Texas turnaround firm to buy two Tower Health hospitals
A Texas turnaround company will take over two embattled Tower Health hospitals starting January 1, one of which had been slated to close that day.
Canyon Atlantic Partners, LLC will assume ownership and operations of West Reading, Pennsylvania-based Towers’ Brandywine and Jennersville hospitals, Tower announced Monday. Terms of the definitive agreement were not disclosed. The deal saves the Jennersville hospital from closure after Tower’s board signed off on shuttering the facility in September as part of a broader restructuring plan.
The agreement holds that Canyon Atlantic Partners, headquartered in the Austin area, will offer employment to all of the hospitals’ clinical and non-clinical staff in good standing effective on the date of transfer. The turnaround firm will also assume ownership of all inpatient and outpatient services associated with the hospitals.
“There was extensive work done to find a solution for Jennersville and Brandywine Hospitals, and we are pleased to have identified one that keeps both hospitals open,” Tom Work, Tower’s board chair, said in a statement. “This transfer of ownership will ensure continued, convenient access to care for the Jennersville and Brandywine communities.”
Tower, a not-for-profit system, declined to comment beyond the news release. Canyon Atlantic did not respond to a request for comment.
Tower has sustained heavy financial losses in recent years, including a $439 million operating loss on $1.9 billion in revenue in fiscal 2020, a nearly 23% loss margin. That widened to a $614 million loss on $2.2 billion in revenue in fiscal 2021, a 28% loss margin.
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Executives have said COVID-19 took a toll on the system, but Tower had been losing money before the pandemic. The losses were most concentrated among the five acute-care hospitals Tower bought from for-profit Community Health Systems in 2017. Those hospitals lost a combined $235 million in fiscal 2020.
As part of its restructuring announced in September, Tower said it planned to sell Chestnut Hill Hospital and more than a dozen urgent care centers to Trinity Health Mid-Atlantic.
David Kreye, Canyon Atlantic’s CEO, said in a statement that his firm is honored to be chosen and will prioritize working closely with the hospitals’ communities and medical staff.
“We look forward to bringing our substantial experience in acute care hospital turnaround and growth to further elevate the hard work of the excellent medical staff at Brandywine and Jennersville Hospitals, and ultimately making an impact with the greater community that they serve,” he said.
Canyon Atlantic has been registered as a limited liability company in Austin, Texas since October 2017, according to the state’s Comptroller of Public Accounts website. A separate company called Canyon Atlantic Partners was registered in August 2021 in Lakeway, a city northwest of Austin. Kreye is the registered agent for both businesses.