Tower Health finds new owner for Jennersville and Brandywine Hospitals
A health-care turnaround firm is slated to take over the two money-losing facilities on Jan. 1.
Tower Health’s Brandywine and Jennersville Hospitals in Chester County have gotten a reprieve.
The Berks County nonprofit announced Monday that Canyon Atlantic Partners LLC, a hospital management firm based in Austin, Texas, will take over as owner of the two facilities on Jan. 1 and keep them open as acute-care hospitals. Terms of the transaction were not disclosed.
Jennersvile was slated to close on that date, and Brandywine was on the bubble as to whether it would remain open, as Tower sheds assets in a bid to rebound from massive financial losses caused by a rapid, debt-fueled expansion from its core market around Reading into Southeastern Pennsylvania.
» READ MORE: The fate of Brandywine and Jennersville Hospitals has been a worry in Chester County for a year (from December 2020)
“This transfer of ownership will ensure continued, convenient access to care for the Jennersville and Brandywine communities. It will also further advance Tower Health’s financial and operational turnaround, positioning us to deliver on our mission well into the future,” said Tom Work, chair of Tower’s board of directors.
Typically when nonprofit assets like Brandywine and Jennersville are sold to a for-profit company, the state Attorney General reviews the transaction. It’s not clear if that’s possible by Jan. 1. Tower did not respond to a question about that timing.
Tower recently recorded a $370.7 million write-down of the urgent care centers and hospitals it acquired from 2017 through 2019 for nearly $500 million. Tower said in September that it was in talks to sell most of its urgent care centers as well as Chestnut Hill Hospital to Trinity Health Mid-Atlantic.
If Tower completes the announced transactions, it will be left with its flagship Reading Hospital in West Reading, plus smaller hospitals in Phoenixville and Pottstown. It also owns St. Christopher’s Hospital for Children in Philadelphia through a joint venture with Drexel University. Work has been underway for months to find a new ownership arrangement for that safety-net hospital.
Canyon Atlantic is led by for-profit health-care veterans, with David Kreye as chief executive and Michael Zwetschkenbaum as chief financial officer. Zwetschkenbaum’s LinkedIn profile says he served as CFO at Pottstown Hospital from 2008 to 2013.
Canyon officials were no available for comment.
The company’s web site does not list other hospitals it owns or manages. A September lawsuit by an investor identified Kreye as CEO of a company, Canyon Atlantic-Texas LLC, that was at least partial owner of Plano Surgical Hospital, in Plano, Texas.
Brandywine and Jennersville will offer a test for Kreye’s and Zwetchkenbaum’s turnaround skills.
The two hospitals had a combined operating loss of $42 million on revenue of $124 million in the fiscal year ended in June. Brandywine employs 543. The employee count at Jennersville is 267, down from 317 when Tower announced its intention to close the facility eight weeks ago.
Tower’s total operating loss for the year was $614 million, including the $370 million write-down, on $2.2 billion in revenue.
Brandywine is licensed for 171 beds, Jennersville for 63. The hospitals accounted for 9 percent of Tower’s inpatient admissions in the three months ended June 30.