Daily Local News (West Chester, PA)
LAWYER HAS PLAN TO SPIN OFF 3 HOSPITALS
Chester County facilities would form a nonprofit
A retired Philadelphia attorney with roots in Chester County wants to take three hospitals out of the Tower Health system.
As West Reading-based Tower Health’s financial troubles disrupt doctors in the region, attorney Barton Post is leading a push for a novel model to salvage Phoenixville, Brandywine and Jennersville hospitals.
Post, founder of Post & Schell PC, said he has been working with the Chester County Medical Society and the Pennsylvania Medical Society for the last four months in developing a model that would incorporate certain services into the hospitals under a nonprofit umbrella.
Post said providing services such as child care, elder care and wellness programs could bring the financial lift the Chester County hospitals need to stay afloat.
He said the hospitals each have foundations that he believes would support the venture. He’s spoken with investors, medical economists and elected officials trying to generate interest in the idea.
Post is a retired malpractice attorney. He said he spent his life defending hospitals and understands how important they are to the community.
Post said he is motivated by his love for Chester County where he lived and he worries that curtailing services at the hospitals will weaken them.
“If these hospitals close or staffing is reduced what would happen would be catastrophic for the communities they serve,” Post said. “We would want to get the creditors and bondholders involved in these discussions because they can put pressure on Tower. As it stands now, bond holders and creditors have not taken a public stand in trying to save these hospitals.”
Post suggests that bond holders’ and creditors’ active public involvement might help in saving the hospitals, their communities, as well as their investments.
Tower declined to comment on Post’s proposal.
Post’s public statement follows Tower Health’s announcement Monday it would restructure its medical group, involving nearly 200 doctors and other staff in a move to improve its finances.
Tower Health Medical Group is a network of more than 130 primary care and specialty care practices, that employs 876 physicians and advanced practice providers.
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 — which include closures, consolidations and contracts with new health systems — are expected to affect 95 providers and 100 support staff.
Tower Health is based in West Reading with Reading Hospital as its anchor. Reading’s expansion into Tower started in 2017.
Tower 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.
Tower’s operating losses for fiscal year 2020 were more than $400 million.
Despite the pandemic shutdown, Reading Hospital, turned a $66 million profit in fiscal year 2020. Prior to COVID, four of the other six hospitals in the system were performing better than the previous year, executives told investors in November.
Tower’s unaudited disclosure for the first quarter of fiscal 2021 showed Reading Hospital had $54 million income. Chestnut Hill showed $2.5 million in operating income. Jennersville Hospital showed $1.2 million income while Phoenixville showed $1.5 million income. Brandywine Hospital had a $7.8 million loss while Pottstown Memorial showed a $10.3 million operating loss. St. Christopher’s had a $11.6 million loss, according to the unaudited disclosure.
‘A degree of anxiety’
Doctors have been reluctant to talk about how the financial troubles at Tower are affecting their staff, practices, work or them personally. Medical societies are working behind the scenes.
“PAMED’s focus is to ensure that the thousands of patients within Tower Health’s territory continue to receive the care they need without disruption,” said Claire E. Shearer, senior director, membership, communications, and county relations with the Pennsylvania Medical Society, in an email.
Pressure has been mounting, doctors’ advocates say.
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.
Tower closed its cardiac catherization lab at Brandywine Hospital on Dec. 11.
In February, Tower asked doctors in its medical group to see one more patient a day.
The turnaround has also focused on revenue cycle (including cash acceleration), supply chain, pharmacy, physician services, and managed care contracting.
“Our physicians’ focus remains on their patients,” said TJ Huckleberry, executive director of Berks County Medical Society in an email statement. “There is a degree of anxiety over the uncertainty of their practices, so any speculation on the effects on our community is theoretical, at best. Until Tower gives details and specifics on the impact to our local community, BCMS and PA Med Society are actively working on anticipating the needs of our physicians and other members. We are proactively seeking out partnerships and potential resources for our members and our community.”
Trends for physicians
Hospital-employed physicians like Tower Health Medical Group are part of a trend in the changing health care landscape, according to a recent American Medical Association report.
According to the AMA, with the steady decline since 2012 in the share of physicians working in private practices, there has been a concurrent increase in the share of physicians working directly for a hospital or for a practice at least partially owned by a hospital or health system.
Almost 40% of patient care physicians worked either directly for a hospital or for a practice with at least partial hospital or health system ownership in 2020, up from 34.7% in 2018 and 29% in 2012.
Physicians working directly for a hospital were 9.3% of all patient care physicians, an increase from 8% in 2018 and 5.6% in 2012.
Physicians working in practices at least partially owned by a hospital or health system were 30.5% of all patient care physicians, an increase from 26.7% in 2018 and 23.4% in 2012.
For the first time, the AMA survey included an option for private equity and found 4% of patient care physicians worked in practices owned by private equity firms.
The majority of patient care physicians worked outside of physician-owned medical practices in 2020, according to a newly released biennial analysis of physician practice arrangements.
This is the first time the share of physicians in private practices has dropped below 50% since the AMA analysis began in 2012.
Employed physicians were 50.2% of all patient care physicians in 2020, up from 47.4% in 2018 and 41.8% in 2012.
In contrast, self-employed physicians were 44% of all patient care physicians in 2020, down from 45.9% in 2018 and 53.2% in 2012.
The percentage of physicians who were independent contractors has been steady, fluctuating in the narrow band between 5% (2012) and 6.7% (2018), according to the AMA.