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Tower Health won't sell hospitals, pursues alliance with Penn Medicine

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West Reading, Pa.-based Tower Health plans to remain independent and has signed a letter of intent to develop a strategic alliance with Philadelphia-based Penn Medicine, the system announced July 30. 

Since last year, Tower has been exploring the sale of individual hospitals or the entire system. The system began looking for a buyer amid financial challenges tied to the 2017 acquisition of five hospitals and the COVID-19 pandemic. 

Tower, a seven-hospital system, said it now plans to remain independent as it works to improve its financial and clinical operations. Instead of a merger or sale, it is establishing an affiliation steering committee with Penn Medicine. The committee, which will have equal representation from both systems, will spend six months evaluating potential areas of collaboration. 

"From our board to our dedicated physicians, caregivers and administrative and support staff, everyone at Tower Health has worked incredibly hard to achieve this positive milestone," Tower President and CEO P. Sue Perrotty said in a news release. "This marks just the beginning of the next chapter of Tower Health as we remain steadfast in implementing our ongoing turnaround initiatives."

Tower said it is seeing financial performance improve as patient volume returns to levels before the pandemic. The system had operating losses of more than $415 million in fiscal year 2020.

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