Tenet ( THC) is gambling on a rebound in New Orleans.

Three years into a major losing streak, the giant hospital chain is making a big bet on the future of the devastated city. The company announced plans on Monday to invest "hundreds of millions of dollars" in its New Orleans healthcare network following the massive flood damage caused by Hurricane Katrina.

Two of the company's New Orleans hospitals -- including one where dozens of patients died in the aftermath of the storm -- remain closed and face an unclear future. The other three are "gradually returning to service," the company said.

"Research shows that, over time, at least a majority of New Orleans' population is expected to return," Tenet CEO Trevor Fetter explained on Monday. So "Tenet will rebuild and restore where we can. We will construct new facilities where we need to. And we will give New Orleans a locally-focused network that will be essential to meet the community's healthcare in the years ahead."

The company expects insurance settlements to cover a "significant portion" of that effort.

Even so, some view the move as a risky one. For starters, they note, Tenet has pledged to make its investment at an especially tough time for the hospital sector. In fact, Tenet announced its plans the very day that Triad ( TRI), a much healthier hospital company, disappointed investors with news of declining patient volumes and rising bad debts from the uninsured. Triad slumped 3.9% to $42.23 on that quarterly report.

Tenet faces bigger challenges than most. Notably, the company remains under investigation by multiple government agencies and continues to lose money.

Tenet's stock, once a $50 highflier, fell 23 cents to $8.89 on Monday, marking its first dip below $9 in more than a decade.

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