Philadelphia-based Jefferson Health is launching a restructure that will corral its 18 hospitals into three regional divisions, according to a Philadelphia Inquirer report confirmed by the nonprofit academic system.
Jefferson said the move will help streamline and optimize its operations, which have seen considerable expansion since the organization ran just three hospitals in 2015.
The Inquirer, citing an internal document, also reported that the flatter structure “will involve an unspecified number of job cuts, mostly among executives.”
A representative for Jefferson did not comment on any potential cuts when confirming the reorganization.
“This adjustment in our organizational structure is in the best interest of Jefferson’s ability to fulfill our mission of improving lives,” Jefferson Health and Thomas Jefferson University CEO Joe Cacchione, M.D., who joined the organization from Ascension in September, said in a statement provided over email. “It ultimately contributes to true clinical integration as ‘One Jefferson’ and enables Jefferson Health to better streamline processes and optimize our health system.”
Parent organization Thomas Jefferson University logged $7.9 billion in revenue and a $126 million operating loss during its 2022 fiscal year, following a narrow $6 million operating gain in 2021 and a $298 million operating loss in 2020. Like much of the industry, its hospitals have faced financial hurdles through 2022, disclosing for its most recent quarterly numbers a ‐3.7% operating margin driven largely by clinical operations.
Jefferson’s recent expansion was fueled by mergers and acquisition deals that added new hospital facilities as well as full ownership of Health Partners Plans, a nearly 300,000-person managed care plan.
The system now goes from five operational segments to three: a North Region consisting of six hospitals, a Central Region with seven and an East Region with three (located in New Jersey), Jefferson said. Two other hospitals controlled as part of joint ventures are not included in the three regions.
Dixie James is slated to lead the Central Region as president, according to the system, while Brian Sweeney will serve as president of the North Region and interim president of the East Region until a permanent hire is made. All regional presidents will report to the chief operating officer.
Streamlined structures and flattened management structures are a go-to for improving health system efficiency and speed, particularly when times are tough.
A similar effort was launched last summer by Renton, Washington-based Providence, which shifted to a “leaner” operating model for its 52 hospitals and other business lines after facing operating deficits of $714 million and $306 million in 2021 and 2020.