Why is Tower Health adding urgent care centers amid financial struggles?

May 24—Even as the pandemic sent a shock through Tower Health's shaky finances, the West Reading-based health system continued to open more urgent care centers.

Since it announced layoffs of 1,000 employees in June, Tower has opened seven new urgent care centers in Chester, Montgomery and Berks counties.

The most recent opening in Hamburg follows Tower's restructuring of its physician practices, Tower Health Medical Group, affecting nearly 200 doctors and other staff. The consolidation is expected to improve Tower's financial performance by $70 million by the end of June.

All told Tower now operates 28 urgent care facilities. It is one of the largest urgent care groups in southeastern Pennsylvania.

Doesn't all that cost money, too?

In short, Tower says its part of a strategy to grow.

"The opening of Tower Health Urgent Care — Hamburg was a mission-based decision to fulfill our commitment of taking care of the communities we serve while providing improved access to care," Tower said in an email statement. "The planning and construction of the facility was planned and launched prior to the COVID-19 pandemic and is part of a long-term growth strategy."

Interim President and CEO P. Sue Perrotty said in an April interview that she is focused on stabilizing losses in the system and enabling it to compete in the changing health care landscape in the next five to 10 years.

Tower consists of seven hospitals in Philadelphia, Chester, Montgomery and Berks counties, with Reading Hospital as its anchor.

In addition to the medical group and urgent care centers, it owns a home health care agency and ambulance service and has joint partnerships, including a behavioral health facility and medical school.

With $1.5 billion in bond debt, Tower has seen its financial footing deteriorate through the pandemic. Most recently, two bond agencies downgraded its bonds to junk status.

In April it received a second round of bids for the system. Perrotty said the process would take 90 to 120 days.

Shortly after Reading Hospital acquired five hospitals for $418 million in 2017 to form Tower Health, Tower jumped into the urgent care business.

In 2018 Tower acquired 19 urgent care locations from Exton-based Premier Urgent Care for $24.3 million, according to an independent auditor's report.

"Since the acquisition, we have consolidated operations with our Berks County Tower Health Medical Group urgent care sites, and we have added new locations in communities that were identified as needing increased access to Tower Health services," Tower said in an email statement.

Tower sees "a growing need in the Hamburg community for immediate access to high quality health care, and Tower Health is working to meet that need, offering consumers convenience and care after traditional office hours."

Tower's urgent care sites are open every day from 9 a.m. to 9 p.m.

Tower is not the only health care provider noticing the need.

Not too far from the new Tower Hamburg urgent care off Interstate 78 is a medical practice connected to Lehigh Valley Health Network and St. Luke's Health Center that offers services similar to an urgent care.

Tower said Reading Hospital currently serves many patients in that market and these individuals currently do not have an in-network urgent care center near their home or work.

Moves in Exeter

Meanwhile in Exeter Township, Tower's Quick Care moved to a new location this month and became a full-service Tower Health Urgent Care site.

The move to the Exeter Commons shopping center was planned before the pandemic. Tower says it wants to draw patients from Reading, Birdsboro, Shillington and beyond. BARTA Route 8 serves the new urgent care.

"Demand for urgent care services in the greater Exeter area is very high," Tower said. "Even without onsite imaging, the Exeter QuickCare treated more than 10,000 patients per year in the two years prior to COVID."

Tower said the move allows that site to become a full-service urgent care center complete with radiology services. In addition, Tower said the new Exeter center is double the size of the previous location to meet patient demand.

Benefits to the patients include increased convenience and accessibility due to on-site radiology, a more central location, ample parking and a larger practice location in a brand-new facility, Tower said.

Battle for patients

Urgent cares can attract new patients to the health system, and hospitals and health systems are turning to them as an avenue for growth.

There were 10,419 urgent care locations in the U.S. as of the end of April. That number has increased an average of about 10% year over year for the past five years, said Lou Ellen Horowitz, chief executive officer of the Urgent Care Association.

Hospital- and health-system-owned urgent care centers had been growing the most before 2020, she said.

In 2019, hospital-owned joint ventures made up 40% of urgent care owners and that has likely grown, Horowitz said.

Tower sees linking patients to other services as good health care as well as good business.

"Our electronic medical record allows us to link patients with a full range of primary care and specialty physicians and ancillary services to provide continuity of care which improves patient safety," Tower said in an email statement. "We also hope that the convenience of these locations and additional services that they provide bring new patients to our health system.

"Urgent care centers provide a whole array of services that are supplementary to primary care, such as sports physicals, lab and radiology, wound care, COVID-19 testing, driver's license medical testing, etc."

Urgent over primary?

Is urgent care supplanting primary care?

That's complicated.

"Research tells us that there is a percentage of consumers who prefer to use urgent care centers or virtual urgent care," Tower said in an email. "For these patients, having an electronic health record that captures a longitudinal view of their injuries, illnesses and interventions is especially important. The staff at our urgent care centers are trained to ask about the patient's usual care team and to offer to link patients with a primary care provider (PCP) if they do not have one.

"If they do have a PCP, the electronic health record allows the urgent care providers to give feedback to the patient's PCP and other health care providers about treatment received in our urgent care centers."

Nationally, more people have been turning to urgent cares to be cared for by medical professionals such as nurse practitioners or physician assistants. Urgent cares have been expected to take the strain off hospital emergency rooms and save money, but a study by the University of Pennsylvania released in April in Health Affairs says urgent care centers increase the number of people seeking care but pose risks to patients and lead to increased costs.

Across the 12 years of the study period, researchers found that by 2019, the opening of an urgent care center led to a decline in the number of lower acuity emergency room visits, and that these visits were about 10 times more expensive than urgent care center visits.

Researchers found that the number of urgent care visits needed to deter a single emergency room visit was high: an increase of 37 urgent care center visits was associated with the substitution of a single lower-acuity emergency room visit.

The authors said in a news release that cost saving shouldn't be the only factor considered when determining where and how to access care.

The authors note that the availability of urgent care centers, when combined with other interventions — like telemedicine, primary care, or changes to benefits — could be effective in augmenting the substitution ratio.

The clinical benefit of these additional visits to unscheduled care requires further research, as does the impact and role of telemedicine, according to senior author Dr. Ari Friedman of the Perelman School of Medicine at the University of Pennsylvania.