Tower Health Cutting 1,000 Jobs Following COVID-19 Revenue Loss

Tower Health announced that because of the financial impact of COVID-19, the system will implement a reduction in its workforce of approximately 1,000 positions. Approximately 10 percent of these positions are currently unfilled.

In a memo to employees and medical staff, Tower Health President and CEO Clint Matthews outlined the impact of the virus on the system’s financial health.

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“While we excelled in caring for the community during the height of the pandemic, and continue to do so today,” Mr. Matthews wrote, “the government-mandated closure of many outpatient facilities and the suspension of elective procedures caused a 40 percent drop in system revenue-representing $212 million in lost revenue through May. At the same time, our spending increased for personal protective equipment, staff support, and COVID-related equipment needs.”

As part of this reduction, Tower Health will close the Pottstown Hospital Maternity Unit, and will close or consolidate certain clinical services including the THMG Reading Birth Center, select behavioral health services at Reading Hospital, the Reading Hospital occupational medicine and sports medicine programs, and two physician practices: Coventry Foot & Ankle and Premier GYN Limerick.

The system will also accelerate its ongoing Transformational Excellence program to identify cost savings and performance improvement, while moving toward a more centralized and streamlined model for Tower Health management that will support greater efficiency and faster decision-making. These actions, and others in the future, will contribute to the goal of achieving approximately $230 million in cost savings over the next two years.

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Impacted employees will receive severance packages, support with job placement both within and outside the system, and other services. “The decision to reduce our workforce has been difficult and painful, because it impacts lives,” Mr. Matthews wrote. “It is necessary, however, to ensure that Tower Health can continue to serve the community with high-quality healthcare in the months and years ahead.”

Along with the above, potential additional future actions may be taken as Tower Health continues to monitor COVID-19’s impact on how the community seeks healthcare. The system will also continue to evaluate all Tower Health assets, operations, and services for future sustainability.

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