Thomas Jefferson University, which includes Jefferson Health, is cutting up to 600 jobs through attrition and thinning executive salaries as it absorbs a nearly $300 million operating loss in its fiscal 2020.
Philadelphia-based Jefferson said it plans to implement a series of temporary cost-cutting measures in the current fiscal year, including cutting between 500 and 600 positions through attrition, decreasing pay for its most senior executives, changing the retirement plan and delaying pay increases.
The organization emphasized that no employees are losing their jobs and it has weathered the pandemic without any furloughs or layoffs. It said the vacant positions that are not being filled were chosen to minimize impacts to patient care and student education.
"We believe this set of actions avoided what other large systems around the country have had to do, thereby saving 2,500 jobs," Jefferson spokeswoman Gianna DeMedio wrote in an email.
That's not been the case at other health systems. Beaumont Health in Southfield, Mich. announced in April it would temporarily lay off 2,475 employees and eliminate 450 positions due to COVID-related losses. Livonia, Mich.-based Trinity Health said the same month it would furlough about 2,500 employees because of the pandemic.
Jefferson lost nearly $299 million on operations in the year ended June 30, 2020. Factoring in goodwill impairment, that loss grew to $460 million. That's compared to $51 million in operating income in fiscal 2019.
Jefferson Health said it treated more COVID-19 patients than any other provider in its region, with most of those admissions in April and May. The health system said it recorded nearly 4,000 COVID-related admissions.
Like other providers, the pandemic has caused a sharp decline in Jefferson's volumes, which had not yet returned to normal as of June 30. The health system said it rolled out a regional advertising campaign warning patients that delaying care could result in more heart attack or stroke deaths from untreated illnesses.
Inpatient admissions in the quarter ended June 30 were down 15% year-over-year. Of the nearly 27,000 patients admitted to hospitals during the quarter, almost 15% were related to COVID-19. Outpatient visits fell 40% in the quarter ended June 30 year-over-year. Physician office visits were down 21% in that time.
Even before the pandemic struck, Thomas Jefferson University had been operating at a slight loss. The organization said it had a plan to improve its performance from a $20.5 million loss in the eight months ending Feb. 29 to a $25.4 million gain, or a 0.5% operating margin.
COVID-19 in May derailed Thomas Jefferson University's plan to acquire Fox Chase Cancer Center from Temple University. At the time, Jefferson CEO Dr. Stephen Klasko explained that the system needed to focus entirely on providing patient care, student education and safety.