Tower Health is laying off 350, or 3% of its workforce, including service cuts at Pottstown Hospital
The healthcare job cuts come on the heels of Jefferson Health's announcement last month that it was laying of 1% of its employees, or 600 to 700 people.
Tower Health is laying off 350 people, or about 3% of its workforce, as it contends with financial headwinds facing the healthcare industry, the Berks County nonprofit said Friday.
Many of the job cuts are in administrative areas, but Pottstown Hospital in Montgomery County is losing some medical services. There, Tower is closing the combined intensive care/critical care unit, the Pottstown location of the McGlinn Cancer Institute, and the hospital’s endoscopy center.
The elimination of services in Pottstown was part of a broad review of finances and patient volumes, Tower CEO Michael Stern said Friday in an email to employees.
“Almost all of the affected services will continue being offered at other sites within our network to ensure uninterrupted access to the high-quality care our communities count on,” he said.
In addition to Pottstown, Tower operates Reading Hospital in West Reading and Phoenixville Hospital in Chester County. It also owns St. Christopher’s Hospital for Children in Philadelphia in a 50-50 joint venture with Drexel University.
» READ MORE: Jefferson Health had layoffs in October.
The total number of layoffs in Pottstown is 131, including 80 members of the Pennsylvania Association of Staff Nurses & Allied Professionals. Just over 700 employees will remain after the cuts.
The layoffs include about 60 registered nurses. The layoffs are effective Jan. 16, according to a letter to the union, which represents 275 people at the hospital.
“At a time when communities need more access to care, not less, slashing services and laying off skilled caregivers isn’t just reckless, it’s cruel,” PASNAP president Maureen May said in a statement. “These service cuts will deepen healthcare disparities, force patients to travel farther for essential treatment, and leave caregivers and families in crisis.”
The critical care unit has 12 staffed beds, according to state data, and the hospital is licensed for 213 beds. Although the cancer infusion center at the hospital is closing, radiation oncology services are expected to continue.
The program eliminations in Pottstown follow Tower’s victory this year at the Pennsylvania Supreme Court in a significant property tax case. Pottstown School District denied Pottstown Hospital a property tax exemption, arguing that the link between executive bonus and profits was too strong.
The court said the bonuses were reasonable because nonprofits need to compete with for-profit companies for talent to run increasingly complex businesses. Winning the exemption saved Tower a little more than $1 million, according to a school district official.
Years of digging out of a financial hole
In August, Tower reported a narrow operating gain of $5.9 million for the year that ended June 30, but that figure included proceeds from the sale of the shuttered Brandywine Hospital campus. Excluding that sale, Tower would have had its eighth straight year of operating losses.
That string of operating losses, which totaled $1.8 billion, followed Tower’s 2017 purchase of five community hospitals from Community Health Systems for more than $400 million. Tower has since closed two of those hospitals — Brandywine and Jennersville — and sold a third, Chestnut Hill Hospital.
Tower is expected to report financial results for the three months that ended Sept. 30 by the end of next week, according to its usual schedule.