Tower Health’s cash reserves are extremely low, sinking by $331 million over the last 12 months

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Tower Health's deep financial hole worsened this quarter and its cash reserves are extremely low, sinking by $331 million over the last 12 months.

. Tower intends to continue running Phoenixville, Pottstown, and Reading Hospitals, as well as St. Chris in partnership with Drexel.Even financially strong health systems are either losing money or logging relatively thin profit margins this year, in part because of a sharp spike in labor costs.Tower Health records massive loss on St. Chris and other hospitals it bought in Philadelphia region

Tower’s revenue in the year ended June 30 was $2.17 billion, down slightly from $2.19 billion the previous year. Its operating loss was $195 million, down from $244 million the year before. Its net loss was $200 million. Days cash on hand is a rolling measure that changes as cash comes in and is then used to pay bills. At Tower, the key financial measure was extraordinarily high at nearly a year in 2017 before the expansion., one of the three major credit rating organizations, said a dozen health systems it rates with annual revenues between $1.75 billion and $2.5 billion had a median of 260 days of cash.

 

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Over levered and run by want to be bankers and venture capitalists. What could possibly go wrong in the hospital space?

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