Thomas Jefferson’s fiscal 2023 loss was $231 million, excluding money from selling businesses

Thomas Jefferson University’s operating loss deepened to $231 million in the 12 months that ended June 30, compared with a loss of $158 million the year before, the Philadelphia not-for-profit owner of Jefferson Health reported Monday.

Those figures are adjusted to exclude proceeds from the sales of businesses. Including $153 million in proceeds from the sale of three businesses, the organization’s loss was $79 million in fiscal 2023, an improvement over the previous year’s loss of $126 million.

Like other health systems, Jefferson is contending with significantly higher costs for labor, drugs, and other supplies, as fewer people have to spend time in hospitals.

Jefferson has the added challenge of trying to eliminate inefficiencies in a system that exploded in size between 2015 and 2021, from a three-hospital system to one with 18 hospitals, including specialty hospitals in joint ventures. Jefferson at the end of June closed one of the acquired acute-care hospitals, Einstein Medical Center Elkins Park, to allow neighboring MossRehab to expand.

Last month, Jefferson laid off about 1% of its workforce and eliminated an unspecified number of vacant positions. “One of the reasons we are at an inflection point now is that we have never rationalized the size of our workforce through four significant mergers,” Jefferson CEO Joseph G. Cacchione wrote in an internal message to employees.

The health systems Jefferson acquired were Abington Health, Aria Health, Kennedy Health System, and Einstein Healthcare Network. The organization also acquired Health Partners Plans, a Medicaid and Medicare insurer now called Jefferson Health Plans, as well as Philadelphia University and Magee Rehabilitation Hospital.

The businesses Jefferson sold since July 1, 2022, were a laboratory business ($108 million), 51% of its interest in Delaware Valley Accountable Care Organization ($25 million), and a noncontrolling interest in mammography business ($19.7 million).

When Moody’s Investors Service in March downgraded Jefferson’s credit rating, the credit-ratings agency said it expected Jefferson to sell businesses to raise money. Jefferson’s financial reserves, measured by the number of days it could continue paying expenses, amounted to 151.5 days, down from more than 200 before the pandemic.

Jefferson’s revenue totaled $9.7 billion in the 2023 fiscal year, up from $7.9 billion the year before. Einstein and Health Partners, which were acquired in the fall of 2021, account for most of the $1.8 billion increase.

Inpatient admissions in fiscal 2023 climbed 5.5%, to 152,849, largely thanks to the Einstein acquisition, Jefferson said. The same dynamic was true for outpatient visits. Jefferson posted a notable 7.9% decline inpatient surgeries.

Like other health systems, Jefferson is seeing government COVID-19 aid dwindle. Jefferson’s COVID support fell to $48.6 million in fiscal 2023 from $159.3 million the year before.