Financial Progress at Thomas Jefferson University and Jefferson Health: Operating Loss Sharply Lower in First Half of Fiscal 2024

In a recent financial report released on Wednesday, Thomas Jefferson University and Jefferson Health revealed a significant decrease in operating losses for the first half of fiscal 2024 compared to the previous year. The health system, which is the largest in the Philadelphia region in terms of the number of hospitals, reported an operating loss of $48.7 million for the six months ended Dec. 31, down from $83.4 million the year before. This improvement was attributed to a substantial decline in expenses for contract labor and a strong demand for inpatient services.

According to Jefferson’s chief financial officer John Mordach, the health system is on track towards continued financial health and is aiming to reach break-even by the end of the fiscal year in June. In order to achieve this goal, Jefferson will need to generate enough profits in the second half of the fiscal year to offset the losses incurred in the first six months.

One positive indicator of financial progress for Jefferson is the absence of unusual items that boosted results in the previous fiscal year. Last year, the health system benefited from business sales and COVID-related government aid, which helped mitigate its losses. This year, Jefferson made changes to how it accounts for property depreciation and did not provide details on any one-time gains in its financial report.

Additionally, Jefferson implemented cost-saving measures, including job cuts in July, which resulted in a reduction in the number of full-time employees. The health system also significantly decreased its spending on contract labor, particularly for nurses, which contributed to the improved financial results.

In related news, Lehigh Valley Health System, with which Jefferson has a tentative agreement to acquire, also reported its financial results for the same period. The nonprofit organization based in Allentown posted a $37 million operating loss on $2.1 billion in revenue, compared to a $32 million loss on $2 billion in revenue the previous year. Lehigh Valley implemented job cuts last fall, including layoffs and the elimination of vacant positions, in an effort to reduce expenses.

If the acquisition of Lehigh Valley Health System is completed, it will create a 30-hospital system spanning from Scranton to South Jersey. This merger has the potential to further strengthen Jefferson’s position in the healthcare industry and expand its reach in the region.