Philadelphia-based Jefferson Health’s outlook was lowered to negative from stable by Fitch.
Four things to know:
1. Jefferson Health reported a $196 million operating loss (-1.2%) operating margin in fiscal 2025, which ended June 30. The results include 11 months of Lehigh Valley Health Network activity. Jefferson and Allentown, Pa.-based LVHN merged on Aug. 1, 2024. In 2024, Jefferson reported an operating income of $1.3 million (0% margin).
2. Fitch said in its Oct. 13 report that while the LVHN merger was accretive, the system was hamstrung by losses from Jefferson Health Plans. The system’s insurance arm reported a $170 million loss in 2025, driven by costs associated with GLP-1 pharmaceuticals and medical expense trends outpacing inflation. Jefferson Health Plans recorded a $100 million operating gain in 2024.
3. Fitch expects a “measured recovery” over the 24 to 36 months. It said Jefferson’s management is targeting a four-pillar recovery plan with a focus on growth, payer contracting, integration of services and overall operational improvements in the areas of labor, supply chain and revenue cycle. Fitch said the plan “blends revenue growth and cost discipline supported by labor productivity and reduced premium labor, accelerated ambulatory expansion and faster access to clinicians, and revenue cycle and supply chain optimization.”
4. Jefferson has an “A” rating with Fitch. The system has a leading and expanding market position and nationally recognized specialty services in oncology, neurology and cardiology. The LVHN merger has strengthened the system’s regional influence, Fitch said.
