PANDEMIC FALLOUT
Tower Health to cut 1,000 jobs after huge revenue losses
With a footprint that includes Reading Hospital and five other acute-care hospitals, a network of 22 urgent-care facilities and a rehabilitation hospital, Tower Health is a giant in the health care industry in southeastern Pennsylvania.
Tower Health, based in Berks County, announced Tuesday morning it is reducing its workforce by about 1,000 positions because of huge revenue losses stemming from the coronavirus crisis.
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.
“While we excelled in caring for the community during the height of the pandemic, and continue to do so today,” 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.
The positions are across the Tower Health system in executive, management, clinical and support areas. About 10% of the affected positions are currently unfilled.
Though spread across the system, the job cuts will be felt in the Berks and the
Tri-County area in terms of health care services, according to program administrators and a representative of a nurses labor union.
Facilities to close
Tower Health announced in its release it will close the Pottstown Hospital Maternity Unit and Tower Health Medical Group Reading Birth Center in Kenhorst, and it will close or consolidate certain clinical services, including select behavioral health services at Reading Hospital, as well as the Reading Hospital occupational medicine and sports medicine programs, and two physician practices, Coventry Foot & Ankle and Premier GYN Limerick.
Dr. Edward B. Michalik, head of Berks County Mental Health/Developmental Disabilities, which administers state and federal funds to eligible mental health service providers, said he received notice Thursday that the intensive mental health program at Reading Hospital will be terminated by Aug. 14.
The program is for individuals who have more significant mental health problems and who may need to step up to a more intensive program than other services that receive funding through the county MH/ DD stream, Michalik said.
“That’s going to have a big impact,” he said.
In addition, Stanley Papedemitriou, executive director of the Council of
Chemical Abuse of Berks County, which oversees state and federally funded drug-and-alcohol treatment programs, said Reading Hospital is closing a key short-term, residential rehab program that has been centrally located in the county for decades.
In its present off-campus location on Buttonwood Street in West Reading near the traffic circle, the program was easily accessible to city residents as well as those outside of the city, Papademetriou said.
Formerly located on the main hospital campus, it is the only drug withdrawalmanagement program in the county accessible to a large portion of residents who are Medicaid-eligible, he said.
He said he’s confident other programs will be found for local clients, but there’s still an impact.
“The issue is it was right in the heart of the county, right outside the city, and has been there for decades,” Papademetriou said. “I’m not going to be exaggerating to say thousands of people who are in recovery from addiction took their first step there.”
Though the funding for these two programs is intact, Michalik and Papedemitriou are scrambling to find other providers who will be able to handle the patient load.
“Stan and I are scrambling because we have 60 days to transfer people to appropriate levels of care both on an interim level and long-term level,” Michalik said.
Finding other providers
The closing of the maternity ward in Pottstown Hospital will also have an impact.
Megan Othersen Gorman, communications specialist with Pennsylvania Association of Staff Nurses & Allied Professionals, said the union received notification Tuesday that the ward where 32 nurses work will close Aug. 14.
For patients expected to deliver near, on, or after the closure date, Tower Health will work with their physicians to facilitate care for their patients to other area hospitals, Tower Health spokeswoman Jessica Bezler said in an email.
She said the Reading Birth Center also will close Aug. 14.
In addition to the workforce reductions, Matthews said Tower Health will 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 decisionmaking. 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, according to the news release.
Employees who are laid off 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,” 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.”
Future actions may be taken as Tower Health continues to monitor COVID-19’s impact on how the community seeks health care. The system will also continue to evaluate all Tower Health assets, operations, and services for future sustainability.
Jim Gerlach, president and CEO of the Greater Reading Chamber Alliance, said, “As the second largest employment sector in Berks County, the shedding of 1,000 jobs at Tower Health is incredibly sad for our community.
“While we understand that the COVID-19 pandemic has left many companies reeling, this latest blow to the local economy is further proof that Berks County needs to reopen safely and efficiently. If that does not happen, the ripple effect could prove to be even more damaging to our recovery efforts.”
Berks County Commissioner Christian Y. Leinbach
issued this statement after learning about the layoffs: “The announcement today that the Tower Health System is laying off 1,000 healthcare workers is sad and will negatively impact workers and their families. Unemployment compensation only goes so far and what these workers need is a job.
“We’ve seen the very serious health impacts of COVID-19, but now the economic casualties are beginning to emerge. While the loss of these 1,000 healthcare jobs is very serious let’s make sure we don’t forget the small businesses here in Berks that have also been impacted by this crisis. We need to get our economy reopened as soon as possible but we need to also reopen safely. These are very difficult times for everyone.”
In addition to Reading Hospital and Pottstown Hospital, Tower Health consists of Bandywine Hospital in Coatesville, Chestnut Hill Hospital in Philadelphia, Jennersville Hospital in West Grove, Phoenixville Hospital in Phoenixville, and St. Christopher’s Hospital for Children, a partnership of Tower Health and Drexel University in Philadelphia. It also includes Reading Hospital Rehabilitation at Wyomissing, Reading Hospital School of Health Sciences in West Reading, home health care services provided by Tower Health at Home, and a network of 22 urgent care facilities in the region.