'Troubling' Turn for Tenet

Still, several of Tenet's Los Angeles hospitals face an ongoing criminal investigation for allegedly paying kickbacks to physicians. Moreover, Tenet hospitals in four other markets face civil probes on supposed kickbacks.

Meanwhile, the entire company remains under fire for allegedly collecting outsized "outlier" payments from Medicare. Wall Street has long estimated that the company could wind up paying more than $1 billion under a global settlement with the government as a result.

But Tenet's huge cash pile -- hit by an earlier legal settlement -- slipped below $1 billion in the latest quarter. Thus, some have started to question whether the company can in fact still fund a global settlement with the cash it has on hand.

Tenet stopped short of making any full-blown promises last week.

"I think that it's important for all parties to recognize that Tenet's financial position has deteriorated in the past year," CEO Trevor Fetter said during last week's quarterly conference call. And "I would only say that our objective is to reach a fair settlement and move on from that fair settlement in a manner in which we have not imperiled the company, in which we have sufficient liquidity for our operations and sufficient capital to invest appropriately in our hospitals. ... (But) I can't give you some prediction as to whether we will meet that objective or not."

Shrinking Company

Skolnick, for one, has started to wonder just how much of Tenet will be left in the end.

After selling dozens of hospitals -- and building just one new one -- Tenet will be left with 68 facilities after the Alvarado transaction. Yet, Skolnick notes, five of those hospitals operate in a tough Philadelphia market that Tenet would probably love to leave. Another five are located in New Orleans, she says, including two that remain closed and three now catering to an increasingly uninsured population.