Philadelphia-based Thomas Jefferson University, owner of Jefferson Health, reported an operating loss of $103.8 million (-2.5% operating margin) in the first quarter of fiscal 2026, including $19.4 million in restructuring costs, according to its Nov. 14 financial report.
Restructuring costs for the three months ended Sept. 30 included employee severance and “other strategic actions to align operations and obtain cost efficiencies to sustain TJU’s mission of service and access to care in the communities it serves,” according to the report.
Excluding restructuring costs, Jefferson reported an $84.4 million operating loss (-2% margin), compared to an $89.4 million (-2.6% margin) during the same period last year.
Total revenue was $4.2 billion in the quarter, up from $3.4 billion last year. Inpatient admissions, outpatient visits, and physician visits grew year over year by 26.4%, 32.9%, and 29.0%, respectively. The increases are due to only two months of activity from the Lehigh Valley Health Network being included in the first quarter of 2025. Jefferson merged with the Allentown, Pa.-based health system on Aug. 1, 2024.
Total operating expenses were $4.3 billion in the quarter, up from $3.5 billion last year. Jefferson Health Plan recorded a $44.3 million loss in the first quarter, driven by GLP-1 pharmaceuticals and medical expense trends outpacing premium increases. Jefferson said overall inflation has increased the cost of providing care and has outpaced the increase in payer rates. The health plan reported a $25.6 million loss during the same period last year.
In October, Jefferson confirmed to Becker’s it planned to lay off around 1% of its 65,000-person workforce — approximately 650 employees. Joseph Cacchione, MD, CEO of Jefferson, said in an Oct. 16 statement shared with Becker’s that the health system is “facing significant financial headwinds.”
“To sustain our mission and continue serving our communities, we must take thoughtful, strategic actions to align our operations for the future,” Dr. Cacchione said. “While these decisions are never easy, they are necessary to ensure Jefferson remains strong and able to invest in expanding access to care, advancing innovation, and supporting those who rely on us most.”
Those layoffs are not included in the restructuring expenses, as they occurred in the second quarter of fiscal 2026.
