The ailing hospital industry just keeps getting sicker. HCA ( HCA), the biggest player in the for-profit group, has slashed its earnings guidance due to a crippling bad debt problem that continues to worsen. Meanwhile, Tenet ( THC) -- HCA's largest competitor -- added two new probes to the long list of investigations already facing the company. Both stocks took immediate hits following Wednesday's news. The losses proved contagious, spreading to other hospital operators such as Triad ( TRI) and Universal ( UHS). Early Wednesday, HCA diagnosed its first quarter as a weak one and gave no hope for an immediate recovery. The company cut its quarterly profit estimate to 69 cents a share -- 7 cents below Wall Street analyst expectations -- and reduced the full-year guidance it had maintained, despite rising bad debt, just two months ago. It now expects to deliver full-year profits of $2.60 to $2.70 a share, down a quarter from the prior range, even after recognizing gains from favorable malpractice developments. The company blamed the shortfall on a surge in uninsured patients who now account for 12% of its net revenue. "As I have commented on many occasions over the past two years, the most significant challenge the hospital industry faces is the growing number of uninsured and underinsured in this country," HCA CEO Jack Bovender stated on Tuesday. "It is time for all sectors of society, both public and private, health care and non-health care, to participate in solving this societal issue."