Health systems striving for financial stability often have a long road to achieving their goals, but the milestones along the way are important. Tower Health achieved an important financial benchmark this year.
“For the first time in, believe it or not, nearly a decade, Tower Health achieved a positive operating income. Now, I realize that may not sound like the kind of phrase that gets anyone’s heart rate up, but when you understand what it took to get here, it means a great deal, because from the lens I look through, that result isn’t just a financial milestone, it’s another key step for our health system in an incredibly challenging healthcare environment,” Michael Stern, president and CEO of West Reading, Pa.-based Tower Health, said in an interview for the “Becker’s Healthcare Podcast.”
Mr. Stern has been at Tower Health for four years, with the last year and a half as CEO. The recovery has required tough decisions and transformation that hasn’t always been easy. But that’s the job of the executive team.
“The last several years required really difficult decisions to get us back into positive operating income. We never took them lightly, because they impacted people, but we made them because we believe Tower Health had a future worth fighting for and because our communities need us to be strong for generations to come,” he said.
With the financial foundation stabilized, Tower Health’s new three-year strategic plan centers on three areas: access, culture and patient experience, and deeper community presence. One early move on access has already exceeded expectations.
“We opened a 24/7 retail pharmacy at Reading Hospital. Believe it or not, it’s the only pharmacy in the region over 30 miles that’s available 24/7,” he said. “I thought it was going to be meaningful, but the impact over the last few months has been way stronger than I anticipated. It’s just a reminder of how important access is to patients.”
The retail pharmacy started on a small scale, but many patients have now switched their prescription preferences to Tower Health. That move alone proves the strategy’s success.
“What I heard from several patients as I was asking why they were transitioning their prescriptions over to Tower Health, they didn’t necessarily need something 24/7 today, they were just thinking about the times that are on a holiday or on a Sunday night, or they leave an urgent care at 9 o’clock at night, and there’s no way to fill their script and they may have to wait one day, two days, three days to get there,” Mr. Stern said.
Now, they can get their prescriptions easily when the time arises.
Alongside the internal work, Tower Health began an affiliation with Philadelphia-based Jefferson Health in July. Mr. Stern was clear that the arrangement is not a merger or acquisition and that the process of getting there mattered as much as the outcome.
“It’s not a takeover. It’s not an acquisition,” he said. “We were looking at a bigger partner, somebody who could provide anything that we didn’t, or bring in things that we just don’t do today and that we’re not planning on doing tomorrow.”
The two senior executive teams spent approximately a year working alongside each other before formalizing the arrangement.
“We spent a year working side-by-side, the two senior executive teams, to make sure that we got to know each other and really understand how working together felt, and it’s been a really good fit,” Mr. Stern said. “They bring resources and capabilities into our communities like clinical trials and innovation that can strengthen the care that we provide locally.”
Across all of these moves, the financial recovery and the cultural work always happened together.
“Financial strength and culture are not competing priorities; actually, they’re fully connected,” he said. “We cannot fulfill our mission without financial stability, but we cannot create lasting financial stability without a strong culture, engaged employees, and honestly, fantastic patient care.”
With Tower Health’s first profitable fiscal year in roughly eight years behind it and strong patient volumes in the opening quarter of fiscal 2027, the task now is holding the discipline that produced the result.
“We’ve really built a stronger foundation, which is allowing the organization to shift from stabilization towards sustainable growth and strategic investment,” Mr. Stern said. “We still have to maintain the fiscal discipline that got us here, but we’re able to begin shifting the conversation from stabilization to thoughtful, strategic growth.”
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