West Reading, Pa.-based Tower Health recently agreed a $142 million debt refinancing deal with bondholders to almost double its days of cash on hand and secure a longer runway to execute its financial turnaround and return to profitability.
Tower launched in 2017 after the formerly named Reading Health System acquired five Pennsylvania hospitals from Franklin, Tenn.-based Community Health Systems, but a challenging financial period saw it lay off workers, close two hospitals and several urgent care centers.
However, the system recently promoted various executives to strengthen its leadership team amid "a resurgence of optimism" and is making significant progress improving its financial performance, according to CEO Sue Perrotty.
The health system's overarching goal, according to President and COO Michael Stern, is to maintain and grow high-quality, compassionate and accessible care.
"The quality of our care is the cornerstone of our strategy, driving efforts to improve patient access, increase volumes, and enhance retention and recruitment," Mr. Stern told Becker's. "These initiatives reduce our reliance on locum tenens and agency staff, ensuring more consistent and cost-effective care."
Bolstered by company culture initiatives, Tower said it has made significant progress recently recruiting and retaining talent — a key pillar in its strategic plan. Its ultimate goal is to focus on patients, providing an excellent healthcare experience, and making the system the best possible environment for physicians, nurses, practitioners and staff to work.
"A strong focus will be maintained on retention and professional development, along with recruiting high-quality providers and support staff. By attracting top-tier talent, we can further elevate the standard of care we offer," Mr. Stern said. "Our recruitment efforts will be concentrated on areas of most significant community need, ensuring that we address the specific health challenges faced by our population."
Tower recently onboarded more than 110 physicians and practitioners in addition to clinical and support staff to drive improved performance and strengthen its strategic service lines.
Rohinton Morris, MD, former chief of the cardiothoracic surgery division at Philadelphia-based Jefferson Health, recently joined Tower as chief of cardiothoracic surgery in April, bringing a wealth of experience and strong leadership to the service line and overall health system.
Tower has also added key providers in areas including oncology, breast surgery, emergency medicine, neurosciences and obstetrics and gynecology.
"Our costs are stabilizing, and our recruitment and retention initiatives are taking hold," Mr. Stern said.
"Equally important is our focus on systemizing Tower Health by fully integrating across our core service areas in Berks, Northern Chester and Western Montgomery counties, as well as St. Christopher's Hospital for Children," he said. "Additionally, we are leveraging our outpatient pharmacy opportunities at Reading Hospital to grow volume and maximize program benefits."
Ensuring "revenue integrity" is critical to the long-term success of the health system, which reported a $27.4 million operating loss for the nine months ending March 31 and has more than $1.2 billion in long-term debt, according to its most recent financial report.
"We achieve this by meticulously collecting payments for services rendered and by partnering with Ensemble … to enhance efficiency and improve the patient experience in billing," Mr. Stern said. "Across the board, we closely track our performance against these objectives of reducing costs and increasing our revenue efficiency to ensure we meet our performance goals and make timely adjustments when necessary."
Hospital leaders pinpointed revenue cycle management as a key opportunity to improve the organization's financial health.
Effective July 1, Tower will transition its revenue cycle operations, utilization review, patient access services and provider advisers to Ensemble. Around 675 Tower employees will move to Ensemble, which manages more than $32 billion in annual net patient revenue.
"As Tower Health returns to profitability, our growth strategy will include forming strategic partnerships that enhance our operations and enable us to provide the highest quality services to the communities we serve," Mr. Stern said. "These partnerships will be crucial in expanding our capabilities and ensuring that we can continue to meet the evolving healthcare needs of our patients and communities."
Health system leaders believe Tower is the "right size" to effectively implement these initiatives, allowing it to remain agile and responsive to both opportunities and challenges, according to Mr. Stern.
"Through these targeted efforts, we aim to strengthen our position as a leading healthcare provider while continuously improving the health and well-being of the communities we serve," he said.