Philadelphia-based Jefferson Health is reducing its workforce by approximately 1 percent, or about 400 positions, according to a statement shared with Becker's.
"This week, we made the difficult decision to reduce our workforce by approximately 1 percent," Jefferson CEO Joseph G. Cacchione, MD, said in the statement. "This comes after also reviewing the organization for other operational changes that could be made to realize efficiency and savings and also eliminating a number of vacant positions. These reductions were focused largely in corporate and administrative functions."
Dr. Cacchione assumed his role as CEO of the system in September 2022. Jefferson grew from three hospitals to 18 between 2015 and 2021 via mergers and employs more than 42,000 people. Dr. Cacchione said the decision to eliminate jobs "was not made lightly."
"As has been widely reported, there are incredible financial pressures on healthcare 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," Dr. Cacchione said.
News of the workforce reduction follows a number of changes made at Jefferson throughout 2023. In January, the system rolled out a reorganization plan to operate as three divisions instead of five in an effort to flatten management and become more efficient. The system noted the change would result in layoffs, primarily among executives.
"That integration is not just about cost cutting," Dr. Cacchione told Becker's in January. "In fact, it's less about cost cutting, and more about the efficiency of integration so that we can optimize care delivery. So, for example, are we duplicating procedures that we do, where hospitals that are just five miles apart are competing with one another for the same patients? That's just duplicative, and it's not an efficient use of our resources."
In February, the system named a new CFO — John Mordach, who joined the system from Duke University Health System in Durham, N.C., where he had served as senior vice president, CFO and treasurer since 2020. The next month, Dr. Cacchione said the system expected to end the 2023 fiscal year with an $80 million loss, even after renegotiating contracts with Independence Blue Cross, its largest commercial insurer.