Tower Health had a $14 million operating loss in the first quarter of fiscal 2025

Tower Health had a $14 million operating loss in the first quarter of fiscal 2025, the Berks County health system told investors last week. That was an improvement compared to a $19 million loss in the same period last year.

The nonprofit’s hospitals in Chester and Montgomery Counties, however, had weaker results. Phoenixville and Pottstown Hospitals had a combined operating loss of $15.5 million in the three months ended Sept. 30, compared to a $12.4 million operating loss a year ago.

Anchored by the profitable Reading Hospital in West Reading, Tower also owns St. Christopher’s Hospital for Children in North Philadelphia in a 50-50 joint venture with Drexel University.

Revenue: Tower’s total revenue in the quarter increased 5% to $479.8 million from $457.4 million, despite declines in overall inpatient admissions and inpatient surgeries. The number of outpatient surgeries jumped 10%, helping to offset the inpatient drop.

Expenses: Two types of expenses soared at Tower Health in the first quarter. Supplies climbed 30.6%, to nearly $100 million from $76 million the year before. The cost of purchased services jumped 39.7%, to $68 million from $49 million. Over the summer, Tower moved 650 employees to an outside company that works with patients’ insurance companies to collect payments in a move designed to increase revenue

Notable: Tower Behavioral Health, a joint venture between Tower and Acadia Healthcare, plans to add a new two-story building on its campus a few miles north of Ready that will expand facility’s inpatient capacity by 37 beds, bring the total to 181, Tower said. It did not disclose the cost.

Tower stopped breaking out financial results for St. Chris last year even though it manages the facility. That makes it harder to track the financial status of the safety-net facility that serves thousands of poor Philadelphia residents.

Drexel shared in its audited financial statement for fiscal 2024, published last week, that St. Chris had a $7.2 million operating loss in the 12 months through June, after posting a small operating profit of $500,000 the year before.