Tower Health to lay off 350 employees, representing 3% of its workforce, and will implement service reductions at Pottstown Hospital.

Tower Health, a nonprofit healthcare organization based in Berks County, recently announced a workforce reduction involving approximately 350 employees, which constitutes around 3% of its total staff. This strategic decision arises amidst significant financial challenges besetting the healthcare sector. The organization revealed the layoffs in a communication to its workforce on Friday.

While many job losses will occur within administrative divisions, notable cuts will also affect Pottstown Hospital in Montgomery County. This facility will see the discontinuation of several medical services, including the closure of its combined intensive care and critical care unit, the Pottstown branch of the McGlinn Cancer Institute, and the endoscopy center. These changes reflect a comprehensive financial analysis and review of patient care volumes, as stated by Tower Health’s CEO, Michael Stern.

In his communication, Stern emphasized that while some services are being discontinued at Pottstown, virtually all affected services will remain available across other facilities in the Tower Health network, ensuring continued access to high-quality medical care for the community.

Tower Health operates several hospitals including Reading Hospital in West Reading and Phoenixville Hospital in Chester County. Additionally, it has a joint venture with Drexel University that operates St. Christopher’s Hospital for Children in Philadelphia.

The impending layoffs will impact a wide range of staff members, including 131 positions at Pottstown Hospital, with a significant number comprising nurses affiliated with the Pennsylvania Association of Staff Nurses & Allied Professionals. Among those laid off are approximately 60 registered nurses, with the layoffs scheduled to take effect on January 16. The critical care unit, which has 12 staffed beds, is just one of the affected services, although radiation oncology will continue despite the closure of the cancer infusion center at Pottstown.

This latest development is set against the backdrop of Tower Health’s complicated financial landscape. Earlier this year, the organization achieved a significant legal victory related to property tax exemptions, which resulted in financial savings of over million. This was crucial in light of ongoing financial strain; Tower reported a narrow operating gain of .9 million for the fiscal year ending June 30, tempered by the fact that this figure included revenue from the sale of a closed hospital campus.

Over the past few years, Tower Health has faced considerable financial difficulties, with cumulative operating losses exceeding .8 billion following its acquisition of five hospitals in 2017. Subsequently, the organization has closed or sold several of these facilities in efforts to stabilize its finances. Upcoming financial results for the quarter ending September 30 are expected to be released shortly, shedding further light on the organization’s ongoing financial recovery efforts.

These developments illustrate the significant challenges facing healthcare providers in today’s economic climate and the strategic responses they are compelled to undertake.