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June 28, 2023

Penn Medicine to acquire shuttered Brandywine Hospital from Tower Health

The Coatesville hospital closed 18 months ago along with Jennersville Hospital, limiting access to medical services in Chester County

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Brandywine Hospital Sale Street View/Google Maps

Penn Medicine will acquire Brandywine Hospital in Coatesville from Tower Health. The hospital has been closed since January 2022.

Penn Medicine is poised to acquire Brandywine Hospital from Tower Health, reaching a deal to take over the Coatesville facility, which closed 18 months ago due to mounting financial trouble.

Chester County Commissioners Marian Moskowitz, Josh Maxwell and Michelle Kichline issued a statement Tuesday night sharing optimism about the future of the 171-bed hospital, which was shuttered along with Jennersville Hospital in West Grove.

"We are pleased that Tower Health has agreed to sell the former Brandywine Hospital to Penn Medicine," the commissioners said. "Penn Medicine already provides top hospital and health care services in Chester County, and the expansion of that investment to the Coatesville and surrounding area is tremendous news."

A Tower Health spokesperson confirmed that a letter of intent has been signed to sell the 85-acre campus to Penn Medicine, calling the anticipated deal "a very positive outcome" after previous efforts to sell the property failed to move forward.

"We wish our colleagues at Penn Medicine great success," the spokesperson said. 

It's unclear how soon a completed deal between Tower Health and Penn Medicine could result in the reopening of Brandywine Hospital and how its services would differ from the last time it operated.

Penn Medicine could not immediately be reached for comment. 

The closures of Brandywine and Jennersville hospitals put a strain on Penn's Chester County Hospital in West Chester and Main Line Health's Paoli Hospital. Emergency services have operated with delays and ambulances have had longer distances to travel in Chester County.

"From the time Tower Health closed Brandywine and Jennersville hospitals 18 months ago, we have focused on replacing the lost services with better services, to provide greater care for southern and western Chester County residents," the commissioners said.

Tower Health, based in Berks County, closed the hospitals in response to financial losses in the years after it acquired them from Community Health Systems as a part of five-hospital deal in 2017. The two hospitals lost more than $42 million in the last fiscal year before their closures and had accounted for just 9% of Tower Health's inpatient admissions between April and June 2021. 

Together, the Chester County hospitals employed about 800 workers and had approximately 200 beds. 

In November 2021, Tower Health reached a tentative deal to sell both hospitals to Canyon Atlantic Partners, a company that specializes in hospital ownership and management organization. Tower terminated the deal a month later, citing doubts about Canyon Atlantic's ability to effectively operate the two hospitals as acute care facilities. Canyon Atlantic ultimately ended its pursuit to reopen the hospitals in March 2022 following a months-long court battle.

Jennersville Hospital was acquired in June 2022 by Wilmington-based ChristianaCare, which plans to reopen the hospital next year.

Like many health systems, Tower has struggled with losses at its facilities and has long-term liabilities of nearly $2.2 billion, the Philadelphia Business Journal reported. The health system posted a loss of about $195 million in the last fiscal year. 

In recent years, Penn Medicine and Tower Health had explored entering a strategic alliance, but they abandoned those plans earlier this year.

Tower Health still operates Phoenixville Hospital in Chester County and has hospitals in Reading and Pottstown. It operates St. Christopher's Hospital for Children in Philadelphia in a partnership with Drexel University.

The Chester County commissioners said Penn Medicine's decision to purchase Brandywine Hospital was spurred by a new partnership between Penn Medicine and the Coatesville VA Medical Center, which had been in danger of a potential closure. The details of that partnership are still being developed.

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