Tower Health’s cash reserves fell by $54 million over the summer
Tower, which owns Phoenixville and Pottstown Hospitals, highlighted reduced operating losses.
Tower Health reported a smaller operating loss over the summer, compared to last year, but its cash reserves continued a yearslong decline. Tower had $154 million in unrestricted cash on Sept. 30, down $54 million from June 30.
The nonprofit health system, anchored by Reading Hospital in West Reading, Pa., said the cash position worsened over the summer largely because September had three paydays compared to two in a typical month. This added an extra $35 million to the costs reported.
The $154 million amounts to 30 days of expenses for Tower.
“We anticipate an improvement in days cash on hand by the end of the fiscal year,” Tower said in an emailed statement.
Tower’s operating loss in the quarter that ended Sept. 30 was $19.1 million, compared to $37.6 million last year. But Tower was profitable on a cash basis, even though it didn’t receive any federal COVID-19 aid in the quarter.
Bottom line bolstered by sales of medical facilities
Revenue fell to $457.4 million from $471.2 million last year, which included $29.3 million in revenue from Chestnut Hill Hospital. Tower sold the Philadelphia hospital on Jan. 1.
Excluding Chestnut Hill, Tower reported a 1.9% increase in hospital admissions, a 3.4% increase in inpatient surgeries, and a 1.9% decrease in outpatient surgeries.
On Oct. 1, Tower sold eight urgent-care centers to American Family Care, but did not disclose the price. It also closed nine centers, leaving it nine others in areas its hospitals serve. Tower expects to save money by selling and closing those facilities.
In an acquisition run under former CEO Clint Matthews, Tower in 2018 paid $24 million for a chain of 19 urgent-care centers, some of which were outside Tower’s market. Matthews left in February 2021.
Another move that could help Tower save money is the pending sale of Brandywine Hospital, near Coatesville, to the University of Pennsylvania Health System. If that sale closes, Tower will own two of the five hospitals it bought in 2017 from Community Health Systems Inc. for $423 million. The remaining hospitals are Phoenixville and Pottstown.
Penn officials have said they do not intend to reopen Brandywine’s inpatient beds, but would like to create a freestanding emergency department, which would require the passage of new state legislation.
Under a tentative plan, Penn would lease part of the building to the U.S. Department of Veterans Affairs as a replacement for the nearby VA medical center.