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Tower Health reported a $16 million operating loss in the first six months of fiscal 2025

The results are the last with P. Sue Perrotty as CEO. She is retiring after four years.

Tower Health owns Phoenixville Hospital, which it acquired in 2017 in a five-hospital deal as part of an expansion from its Berks County base into the Philadelphia market. It has sold or closed three of the five hospitals. Pottstown Hospital is another that remains open.
Tower Health owns Phoenixville Hospital, which it acquired in 2017 in a five-hospital deal as part of an expansion from its Berks County base into the Philadelphia market. It has sold or closed three of the five hospitals. Pottstown Hospital is another that remains open.Read moreTower Health

Tower Health had a $16.1 million operating loss in the six months that ended Dec. 31, compared to a $16.6 million loss in the same period the year before, the Berks County nonprofit health system told municipal bond investors Friday. In the earlier period, Tower’s loss would have been $36 million without the benefit of a $19.5 million gain from a settlement involving a federal drug discount program.

The second-quarter report for fiscal 2025 is Tower’s last with P. Sue Perrotty as CEO. Her last day is Feb. 23, though she will stay on Tower’s board and on the board of St. Christopher’s Hospital for Children in Philadelphia, which Tower owns in a 50-50 joint venture with Drexel University. Perrotty’s successor is Michael Stern, who joined Tower in 2022 as chief operating officer.

Here are details from the latest financial report:

Revenue: Tower’s total revenue for the first half of fiscal 2025 was $988.6 million, up 3.4% from $956 million in the same period the year before. Among Tower’s three wholly-owned hospitals, Phoenixville had the biggest revenue gain, at 9%. Revenue at Reading Hospital in West Reading was up 3%, while Pottstown Hospital had a 7% revenue decline.

Patient activity: Tower, which has 1,060 beds, saw a 2.9% decline in inpatient stays at its hospitals (the results do not include St. Christopher’s Hospital for Children). Emergency department visits totaled 81,245, down 2.7% from 83,510 the year before. The health system had strong gains in outpatient surgeries, which is a trend across the industry as fewer procedures require stays in the hospital.

Cash reserves: The amount of cash Tower had in reserve to pay for day-to-day operations fell to $205 million on Dec. 31, down from $220 million on Sept. 30. That translated to enough cash for 39 days at the end of the year, compared to 43 days three months earlier. Days cash on hand is a closely-watched gauge of financial health. Many health systems have 200 days of cash.