Tower Health CEO to step down

Feb. 22—Tower Health announced Monday that President and CEO Clint Matthews will step down.

West Reading based Tower said in a news release that Matthews is retiring this week after 10 years as CEO. Matthews is 67. Details of the circumstances surrounding the announcement were not made public.

The move comes as the hospital system tries to right its finances after three years of rapid growth followed by losses from the coronavirus pandemic.

P. Sue Perrotty, 67, retired bank executive and community leader, has been named interim president and CEO of Tower Health. Perrotty has been a member of the Tower board since July 2019.

"During Clint's tenure, Tower Health has become a health care leader focused on improving the health of communities throughout the Reading and greater Philadelphia region," said Tom Work, chairman of Tower's board of directors. "The board thanks him for his service.

"Sue has built an incredible reputation as a dynamic leader with compassion and integrity. Having served on our board since 2019, she uniquely understands our organization and path forward."

Tower has scheduled a private update with bond investors next week.

Tower posted operating losses for fiscal year 2020 of almost $400 million, which triggered bond rating downgrades. The bond rating agencies also revised West Reading-based Tower's outlook to negative on the hospital system's $1.3 billion of long-term debt.

System expanded

Matthews led Reading Hospital through a rapid expansion and the acquisition of several Philadelphia area hospitals to become Tower Health.

It paid $423 million to acquire five hospitals and associated assets from Community Health Systems in 2017. Reading Health System purchased Pottstown Memorial Medical Center, Pottstown; Brandywine Hospital, Coatesville; Phoenixville Hospital, Phoenixville; Jennersville Regional Hospital, West Grove; and Chestnut Hill Hospital, Philadelphia.

In 2018, it purchased a chain of urgent care facilities for $24 million. Tower views the facilities as a key driver in its system and is evaluating closing ones in part based on location, executives told investors.

In December 2019, Tower paid $29 million toward the $58 million price of St. Christopher's Hospital for Children in partnership with Drexel University in Philadelphia.

Tower Health also operates Reading Hospital Rehabilitation at Wyomissing; Reading Hospital School of Health Sciences in West Reading; home health care services provided by Tower Health at Home.

Through the expansion Tower has struggled to gain financial footing, a situation exacerbated by the COVID-19 pandemic.

The board sold 23 properties last summer as part of a sale-leaseback and is discussing closing or selling some of its hospitals.

The agencies said the losses resulted from underlying operating issues that were further exacerbated by the COVID-19 pandemic.

Matthews retirement follows the recent departure of the system's CFO Gary Conner, who has been replaced by interim CFO James Gravell and Doug Fenstermaker of Warbird Consulting Partners, a national health care consulting firm based in Atlanta. The firm was hired late last year to turn around the financially struggling health system.

Matthews was named interim CEO of Reading Hospital in May 2010, according to Reading Eagle archives. Along with James L. Rosenberg, Matthews filled the vacancy of hospital President and Chief Executive Officer Scott R. Wolfe, who resigned. Matthews had been interim chief executive officer at Southern Regional Health System in Riverdale, Ga.

Matthews, along with Therese Sucher, chief operating officer, and Richard W. Jones, chief financial officer, were hired through FTI Consultants, Brentwood, Tenn. Tower tax records show FTI was paid more than $7 million for their services.

Matthews left FTI and became Reading Hospital CEO in January 2012.

A graduate of the University of Texas Health Science Center nursing program, he has a master's degree in health care administration from Texas Woman's University.

Perrotty's background

Perrotty brings decades of leadership experience in the banking and finance industries to her new role, Tower said in its announcement.

Over the course of her career, Perrotty has overseen multibillion-dollar corporate integrations, managed several mergers and advised businesses of all sizes in the Reading community, Philadelphia and beyond.

She is a noted expert on corporate governance and serves as an independent director of several businesses, including the publicly traded Global Net Lease Inc. (NYSE: GNL).

"I am honored to have been given this responsibility as we collectively chart a smart future for Tower Health," Perrotty said in a news release. "As we move forward, I want to focus on listening to members of the clinical, support and administrative teams — the people that make Tower Health such a special place.

"In the weeks and months ahead," she said, "we'll be guided by our commitment to our mission of providing high-quality and affordable care to the communities we all call home."

After a 27-year career in banking, culminating as executive vice president and head of global operations for First Union Corp., Perrotty retired from the industry and went on to serve as chief of staff to Pennsylvania first lady, Judge Marjorie Rendell.

"Sue is a born leader who possesses a rare capacity for synthesizing facts and problem-solving, with an analytical ability second to none," Rendell said. "She is also a keen listener with excellent people skills. I was fortunate to have her as my overqualified chief of staff, and she remains my go-to source of advice and counsel to this day. I see her as the perfect person for this position."

"Sue has the unique ability to empower those she works with to think big and achieve things they never would have thought possible," Samuel McCullough, former CEO for nearly 20 years of Meridian Bank and current chairman, president and CEO of Griffin Holdings Group LLC, said in a news release. "Combined with her listening and tremendous people skills, she makes great things happen.

"When we worked together, she was instrumental to our growth and success, and she remains a trusted confidant. Simply put, she always gets the job done and makes those around her better."

An active member of the community, Perrotty has led boards and capital campaigns for Albright College, her alma mater, as well as the United Way of Berks County, the Olivet Boys and Girls Club and the Berks County Community Foundation.

Kevin Murphy, president of the Berks County Community Foundation, said Perrotty has unique qualifications in dealing with distressed organizations.

"She certainly understands how to turn operations around," Murphy said. "I'd put her in charge of anything. She cares about the community deeply and has deep knowledge of the region."

Perrotty has also been recognized among Pennsylvania's 50 Best Women in Business and as an Outstanding Philanthropist by the Association of Fundraising Professionals' Berks Regional Chapter.

Perrotty, along with her husband, Craig, recently led the United Way of Berks County's 2020 fundraising campaign to reach its $10 million goal.

More coverage

— Tower Health executives to take pay cuts

— Tower Health CEO tells staff no decision in sale of hospitals

— Tower Health might sell off hospitals in 2021; except for the 'mothership' of Reading Hospital

— Rating agency says Reading Hospital is the only profitable part of Tower Health system

— Agencies downgrade Tower Health to junk bond status

— Tower Health posts loss of $246 million in three months of the coronavirus pandemic, $378 million for the fiscal year

— Tower Health fights to weather the pandemic storm