Thread regarding Thomas Jefferson University Hospital layoffs

Jefferson Health, the Philadelphia region's largest health system and second largest employer, announced Monday it is trimming its workforce by 1%, or roughly 400 employees.

The reductions are focused largely on corporate and administrative roles within the system, which has 42,000 employees and operates 18 hospitals in southeastern Pennsylvania and South Jersey.

Joseph G. Cacchione, Jefferson's CEO, said in a statement that the health system has spent the past few months "thoughtfully and comprehensively evaluating our operations to ensure that our services meet the evolving needs of our patients, students, members and communities in this new era of health care and higher education."

He said the decision to enact layoffs came after reviewing the organization for other operational changes that could be made to realize efficiency and savings and eliminating an undisclosed number of vacant positions.

"This decision was not made lightly, and Jefferson is not alone in needing to make this challenging choice," Cacchione said. "As has been widely reported, there are incredible financial pressures on health care and higher education organizations across the country. There are decreased patient volumes at the same time as double-digit increases to costs, and the economic models that support many payer-provider relationships do not yet reflect all the ways the environment is changing.

"Our ability to be sustainable now and in the future is critical to serving all of our communities, including those with the most need but less access to high quality care. … We are focused on continuing efforts to optimize and integrate our operations in ways that allows us to stay true to our focus on quality patient care, education, research, safety and health equity."

Jefferson said by enacting the layoffs and not filling open positions, as well as instituting other unspecified cost-saving initiatives, it expects to reduce its expenses by $300 million annually.

In fiscal 2022, Jefferson Health and Thomas Jefferson University posted revenue of $8.1 billion and a net loss of $125.8 million. For the first nine months of fiscal 2023, which ended June 30, Jefferson — which now also includes full ownership of the managed care company Health Partners Plans — recorded a $117.5 million operating loss.

Last week, Thomas Jefferson University President Dr. Mark Tykocinski resigned from the post to focus on his cancer immunotherapy research. Dr. Susan Aldridge is serving as interim president. Tykocinski will remain a full professor at the university.

Jefferson Health is the parent company for Thomas Jefferson University Hospitals, which has five hospital campuses; Einstein Healthcare Network; which has four hospital campuses; Abington-Jefferson Health, which has two; Jefferson Health Northeast, which has three; Jefferson Health New Jersey, which has three; and Magee Rehabilitation Hospital. The health system also has more than 50 outpatient and urgent care locations in the region.