7% as adjusted admissions decreased 0.3%. In other less-good news, provisions for doubtful accounts were up nearly 24% and constituted 9.7% of revenue, up from 9.2% last year. Adjusting out the hospital's special discount policy for self-payers, doubtful accounts accounted for 12.8% of revenue. That's a punishing level of bad debt.

I do believe there's a case to be made that this is a hospital company worth watching. The company has a joint-venture strategy that sets it apart from other operators and seems to have a reputation for being physician-friendly. Not only does that give the company the opportunity to buy interest in hospitals that might otherwise not come available, but it might also shield Triad from some of the acrimony that is apparently coming out of cost-cutting efforts at rivals such as HCA (NYSE:HCA).

What's more, while current returns and growth aren't so hot, I do believe there is an opportunity for performance metrics to get better as the company improves operations at existing hospitals and shuffles underperformers out of its portfolio of holdings.

On the other hand, even the more optimistic adjusted and pro forma admissions statistics don't look tremendously strong, and that bad-debt expense is a weight around the company's neck. And in some cases, it really does sound like a Catch-22 -- health insurance companies like UnitedHealth (NYSE:UNH) and WellPoint (NYSE:WLP) want to keep medical costs as low as possible, and that's bad for Triad. What's worse, they keep raising premiums -- which puts more people without health insurance, which in turn increases the odds that people will show up at Triad with no insurance and minimal ability to pay.

I'm sure that this company and stock will be an attractive buy again someday, but I'm just not keen on taking the risks of being early to the story. I'd much rather spend my time looking at the device and drug manufacturers; they're under pricing pressure, too, but at least they know they'll get paid.

For more medical missives:

UnitedHealth is a Motley Fool Stock Advisor recommendation. For more stock recommendations from Fool founders Tom and David Gardner, try Stock Advisor out free for 30 days.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).