Tower Health names Michael Stern CEO, succeeding Sue Perrotty, who took over during crisis
Tower's current president and chief operating officer will take over as CEO in February.
Tower Health’s president and chief operating officer Michael Stern will succeed P. Sue Perrotty as CEO of the Berks County health system in February, the nonprofit said Wednesday.
Perrotty moved into the CEO position close to four years ago at a time of deep financial distress at Tower and after the ouster of her predecessor, Clint Matthews. She will return to serving on the board of directors.
“I wasn’t expecting to take on this role four years ago, but I’m glad I did,” Perrotty said in a news release. “While I was tasked with helping to restore financial stability, I am equally proud of how our clinical quality has never wavered.”
Stern has been at Tower since September 2022 and was promoted to president this year. He joined Tower from MetroHealth System, a public health system in Cleveland, where he had been COO of the hospital division.
When Perrotty took over, Tower was reeling from massive losses after its more than $400 million acquisition in 2017 of five hospitals in Southeastern Pennsylvania. The deal was part of Tower’s plan to compete with Philadelphia’s academic medical centers by drawing patients from Chester and Montgomery Counties for advanced care at Tower’s flagship, Reading Hospital.
Tower has since closed Brandywine and Jennersville Hospitals in Chester County, and sold Chestnut Hill Hospital in Philadelphia to a partnership led by Temple University Health System. It still runs Phoenixville and Pottstown Hospitals, which are closer to its Berks County base. It also still owns St. Christopher’s Hospital for Children in a 50-50 joint venture with Drexel University.
In a bid for financial relief from debt repayments that were supposed to start in February, Tower refinanced $1.2 billion in bond debt in October. The deal included new debt that is supposed to increase Tower’s cash cushion, which effectively gave the four-hospital system five years to nurse itself back to financial health.
Tower’s operating loss in the year ended June 30 was $27 million, down sharply from a $193 million loss the year before. In the first quarter of fiscal 2025, Tower had an operating loss of $14 million, compared to $19 million in the same period a year ago.