PHOENIXVILLE, PA — Tower Health recorded its first audited annual operating profit since its formation in 2017, but Phoenixville Hospital, the health system’s only remaining acute-care hospital in Chester County, lost $10 million during the same period, according to financial results reported by the Philadelphia Business Journal.
The health system generated an $8.5 million operating profit on $2.07 billion in revenue for the fiscal year ended June 30, 2026, reversing a $20.6 million operating loss in fiscal 2025.
The turnaround was driven primarily by Reading Hospital, which generated $212.2 million in operating profit, offsetting substantial losses at Tower’s suburban hospitals and physician-practice organization.
The audited results provide the first individual operating-loss figure for Phoenixville Hospital following Tower’s preliminary financial report in August, which showed an overall profit but did not detail the hospital’s standalone performance.
According to the Philadelphia Business Journal, Pottstown Hospital recorded a $36.7 million operating loss, while Tower Health Medical Group, the system’s physician-practice organization, lost $160.4 million.
Those losses underscore the financial challenges remaining within Tower despite its return to systemwide profitability.
Reading Hospital’s revenue increased 11% to $1.58 billion, up from approximately $1.42 billion a year earlier. Its financial performance was the principal contributor to the system’s positive operating result.
Tower’s total revenue increased approximately 2%, from $2.03 billion in fiscal 2025 to $2.07 billion in fiscal 2026.
The system attributed its improved financial position to expense reductions, restructuring at its suburban hospitals and increased revenue at Reading Hospital.
The $8.5 million operating profit represented an operating margin of approximately 0.4%, leaving the system’s overall profitability narrow relative to its revenue.
For Chester County, Phoenixville Hospital’s $10 million loss is particularly significant because the facility remains Tower’s only operating acute-care hospital in the county following the closures of Brandywine and Jennersville hospitals.
Tower’s preliminary August financial report showed that combined revenue at Phoenixville and Pottstown hospitals declined 8% during fiscal 2026, even as admissions at Phoenixville increased approximately 0.7%.
The newly audited results establish that Phoenixville remained unprofitable during the fiscal year, despite the broader system’s financial improvement.
The Philadelphia Business Journal’s reporting did not identify additional service reductions or staffing changes planned specifically for Phoenixville Hospital.
The audited financial statements also carry significance because Tower’s preliminary results for the previous fiscal year changed substantially during the auditing process.
Tower initially reported a $5.9 million operating profit for fiscal 2025, but subsequent adjustments produced an audited operating loss of $20.6 million.
The system attributed that reversal to increased medical-malpractice reserves and final adjustments involving patient accounts receivable.
For fiscal 2026, the completed audit confirmed the $8.5 million operating profit Tower had preliminarily reported in August.
The results mark a financial milestone for a health system that has undergone years of restructuring, hospital closures, asset sales and workforce reductions following its expansion in 2017.
Pottstown Hospital remains another source of financial pressure.
The hospital’s $36.7 million operating loss comes amid a restructuring program that has significantly reduced staffing and services.
Tower eliminated approximately 160 positions at Pottstown in July, representing roughly one-quarter of the hospital’s workforce, following another 130 job eliminations in late 2025.
The earlier restructuring included the closure of the hospital’s intensive-care unit, a medical-surgical nursing unit, an outpatient cancer-infusion center and an outpatient endoscopy suite.
Despite those reductions, Tower plans to invest more than $5 million in Pottstown’s emergency and behavioral-health services.
The financial results illustrate the different operating conditions across Tower’s facilities, with Reading Hospital generating sufficient earnings to absorb losses elsewhere in the organization.
Tower’s restructuring follows an expansion that began in 2017, when Reading Health System acquired five hospitals from Community Health Systems and established Tower Health.
Financial difficulties following that expansion contributed to the closures of Brandywine and Jennersville hospitals in Chester County.
Jennersville was subsequently sold to ChristianaCare, while Chestnut Hill Hospital was sold to a consortium led by Temple University Health System.
Tower is also continuing discussions with Jefferson Health about a potential clinical partnership involving specialty care and research.
Both organizations have maintained that the proposed relationship would not constitute a merger or acquisition and would not change Tower’s ownership, governance or daily operations.
Separate discussions remain underway concerning a possible alliance involving St. Christopher’s Hospital for Children, Jefferson Health, Temple University Health System and Nemours Children’s Health.
The St. Christopher’s financial results were not included among the individual hospital operating figures detailed in the Philadelphia Business Journal’s report.
Tower’s first audited annual operating profit demonstrates progress in its financial recovery, but the continued losses at Phoenixville and Pottstown hospitals show that profitability remains concentrated in Reading.
For Chester County, the financial performance of Phoenixville Hospital remains an important measure of the health system’s ability to sustain acute-care services in the region following its earlier hospital closures.
For additional details on Tower Health’s audited financial results and the operating performance of its hospitals, read the original reporting by John George in the Philadelphia Business Journal at https://www.bizjournals.com/philadelphia/news/2026/11/03/tower-health-profit-pottstown-phoenixville-2026.html.
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