Mayo Clinic’s operating income soared to $1.2B last year

Mayo Clinic’s operating income rose 66% in 2021 as it treated a record number of people and patients spent significantly more time in the hospital.

Mayo saw more than 1.4 million patients from every state and 139 countries last year. That’s up from 1.3 million in 2020, according to the clinic’s annual financial release on Monday.

Philanthropy including future commitments raised more than $1 billion, which was comparable to the previous year, while investment income far exceeded historic averages.

“Mayo Clinic staff have persevered heroically through more than two years of the pandemic and provided the highest-quality care for the historic number of patients who have trusted us with their health care,” Dr. Gianrico Farrugia, the clinic’s chief executive, said in a statement.

Mayo Clinic has significant operations in Minnesota and four other states. The nonprofit group employs more than 70,000 people overall, including 45,440 in Minnesota.

In 2021, Mayo is guaranteeing a minimum wage increase of 4% for workers, a rate that executives decided in February to boost from previously announced raises of 2%. Concerns over general inflation were a factor.

Last week, Mayo announced plans for $785 million in hospital construction projects in Jacksonville, Fla., La Crosse, Wis., and Mankato, with projects in the Midwest expected to begin this year.

In Monday’s announcement, the clinic reported revenue of $15.7 billion in 2021 while incurring $14.5 billion in expenses, leaving operating income of about $1.2 billion, up from $728 million in 2020.

It was the largest one-year tally for operating income in the clinic’s history, although the operating margin of 7.7% wasn’t quite as high as the rate seen in 2014.

Revenue growth of about 14% was a substantial rebound from 2020, when the COVID-19 pandemic drove a temporary shut-down of non-emergency care and cut the clinic’s revenue growth rate to just 1.5%.

“Expenses grew by 11% year over year, due in large part to pandemic-related expenses and increased clinical volumes,” Mayo said in a news release.

The weekly average for hospital census averaged more than 2,100 patients, up about 8% compared with 2020. Hospital occupancy averaged nearly 92%, which the clinic said was significantly higher than before the pandemic in 2019.

Patients spent a total of nearly 700,000 days in Mayo Clinic hospital beds last year, up 12% from 622,768 patient days the previous year.

The clinic cared for more than 160,000 patients with COVID-19 during 2021 and tested more than 1.1 million people for the pandemic virus. Mayo staff administered more than 500,000 COVID-19 vaccines, the clinic says, and more than 19,000 infusions of monoclonal antibodies to treat the disease.

Mayo’s large laboratory operation based in Rochester completed more than 27 million tests of all types for health care professionals and clients in 60 countries, the clinic reported. The 2.4 million COVID-19 tests performed by Mayo Clinic Laboratories in 2021 was off from 3.1 million tests the previous year.

The clinic in 2021 treated more than 1370,000 surgical patients — a 13% increase over 2020 — and performed 1,740 solid organ transplants.

“More than 1 million outpatient appointments were provided virtually in 2021, and more than 8,500 patients were enrolled in remote monitoring to receive care how and where they prefer,” the clinic reported.

The estimated cost of providing charity care plunged from $89 million in 2020 to $49 million last year, according to a financial statement. The filing also reported the unreimbursed cost of providing services to Medicaid patients increased from $540 million $601 million over the time period.

Medical service revenue grew by 16% overall. The clinic’s operations in the Midwest generated more than two-thirds of the revenue, although the growth rate was higher at Mayo’s operations in Florida and Arizona.

Mayo Clinic’s endowment grew from $5.7 billion at the end of 2020 to $6.9 billion at last year’s end.

Charitable giving from years ago means Mayo Clinic has oil and gas interests that generated $101 million in “other” revenue last year, a jump from $46 million the previous year. Cafeteria revenue grew by more than 12% to $29 million.