Jefferson Health reported a $201 million operating loss in the first half of fiscal 2026

Jefferson Health had an operating loss of $201 million in the six months that ended Dec. 31, compared to a $55 million loss the year before, the nonprofit health system said in a notice to bondholders Friday.

The $201 million loss included a $64.7 million restructuring charge related to severance for 600 to 700 people laid off in October and other changes designed to improve efficiency in the 32-hospital system that stretches from South Jersey to Scranton.

Excluding the restructuring expenses, Jefferson’s operating loss was $136.3 million in the first half of fiscal 2026.

Jefferson said in a statement that it continues facing significant financial headwinds, like health systems nationwide, citing rising pharmaceutical costs.

“We remain focused on driving efficiency, advocating for reimbursement rates that better reflect the true cost of care in Pennsylvania, and advancing the long-term stability of our academic health system,” the health system’s chief financial officer Michael Harrington said.

Here are some details:

Revenue: Patient revenue reached nearly $6 billion in the first half of fiscal 2026. The figure for the previous year is not comparable because it does not include Lehigh Valley Health Network for the full six months. Jefferson acquired the system on Aug. 1, 2024.

Jefferson’s total revenue of $8.6 billion included $145.9 million of investment income that directly boosted operating income. Competitors who use heath-system reporting rules do not include investment income in revenue. Jefferson, by contrast, follows rules for higher-education reporting.

Insurance business: Jefferson noted improvement in its health insurance arm. Jefferson Health Plans’ loss in the six months ended Dec. 31 was $90.7 million, compared to a $118.5 million loss in the same period the year before. The number of people insured in the plans climbed to 371,005 from 359,662. Medicaid recipients account for most of that enrollment.

Notable: Both Moody’s Ratings and Standard & Poor’s Ratings Service in December and January revised their outlooks on Jefferson to negative, which means the agencies could downgrade the organization’s credit rating if Jefferson’s finances don’t improve over the next two years.

“The negative outlook reflects the magnitude of current operating losses as well as anticipated difficulties in returning to or near operating profitability for several years,” Standard & Poor’s said.