Sale of hospital assets possible

West Reading-based Tower Health might sell hospitals or other assets in Chester, Montgomery and Philadelphia counties as soon as the first quarter of 2021, Tower executives told bond investors this week.

Executives said hospitals, ambulatory assets, urgent cares and partnerships would be evaluated with the help of turnaround specialists, Guidepost, which the health system contracted last week.

The only thing not on the table is Reading Hospital, which, despite the coronavirus shutdown, turned a $66 million profit in fiscal year 2020. Prior to COVID-19, four of six hospitals were performing better than the previous year, executives told investors.

“We will knowingly do nothing to detract from the clinical excellence that we built in this place for the last 10 years,” said C. Thomas Work, chairman of the board of directors. “There is a very strong preference, if not an obsession, to preserve the mothership, Reading Hospital.”

Work also said the board remained committed to a medical school it plans to open in 2021.

“Recognizing that we will need to grow as most organizations do, but perhaps at a measured pace, and also the academic affiliation with Drexel (University) as a key part of our growth, if for no other reason than to recruit physicians in the specialties we need,” Work said. “By attracting talented residents to the medical school to our campus here in Reading to what we have to offer at the Reading Hospital and in many cases we hope to retain the best talent we can in part relieving some of the brain drain in Pennsylvania.”

The construction of the Drexel University College of Medicine campus in Wyomissing is underway and operations are set to begin in the 2021-22 academic year, with 40 medical students per class. Once the campus is fully operational, management expects it will have 200 medical students.

Guidehouse’s David Burik told investors that loss, revenue and productivity of each of its 600 physicians in its medical group will also be evaluated.