Fitch Ratings has knocked three levels off the Tower Health credit rating, landing it in a “CCC+” financial position. Harold Brubaker covered the downgrade in The Philadelphia Inquirer.
The revised credit rating now characterizes Tower Health, owner of Montgomery County’s Chestnut Hill Hospital and Pottstown Hospital, as representing a real possibility of default. The Chestnut Hill location’s sale is pending.
The drop toppled Tower Health from its B+ perch of Oct. 2021.
The Berks County nonprofit health system has recorded operating losses of $854 million over the past three years, according to Fitch. Its financial woes stem from an expensive and rapid expansion in the collar-county market, the effects of COVID-19, and labor-related issues.
Year-end June 30, 2022, results showed a $190.8 million budget shortfall.
“While we are disappointed in the Fitch rating, it reflects challenges we are aware of and have been working aggressively to address,” Tower presented in a statement. “There is strong community support for services from Tower Health providers and facilities, and we are working aggressively to add staff to meet patient demand.”
More on the Fitch assessment of Tower Health’s financial ailments is at The Philadelphia Inquirer.
