Jefferson Health to lay off hundreds of workers this week

The second largest employer in the Philadelphia region expects to trim $300 million in expenses this year.

People walk by the hospital entrance.

The entrance to Thomas Jefferson University Hospital on South 10th Street. (Emma Lee/WHYY)

Jefferson Health told employees this week it would lay off 400 workers, roughly 1% of its workforce.

The jobs being eliminated are concentrated in corporate and administrative roles. Jefferson Health declined an interview for this story.

Jefferson Health’s CEO Joseph Cacchione said that the not-for-profit organization has been evaluating its operations for the past few months.

“This comes after also reviewing the organization for other operational changes that could be made to realize efficiency and savings and also eliminating a number of vacant positions,” Cacchione said in a statement.

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Jefferson Health has 42,000 employees and operates 18 hospitals across southeastern Pennsylvania and South Jersey.

“There are incredible financial pressures on health care and higher education organizations across the country,” he said.

For example, there are fewer patients being treated and generating revenue while there’s been double-digit increases to the cost of providing care. The layoffs and other cost saving measures are expected to save the health system $300 million annually.

“Our ability to be sustainable now and in the future is critical to serving all of our communities, including those with the most need but less access to high quality care,” he said.

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Jefferson Health has been expanding its footprint through acquisition in recent years, such as its merger with Abington Health in 2015 and its merger with Einstein Healthcare Network in 2021. That same year, Jefferson Health paid $305 million for a Medicaid and Medicare insurer Health Partners Plans.

In fiscal 2022, between Jefferson Health and Thomas Jefferson University, the organization had a net loss of $125.8 million on $8.1 billion in revenue.

In March, the hospital system’s CEO estimated it would be $80 million in the red by the end of this year.

During the first nine months of fiscal 2023, Jefferson had a $117.5 million operating loss.

It’s not the only health system in the Philadelphia region to struggle since the COVID-19 pandemic either. Temple University Health System had a$54 million loss in the first nine months of fiscal 2023.

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