January 26, 2024
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Penn Medicine will not move forward with plans to buy Brandywine Hospital from Tower Health. The Coatesville facility, closed since 2022, had been slated to be repurposed as a Veterans Affairs health center.
Penn Medicine will no longer pursue acquiring Coatesville's Brandywine Hospital to repurpose the facility as a center for Veterans Affairs services in Chester County, officials said Friday.
Last year, Penn Medicine said it planned to purchase the 171-bed hospital from Tower Health as part of an agreement with the VA to develop new facilities in the Philadelphia region. The hospital was shut down in January 2022 as Tower Health began downsizing its system to overcome financial struggles.
"After an intensive due diligence process, we have determined that we would be unable to build out the infrastructure for the project in the space available on the Brandywine campus and will terminate our letter of intent with Tower to purchase the property," Penn Medicine spokesperson John Lines said Friday.
Penn Medicine is now working to find another nearby location in Chester County for the VA facility. The project remains "of vital importance" to veterans in the region, Lines said. The Coatesville VA Medical Center was built in 1930 and was identified by the agency as one of the sites it may look to close in the future.
A Tower Health spokesperson said Friday the Brandywine campus previously had received interest from a variety of organizations exploring a purchase before Penn Medicine signed a letter of intent to buy it last June.
"We will reengage in discussions with these companies, along with others, to secure a new owner for the property," the Tower spokesperson said.
In Philadelphia, Penn Medicine has provided care to veterans at the VA Medical Center in University City since 1948. That facility has more than 100 faculty members with dual VA appointments, with specialities including sleep health, mental health, cancer care and regenerative and genomic medicine.
The plan to purchase the Brandywine campus emerged out of the passage of the federal Promise to Address Comprehensive Toxics Act, which permitted the VA to enter agreements with academic institutions to provide expanded veterans care in their surrounding regions.
Penn entered agreements with the VA last year to shift some of the Coatesville services out of the existing facility. The plan was to use the Brandywine campus as a site for outpatient, acute mental health and long-term care. In a separate agreement, Penn Medicine partnered with the VA to explore the development of new facilities in West Philadelphia.
In recent years, the VA has pushed for a major restructuring of its nearly 1,300 U.S. hospitals and clinics, many of which no longer meet design standards for modern health care.
Both the Coatesville VA Medical Center and the VA Medical Center in University City were identified as aging buildings that would eventually be closed under a proposed reorganization plan. Federal lawmakers tabled the VA's initiative over concerns about the agency's assessment and the changing needs of veterans as a result of the COVID-19 pandemic.
The VA's plans had included the possibility of replacing the Coatesville location with an outpatient center and constructing a new hospital in King of Prussia. A report from the agency said the Coatesville VA Medical Center would need about $120.8 million in upgrades to remain in future operation.
Penn Medicine officials said the health system plans to honor its agreements with the VA.
"We will continue to work closely with community stakeholders to listen to their ideas and feedback and share plans as these efforts continue," Lines said.
Earlier this month, the health system announced plans to acquire Doylestown Health in a deal that would make the Bucks County hospital Penn Medicine's seventh.
Brandywine Hospital owner Tower Health formed out of the Reading Health System in 2017 with the acquisition of five hospitals in the Philadelphia area. The deal put the health system under heavy financial strain, resulting in the closure and sale of several of those properties.
Jennersville Hospital in West Grove, Chester County was shut down in late 2021. It was later acquired by Delaware-based ChristianaCare to be reopened as a micro-hospital.
Tower Health also sold Chestnut Hill Hospital to a consortium of Temple Health, Redeemer Health and Philadelphia College of Osteopathic Medicine in 2022. Tower Health still owns the 144-bed Phoenixville Hospital and the 219-bed Pottstown Hospital.
