Thomas Jefferson University reported a $195.5 million loss for fiscal 2025
Most of the loss came from Jefferson Health Plans, which has a big Medicaid business. That sector has seen widespread losses.
Thomas Jefferson University had a $195.5 million operating loss in the year that ended June 30, a sharp swing from a $1.3 million operating profit a year ago, according to a report to municipal bondholders Friday.
Jefferson CEO Joseph G. Cacchione called the loss “sobering” in an email to employees.
Most of the fiscal 2025 loss came from a $169.9 million deficit in Jefferson’s insurance business, which is mostly Medicaid. The statement to bondholders said the insurance loss was driven by the cost of GLP-1 drugs for diabetes and weight loss as well as higher medical expenses.
Excluding the insurance business, the nonprofit health system’s operating loss was $25.6 million.
“Like many health systems across the country, we continue to face significant industry headwinds, including rising costs for labor, pharmaceuticals, and supplies outpacing revenue,” Mike Harrington, Jefferson’s new chief financial officer, said in an email to The Inquirer.
“We continue streamlining our operations, finding efficiencies, optimizing our care footprint, and investing in technologies that enhance care and reduce costs,” he said.
The report includes 11 months in which the health system’s operations include the Lehigh Valley Health Network. Jefferson acquired Lehigh last August in a deal that expanded Jefferson’s network to more than 30 hospitals stretching from South Jersey to near Scranton.
Here are some details:
Revenue: Jefferson reported $15.8 billion in revenue, up 9% from $14.5 billion for the combined operations of Jefferson and Lehigh last year. Patient revenue, including 11 months of Lehigh, was $11.5 billion. In fiscal 2024, the two systems had a combined $10.9 billion in patient revenue.
Tuition and fees from Jefferson’s educational programs, including its Sidney Kimmel Medical College, rose 3.3% to $235.5 million.
Jefferson’s biggest revenue gain came in a category described as “other.” Other revenue soared 59%, or by $458 million, “mainly due to higher ambulatory pharmacy revenue,” the bondholder disclosure said.
Investment income reported as operating revenue climbed about 19% to $270.6 million from $227.9 million. Because Jefferson’s financial reports follow the rules for higher education institutions, they include investment income as part of revenue. That translates to higher operating income. That’s not the case for competing health systems, such as Main Line Health.
Expenses: Jefferson Health Plans, known as Health Partners Plans before Jefferson bought Temple University Health System’s share in 2021, had a 17.9% increase in expenses for medical and pharmaceutical claims, compared to a 2.8% increase in premiums. That drove the unit’s swing to a loss from a $100 million gain the year before.
Notable: The amount of cash and other financial reserves at Jefferson fell to the equivalent of 114 days on June 30, compared to 140 days the year before, largely because of an increase in expenses. That measure, known as days cash on hand, is one of the factors credit ratings agencies are looking at as they do their annual review of Jefferson’s rating.