(FORTUNE Magazine) – If an ounce of prevention is worth a pound of cure, perhaps investors should take a closer look at hospital companies. Over the past six months, these stocks have been on a tear--Triad Hospitals, for instance, is up a whopping 58% from its spring lows due to optimism that the Medicare bill and the bad flu season will help earnings.

But John Souter and David Haushalter, the health-care analyst and accounting analyst, respectively, at Susquehanna Financial Group, a research and trading firm outside Philadelphia, are more cautious. They think the Street is overestimating earnings because hospitals are underestimating the amount of bad debt they'll have.

The problem, in short, is us. Thanks to increases in co-pays and deductibles, among other things, individuals will be responsible for a growing percentage of health-care expenditures in the coming years. That reduces the amount of guaranteed payments to hospitals and increases their exposure to people who don't pay their bills. Towers Perrin estimates a double-digit increase in out-of-pocket expenses in 2004 alone. And so-called self-pay is already the primary source of bad debt for hospitals. Souter estimates that, on average, every percentage point increase in a hospital's amount of self-pay leads to a 60-basis-point increase in bad debt.

Indeed, bad debt has been rising at many hospitals. Triad has steadily increased its guidance to 10% of revenues; last quarter, Tenet said bad debt was more than 10% of revenues, vs. 7% a few years ago.

Not all hospitals have equal exposure to the bad-debt flu. Souter and Haushalter think Province Healthcare, for example, is likely to escape unscathed due to its low levels of self-pay. But because Universal Health Services has decreased its estimate for covering doubtful accounts over the past few years, its defenses may be down.