Jefferson Health is outsourcing back-office jobs

Jefferson Health, the Philadelphia region’s biggest health system by number of hospitals, is outsourcing an unspecified number of back-office jobs to save money, the nonprofit confirmed Thursday.

“Following a thorough review, we are transitioning a limited number of non-patient facing administrative functions to an external partner to enhance efficiency,” Jefferson said in an emailed statement. “We are providing resources to support impacted colleagues who do not secure new roles within the organization.”

Jefferson also declined to say what company it hired to provide the back-office support. Such services typically focus on insurance pre-authorizations, billing, and collecting payments. The whole process from the registration of patients to bill collection is called revenue cycle management.

When Tower Health hired an outside company last year to work with patients’ insurance companies and to collect payments, the change meant that 675 Tower employees went to work for Ensemble Health Partners.

Following a rapid expansion though acquisitions, Jefferson has been tweaking its operations in a bid to make them profitable. It also entered into joint ventures for laboratory services, home care, and mammography to raise money.

Last year, Jefferson centralized some of its patient scheduling and appointment functions. That reorganization reduced the number of managers, but not the overall number of jobs, a Jefferson spokesperson said last summer.

Jefferson had just shy of 5,000 corporate employees on Sept. 30, down from 5,248 on June, 30, 2023, right before it announced a 1% workforce reduction, with most jobs in corporate and administrative functions. Both of those figures are adjusted to account for part-time employees.

In November, Jefferson postponed annual pay raises for more than 42,000 employees in the Philadelphia region from January to July. Jefferson said the move was designed to match annual salary increases to its fiscal year, which starts July 1. But the move will also boost the nonprofit’s bottom line in its first year owning Lehigh Valley Health Network. That deal closed in August.

Jefferson’s operating loss in the three months that ended Sept. 30 was $90.5 million, including Lehigh Valley. The 32-hospital system, which stretches from northeastern Pennsylvania to South Jersey, reported $3.73 billion in revenue, up 10% from $3.39 billion a year ago.