Tower merging physician offices

Nearly 200 doctors, staff impacted

Tower Health announced to its employees Monday that it would restructure its medical group, impacting nearly 200 doctors and other staff in a move to improve its troubled finances.

It is not yet clear which practices will be impacted, but a spokesman said the restructuring will touch the whole system, including doctors’ practices in Berks, Montgomery and Chester counties.

Tower Health is based in West Reading with Reading Hospital as its anchor. It consists of seven hospitals, about 20 urgent cares, a home health care subsidiary, ambulance service and a behavioral health center with partner Acadia Healthcare and a new medical school partnership with Drexel University.

The impacted practices will be announcing options to their patients via letters, a spokesman said. Some offices will close while others will consolidate. Some practices will be aligned to a different health system. It is not clear yet which practices are affected in which way.

“We will communicate directly with these individuals over the coming weeks,” interim Preisdent and CEO P. Sue Perrotty wrote in the note to all employees.

Tower Health Medical Group is a network of more than 134 primary care and specialty care practices, that employs 876 physicians and advanced practice providers, a spokesman said. That does not include those employed by St. Christopher’s Hospital for Children and Tower urgent care centers. Advanced practice providers refers to nurse practitioners, physician assistants, certified nurse midwives, clinical nurse specialists, and certified registered nurse anesthetists.

Tower said the changes are expected to impact 95 providers and 100 support staff.

The move is expected to improve Tower’s financial performance by $70 million by the end of June, Perrotty wrote.

In the six months that ended Dec. 31, the medical group had an operating loss of $122.8 million, the greatest loss among all of Tower’s properties.

The restructuring announcement was made to staff hours before Perrotty and Tower’s consultants were to meet with bond investors Monday afternoon. Tower has about $1.5 billion in municipal bond debt, which it had planned to pay off from revenue from its hospitals.

About two weeks ago, Tower’s board was to receive bids for the system. Officials have declined to discuss how many or even whether bids were received. Struggling under massive losses and bond downgrades, Tower is up for sale in pieces or as a whole. Officials have not ruled out bankruptcy. The process is expected to conclude by the end of June.

In March, Tower laid off 15 people at St. Christopher’s, including four doctors.

The consolidation of Tower Health Medical Group practices is expected to reduce expenses for office space leasing and equipment. Practice locations targeted for closure are those with consistent high net operating loss, Perrotty said in the note.

Tower will also transition a number of providers from medical group employment to new agreements with other provider organizations or into independent practice. Tower declined to say which provider organizations.

Tower said it would continue to pay incentives to physician and advanced practice providers at a reduced rate as it did last year, at 60% of eligible dollars.

“While some providers will transition to independent practice or join other organizations, these individuals remain important members of our health care community, and will have the opportunity to continue on the hospitals’ medical staffs,” Perrotty wrote. “We understand the stress that comes with this kind of change, and we are committed to making these transitions with respect and compassion. Tower Health is grateful for the contributions of these physicians and support staff members and will provide human resources support.”

Impacted employees will also have the option to receive priority placement in open positions within the health system and will receive other support and services throughout the process, she wrote.