'Teach everyone your numbers': One health system CEO's blueprint for success

As Tower Health embarks on a leadership transition, Sue Perrotty prepares to step down from her role as CEO — a position she initially took on as an interim leader but transformed into a pivotal chapter in the health system's turnaround. 

After guiding the West Reading, Pa.-based health system through one of its most challenging financial periods, stabilizing operations, and leading a cultural reset, Ms. Perrotty is set to return to the board of directors in late February while President and COO Michael Stern steps into the CEO role.

A former banking executive with extensive experience in high-stakes financial management and large-scale mergers, Ms. Perrotty brought a unique and pragmatic approach to healthcare leadership. 

She spoke to Becker's Hospital Review about the bold decisions that helped Tower Health recover from $440 million in losses, the strategies that empowered employees to drive financial and operational success, and the lessons health system leaders should take from banking's consolidation. She also shares her insights on the future of healthcare, the ongoing workforce crisis, and why collaboration — not competition — will define the next era of hospital sustainability.

Question: You recently announced your retirement as Tower Health CEO. What led to this decision, and how will you remain involved with the health system moving forward?

Sue Perrotty: We're in a transition. I will be retiring from my full-time CEO role but will remain on the boards of Tower Health and St. Christopher's Hospital for Children, which we own in a joint venture with Drexel University. In fact, I’ll be rotating in as chair of St. Christopher’s next year and joining both the Reading Hospital and St. Christopher's Foundation Boards. So, I'll still be actively involved with Tower Health hospitals as well as St. Christopher's.

Right now, we're in the process of searching for a new CFO. We're looking at what the future of healthcare holds and structuring ourselves accordingly. People often ask me, “Why are you leaving?” My response is simple — there's a right time to go, and a leader should know when that is. I was never meant to be the long-term CEO here. As we embark on a new three-to-five-year plan, I believe the leadership team driving that plan should be fully committed for the long haul. Since I won't be here for the full duration, I felt it was the right time to step back and let the team take full ownership.

Michael Stern has worked alongside me for years, and I remind people that he was the operational spark behind our turnaround. I handled the heavy lifting early on — the tourniquet work — while Michael knew how to perform the surgery. His leadership was instrumental in executing the operational turnaround.

Q. What are you most proud of during your time as Tower Health CEO? 

SP: I'm most proud of recreating the organization. Tower Health has always had a strong culture, but it went through an incredibly tough time. We were experiencing what I called a triple crisis:

  1. A crisis of care: The pandemic created massive uncertainty, not just in treating COVID-19 patients but in providing care for everyone and caring for each other.

  2. A crisis of capital: Financially, we were bleeding. At one point, we were losing $40 million a month, which was an urgent problem to solve.

  3. A crisis of confidence: There was a loss of trust in leadership.

I focused on restoring confidence because I wanted people to believe in our new leadership team. To be completely honest, there were plenty of people in healthcare scratching their heads, wondering, "What is she going to do?" But I knew my strength — I could lead our people. I never pretended to be a healthcare expert. What I do understand is financial architecture, debt structures and creditor relationships.

The first step was stabilizing our finances, ensuring we had a plan to restructure our debt. In my first six months as interim CEO, we explored potential buyers for Tower Health. When that process didn't yield a viable purchaser, many suggested we file for bankruptcy and let someone else take over the organization's assets. My response? Why would I do that just to give away the value we've built? Instead, we believed we could outrun our financial challenges — and we did.

I'm also proud of a program we implemented called WIGs — wildly important goals. Everyone knows what their WIGs are, but the concept was very specific: Can you execute this within 90 days in your department?

It was a department-level initiative in which staff could recommend changes they believe would make their jobs easier. You worked to implement them in 90 days. It created a new energy within the organization. Many times at the most junior level of an organization, employees think they can't change anything. We wanted our team to help us make positive changes.

The results were significant. Last year alone, WIG-driven initiatives contributed over $5 million in bottom-line savings. Departments took ownership of what they knew best and were empowered to act on it.

Q: Recent analyses from Kaufman Hall show that about 40% of hospitals are still losing money. What advice would you offer CFOs and CEOs struggling to steer their systems in the right direction? Are there one or two essential strategies they should focus on?

SP: I believe the most important thing is to teach everyone your numbers. If your people don't know the numbers, they can't help you achieve your financial goals. We spent a lot of time educating our teams. Everyone should know how they get paid. If you don't understand how your paycheck is issued, you don't really understand how the organization operates. 

By educating employees on financials and their impact, we unlocked a flood of ideas from the ground up. We empowered people at all levels to solve problems themselves, rather than waiting for leadership to step in.

I've always said this, and it's not always popular with CFOs: "If you don't get the people part right, it's nearly impossible to make everything else work." The most important language we speak is the people language — everything else follows from that.

I focused heavily on culture because I knew that if we could capture people's hearts, their heads would drive us in the right direction. But we had lost their hearts, and that was the hardest part — to rebuild trust.

I had to convince them:

  • You can trust us.
  • I will not surprise you.
  • Yes, some difficult decisions will be made, and they may impact people you care about — but we will always tell you in advance.

I often say, surgeons understand this — you sometimes have to remove a limb to save the body. It's painful, but necessary for survival.

Another major issue we cannot ignore is that we are entirely dependent on others. Healthcare is the only business model I know of where you are required to provide service to anyone who walks in the door — regardless of whether or not they can pay.

We don't know if, when, or how much we will be paid, and it won’t be your customer paying. I don't know another industry that operates with those dynamics. Solving this issue will require both the government and insurers to step up.

