Sue Perrotty said the refinancing of $1.2 billion of bond debt next month is the final piece of a years-long turnaround effort.
Four years ago, it was widely expected that Tower Health, crushed financially by the pandemic and buckling under losses from a 2017 acquisition of five hospitals, would have to file for bankruptcy to escape its heavy debt load.the nonprofit anchored by Reading Hospital in Berks County had its first profitable quarter in five years in the spring and expects to refinance $1.2 billion in bond debt next month, giving itself five more years to nurse itself back to financial health.
Perrotty said that even though there are higher interest rates in the refinancing, the amount of money Tower has to pay each year in debt service will remain stable at about $55 million for five years. That’s because some of the accruing interest will add to the debt. That’s far below where it was before Tower acquired five Southeastern Pennsylvania hospitals from Community Health Systems Inc. in 2017., which took over what health systems call revenue cycle. That involves everything from helping patients make appointments to collecting bills from insurers and customers.
“Our future and some of the bigger investments and the bigger opportunities will be through partnerships,” Perrotty said.
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