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Tower Health’s audit for fiscal 2025 reversed its reported operating profit

Separately, Tower reported a $15.9 million operating loss for the three months that ended Sept. 30.

Pottstown Hospital is one of Tower Health's three acute care hospitals. It also owns St. Christopher's Hospital for Children in a joint venture with Drexel University. Tower said this month that it is cutting services and jobs at the Pottstown facility as part of an effort to boost its finances.
Pottstown Hospital is one of Tower Health's three acute care hospitals. It also owns St. Christopher's Hospital for Children in a joint venture with Drexel University. Tower said this month that it is cutting services and jobs at the Pottstown facility as part of an effort to boost its finances.Read moreHarold Brubaker / Staff

Tower Health’s preliminary financial report in August for fiscal 2025 showed a $5.9 million operating profit, a gain that came thanks for the sale of a shuttered hospital in Chester County.

But that apparent annual profit, the Berks County nonprofit’s first since 2017, turned into a $20.6 million loss when Tower released its annual audit.

Auditors from KPMG decided that Tower should boost medical malpractice reserves and give up on collecting millions owed by patients, Tower said in a statement.

“As part of our standard accounting process, the audited financials for the full year reflect increased malpractice insurance reserves and final adjustments to accounts receivable,” Tower said.

Most of the $26 million swing to a loss came from medical malpractice, but Tower also reduced what is called patient accounts receivable, representing unpaid bills, to $236.6 million from $251.6 million in August’s preliminary results, according to Tower’s audited financial statements that were published Friday.

Separately, Tower reported a $15.9 million operating loss for the three months that ended Sept. 30. That loss was a bit bigger than the $14.2 million loss in the same period last year. Tower’s revenue for the quarter was $501 million, up 4% from $479.8 million last year.

The results for the first quarter of 2026 did not include expenses for Tower’s layoff of 350 employees, or about 3% of its workforce, earlier this month. The cuts hit Pottstown Hospital particularly hard. Tower is eliminating 131 jobs there and eliminating some services.

The closures include the combined intensive care/critical care unit, the Pottstown location of the McGlinn Cancer Institute, and the hospital’s endoscopy center.

Two unions that represent Pottstown employees, the Pennsylvania Association of Staff Nurses and Allied Professionals and SEIU Healthcare Pennsylvania have decried the cuts and called on management to engage in discussions on how to preserve jobs and services.