- Penn Medicine has dropped its plans to buy a shuttered hospital from West Reading, Pennsylvania-based Tower Health.
- The system had entered into a deal to buy the Brandywine Hospital campus in June, where it planned to offer services through a partnership with the Department of Veterans Affairs. But Penn later determined it would be “unable to build out the infrastructure for the project in the space available,” the health system said in a statement.
- Cash-strapped Tower closed Brandywine Hospital in January 2022 after another agreement to sell the facility fell through.
Some hospitals and health systems have struggled in the midst of the COVID-19 pandemic as inflation and increased labor costs drained their bottom lines.
This year might not bring a full recovery for the provider sector either, and individual hospitals’ success depends on how successful they are at controlling expenses, experts told Healthcare Dive.
Financial struggles have also become a significant driver behind hospital mergers and acquisitions, according to a report from consultancy Kaufman Hall. Nearly a third of the 65 deals announced last year involved a financially distressed system.
Healthcare bankruptcies also soared in 2023, which may not fully depict the hospital sector’s financial stress because struggling sites could be closed instead, according to an analysis by healthcare restructuring advisory firm Gibbins Advisors.
Tower, which operates four hospitals in the Philadelphia area, reported a nearly $193 million loss from operations in its fiscal year 2023 ended June 30. The system has recently sold other facilities as well.
“The Brandywine property has previously received significant interest from a variety of organizations,” a Tower spokesperson told Healthcare Dive. “We will reengage in discussions with these companies, along with others, to secure a new owner for the property.”