Philadelphia-based Jefferson Health’s outlook was lowered to negative from stable by Moody’s.
Five things to know:
1. Moody’s said in its Dec. 5 report that the revision reflects margins below expectations and the “likelihood that liquidity will further decline in 2026 due to ongoing challenged financial performance.”
2. Jefferson 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. The system’s health plan recorded a $44.3 million loss for the three months ended Sept. 30, driven by GLP-1 pharmaceuticals and medical expense trends outpacing premium increases.
3. The health system has an “A3” rating with Moody’s. The agency said the rating reflects Jefferson’s large size, wide geographic reach and strong position in both clinical care and academics. After merging with Allentown, Pa.-based Lehigh Valley Health Network in August 2024, Jefferson operates a roughly $16 billion enterprise across Pennsylvania and New Jersey. Moody’s said that while this provides significant opportunities for growth, “this expansion will require ongoing integration efforts to realize its potential.”
4. 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.”
5. Jefferson’s outlook was also lowered to negative from stable by Fitch in October. Fitch said in its Oct. 13 report that while the LVHN merger was accretive, the system was hamstrung by losses from Jefferson Health Plans. Fitch said it expects a “measured recovery” over the next 24 to 36 months.
