Tower Health to Lay Off 350 Employees, Reducing Workforce by 3%, and Implement Service Cuts at Pottstown Hospital.
Tower Health has announced the elimination of approximately 350 positions, representing around 3% of its total workforce, as the nonprofit healthcare organization grapples with significant financial challenges within the industry. The decision, disclosed on Friday, has raised concerns regarding the continuity of healthcare services in the affected communities, particularly in Pottstown, Pennsylvania.
The majority of these job reductions will affect administrative roles; however, the changes will also impact medical services at Pottstown Hospital. The organization will close its combined intensive care and critical care unit, along with the Pottstown location of the McGlinn Cancer Institute and its endoscopy center. Tower Health CEO Michael Stern indicated that these measures stem from a comprehensive review of the organization’s finances and patient volumes, necessitating adjustments to operational strategies.
Despite the cutbacks in Pottstown, Stern emphasized that nearly all services impacted would be available at alternative sites within the Tower Health network, ensuring that community access to crucial healthcare resources remains intact.
Tower Health operates several facilities, including Reading Hospital in West Reading and Phoenixville Hospital, as well as a partnership with Drexel University for St. Christopher’s Hospital for Children in Philadelphia. Following the layoffs, Pottstown Hospital will retain a workforce of approximately 700 employees, down from pre-layoff numbers. Notably, the layoffs include around 60 registered nurses and will take effect on January 16, 2024, as communicated in a letter to the local nursing union.
The Pennsylvania Association of Staff Nurses and Allied Professionals (PASNAP) has expressed strong opposition to the service cuts and layoffs, labeling them as detrimental to healthcare access during a critical time. The union’s president has conveyed concern over the implications for healthcare disparities, travel burdens for patients, and the emotional toll on healthcare providers and families.
The closure of services at Pottstown Hospital comes after Tower Health’s recent legal victory in securing a property tax exemption from the Pennsylvania Supreme Court, which saved the organization over million. This judgment highlighted the competitive nature of executive compensation within nonprofit entities as they seek to attract talent in an increasingly complex healthcare landscape.
In funding news, Tower Health reported a narrow operating gain of .9 million for the fiscal year ending June 30, 2023, a figure that included proceeds from the sale of the now-closed Brandywine Hospital campus. Without this infusion, the organization would have faced an eighth consecutive year of operational losses, totaling approximately .8 billion since it acquired five community hospitals in 2017.
As Tower Health prepares to disclose its financial results for the third quarter of 2023, the organization faces continued scrutiny regarding its long-term sustainability and service delivery amid ongoing challenges in the healthcare sector.