Q: Can you elaborate on teaching everyone your numbers? Who does that include? Are you focusing on department-level leaders, frontline staff, or the entire organization?

SP: Before I arrived, most people in the health system had never been asked to build a budget — budgets were developed at the top and pushed down. We flipped that. Now, budgets start from the ground up. Of course, there are still complex projections and market assessments at the top, but this shift created something remarkable.

Just last month, as I walked through the hospital, I saw something that made me incredibly proud — people love to tell me their numbers! And the fact that they even know their numbers in such a short time is amazing. But more than that, they embrace it. They think about it constantly.

I receive emails daily through my "Ask Sue" hotline, where anyone can ask me anything. Now, I get ideas all the time — Have you thought about this? Could we cut this cost? It's a cultural shift, and we were intentional about making it happen.

Many senior leaders were afraid to admit they didn't know how to build a budget, so we made it safe for them to raise their hands and ask for help. We brought in trainers and consultants to teach budgeting fundamentals — how to manage a budget, what levers they can control, and which factors are fixed.

Inside any company, it's easy to point fingers and say, “They're the problem.” I shut that down. It's easy to say, "Well, I didn't make the budget." But my response was, "No excuses. What's stopping you from meeting it? How can we help?"

Our approach shifted from blame to support — how can we help you reach the numbers? How do you fit into the bigger picture?

My advice has always been: Don't just tell people how to do something — tell them why it matters. When people understand why, they're far more open to learning how. If you start with how, they get stuck in the mechanics and miss the bigger purpose.

These are simple lessons I've learned over a lifetime that make a difference. And we implemented them all. We were willing to try anything.

Q: Last time we spoke, you drew interesting parallels between consolidation in the banking sector and what's happening now in the hospital market — particularly in Pennsylvania. What key lessons from your banking career do you think hospital leaders should apply to M&A strategies today?

SP: Right now, we're seeing serious financial struggles across the U.S., especially in Pennsylvania. Several major hospitals are failing, creating healthcare deserts — even in densely populated areas. The most visible example is Chester, just outside of Philadelphia. The key question is: "How do we save healthcare in these communities?"

From my time in banking, I learned that when institutions work together, they can create core infrastructure that benefits everyone. I've always believed that a rising tide lifts all boats — so we need to figure out how to control the tide and ensure it benefits all of us.

One thing that astounds me is how much wealth has been created on the backs of healthcare — without being reinvested into healthcare itself. If more of that wealth had been used to form strategic partnerships, struggling hospitals wouldn't be in such dire straits.

That's why I'm encouraged to see more collaboration happening now. We're seeing hospital groups band together to form infrastructure partnerships, which is brilliant.

In banking, big institutions had to become the back-end support for smaller banks, or else they wouldn't survive. The same needs to happen in healthcare. Larger systems don't need to be everywhere, but they can provide critical infrastructure to help smaller hospitals keep their doors open.

Know the difference between parity and differentiation.

  • Parity plays are things every organization must have to compete. In banking, this was the ATM network — it started as small, fragmented systems, but eventually, banks realized they needed a universal system. Now, ATMs are expected, not a differentiator.

  • Differentiators are what truly set you apart. And honestly, in healthcare, there aren't many true differentiators.

Quality of care matters, but how patients feel in a hospital matters just as much. I've visited many hospitals that were exceptionally well-run operationally, but they didn't feel that way.

That's what makes Tower Health different. When you walk into a Tower facility, it feels welcoming. Patients feel like they are cared for — like they're part of our family. It's not just about clinical excellence or efficiency and moving people through a system. It's about making them feel safe, valued and heard. That's what truly sets us apart.

Q: What are your predictions for the future of healthcare?

SP: I think we're in for a rough ride — a lot of change is coming, and it's going to happen fast. Technology will transform healthcare, but not in the ways people expect.

We'll see more self-service options, as patients want easier ways to connect with their providers. It's not just about hospital-at-home; it's about making care more convenient. People want simple solutions: "Can I manage my health through my computer? Can I track it on my watch? Can you make things easier for me?"

I believe these rapid changes will force us to rethink how we deliver care. But the biggest crisis in healthcare remains the shortage of healthcare workers. As our population ages and more people require care, we simply won't have enough doctors. That's a harsh reality.

So, how do we solve this? Again, I come back to collegiality. Wouldn't we be stronger if two or three hospitals in the same community could leverage the same physician infrastructure? We still need all the beds, but we could work better together. That's my parting challenge — finding ways to collaborate for the future.

Q. What are you most looking forward to in your next chapter as you transition out of the CEO role? 

SP: I'm lucky. I've had a great career, I've been successful, and I've had the privilege of choosing work that matters. I've made a lot of career changes in my lifetime, but I never retire from life — only from jobs. And when I leave one, I take the time to be still and listen for what's calling me next. Too often, people get noisy and panicky about what comes next. My advice? "Be quiet for a moment. You'll sense what's calling you."

I already know where I'm headed. The day after I step away, I'll be focusing my energy on causes that matter to me. St. Christopher's Hospital for Children is a passion of mine. It serves children living in poverty, and I want to help build a safety net around this amazing hospital.

I've also worked with the Boys & Girls Clubs of America for years. Locally, in Berks County, the organization has hit a rough patch, and I've jumped in to help stabilize it and get it back on track.

At this stage in my life, I'm not looking for a career — I'm looking to do good in the world. That's the choice I make, and I'm grateful to have the luxury to do so.

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