by John R. Fischer
, Senior Reporter | September 28, 2023
Tower Health, in Pennsylvania, will sell eight of its 22 urgent care centers to American Family Care and close five of its other ones, leaving the healthcare system with nine.
American Family Care manages more than 200 AFC urgent care centers in 26 states, including about 30 in the Philadelphia area. It will take over Tower Health’s sites in Kennett Square, Warminster, Newtown, Doylestown, Lansdale, Wynnefield, Frazer, and Conshohocken, according to the Philadelphia Business Journal
Tower Health, which entered the urgent care market in 2018, will close another five locations in North Wales, Parkesburg, Levittown, Roosevelt Boulevard in Northeast Philadelphia, and Thorndale. It expects all workers to be offered positions at American Family Care centers in these areas. Its remaining urgent care centers are in Oaks, Limerick, Hamburg, Sinking Spring, Wyomissing, Exeter, Douglassville, Coventry, and Gilbertsville.
"This decision, while difficult, is an important step forward in our journey to right-size Tower Health and to concentrate on our new focused service area in Berks, Northern Chester, and Western Montgomery counties, as well as St. Christopher’s Hospital for Children," Tower Health told HCB News in a statement.
Tower Health acquired 19 centers from Premier Urgent Care in 2018, a year after acquiring five medical centers in Philadelphia, becoming part of the market there.
But in the last few years, the healthcare system has attempted to sell its urgent care centers and other facilities amidst financial hardships. For the fiscal 2023 year, Tower Health’s operating loss was $141.9 million, down 33% from a more than $212 million deficit in 2022. Total revenue increased less than 1% to $2.16 billion, while net patient revenue dropped to $1.93 billion from $2 billion the previous year.
It was in talks with an unnamed private urgent care operator in early 2023 to sell 17 centers in its non-core areas, but the deal did not pan out.
It did manage to sell Chestnut Hill Hospital in Philadelphia for $28 million to a group led by Temple University Health System and including Redeemer Health and the Philadelphia College of Osteopathic Medicine. It also, in 2022, sold its closed-down Jennersville Hospital
for $8 million to ChristianaCare, which plans to reopen it
and has a pending agreement in place to sell its shuttered Brandywine Hospital to Penn Medicine that is expected to be completed in December.
Despite financial hardships, a Tower Health spokesperson offered reasons for optimism. "Tower Health was cash flow positive by nearly $6 million in the final quarter of fiscal year 2023 and is on budget through the first two months of this year to meet its goal of returning to profitability," he said.
The sale with American Family Care is expected to close on September 30.