Jefferson Health Posts $201M Operating Loss in 2026 Fiscal Half

Jefferson Health reported an operating loss of $201 million for the six months ending December 31, up from a $55 million loss during the same period in the previous year, according to a statement released to bondholders on Friday by the non-profit health system.

A $201 million loss comprised a $64.7 million restructuring expense associated with employee termination costs for600 to 700 employees were let go in Octoberand additional modifications aimed at enhancing efficiency within the 32-hospital network that spans from South Jersey to Scranton.

Minus the restructuring costs, Jefferson reported an operating loss of $136.3 million during the first half of fiscal year 2026.

Jefferson mentioned in a statement that the organization is still dealing with substantial financial challenges, similar to health systems across the country, pointing to increasing drug expenses.

The health system's chief financial officer, Michael Harrington, stated, 'We continue to concentrate on improving efficiency, promoting reimbursement rates that more accurately represent the actual cost of care in Pennsylvania, and supporting the long-term sustainability of our academic health system.'

Here are some details:

Revenue:Patient revenue approached $6 billion during the first half of fiscal year 2026. The number from the prior year is not comparable since it did not encompass Lehigh Valley Health Network for the entire six months.Jefferson acquired the system on Aug. 1, 2024.

Jefferson's total revenue amounted to $8.6 billion, which incorporated $145.9 million in investment income that directly increased operating income. Companies that apply health-system reporting standards do not factor in investment income as part of their revenue. Jefferson, however, adheres to guidelines used in higher-education reporting.

Insurance business: Jefferson recognized progress in its health insurance divisionJefferson Health Plans reported a loss of $90.7 million for the six months ending December 31, down from a $118.5 million loss during the same period in the previous year. The number of individuals covered by the plans increased to 371,005 from 359,662. Most of this enrollment consists of Medicaid beneficiaries.

Notable:In December and January, both Moody’s Ratings and Standard & Poor’s Ratings Service updated their outlook for Jefferson to negative, indicating that the agencies might lower the organization's credit rating if its financial situation does not show improvement within the next two years.

"The pessimistic view highlights the extent of present operational losses along with expected challenges in achieving or approaching operational profitability over the next few years," Standard & Poor's stated.

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