ADVERTISEMENT

ADVERTISEMENT

Revenue, expenses are up for Mayo Clinic resulting in a 41% drop in operating income

On Thursday, Mayo Clinic posted an unaudited consolidated financial report from the first quarter on the Electronic Municipal Market Access website. The report showed revenue was up 6.9% over the same quarter in 2021, when Mayo Clinic reported $3.67 billion in revenue. However, the operating margin for Q1 2022 is 3.6%, which is well below the 6.6% margin that Mayo Clinic posted in the first quarter of 2021.

032221.N.RPB.MAYO.CLINIC.1008132.jpg
A sign for Mayo Clinic's Mayo Building Monday, March 22, 2021, in downtown Rochester.
Joe Ahlquist / Post Bulletin file photo
We are part of The Trust Project.

ROCHESTER — Mayo Clinic said 2022 brings “new challenges” in a report showing that it tallied $3.9 billion in revenue with a net operating income of $142 million, a 41% decrease from $243 million in the same quarter in 2021.

On Thursday, Mayo Clinic posted an unaudited consolidated financial report from the first quarter on the Electronic Municipal Market Access website.

Also Read
Cactus Hospitality LLC, which is led by Vishal Patel, purchased the 145-room Rochester hotel previously called Ramada by Wyndham at 1625 South Broadway on Nov. 30, 2022. In the wake of the sale, the hotel is transitioning to operating under the Choice hotel brand.
"We have adjusted our flying based on demand to the Fort Myers area in January as the region recovers from the hurricane. We will continue to monitor Florida’s recovery and demand for travel and adjust,” explained Sun Country’s Senior Director of Communications Wendy Burt.
New episodes are published weekly on Fridays.

The report showed revenue was up 6.9% over the same quarter in 2021, when Mayo Clinic reported $3.67 billion in revenue. However, the operating margin for Q1 2022 is 3.6%, which is well below the 6.6% margin that Mayo Clinic posted in the first quarter of 2021.

“The year 2022 begins with new challenges that follow nearly two years of pandemic operations. Workforce shortages and corresponding labor cost inflation, persistent supply chain disruptions and shortages, a higher interest rate environment, and capital market volatility have all taken center stage for management attention,” stated Mayo Clinic officials in the report. “First quarter performance results reflect these new considerations which also serve to reinforce long term plans for revenue diversification, digitization of health care when appropriate, using platform models to accelerate innovation, and investing in the treatments of complex and serious clinical care.”

Operating expenses were $3.8 billion, a year-over-year growth of 10.4%. Salaries and benefits climbed by 7.4% to $2.3 billion. Those costs accounted for 59.7% of Mayo’s expenses for the quarter.

ADVERTISEMENT

“The increase in salaries and benefits and supplies and services is due to contracted labor and temporary pay practice premiums,” according to the report.

Mayo Clinic reported that its cash and investments plummeted by $465 million to $17.6 billion. The drop was “largely” due to investment losses. Mayo's cash and investment position included $13.36 billion in its Long-Term Fund. The fund includes $6.29 billion of endowed funds and $7.07 billion of unrestricted reserves.

Net medical service revenue increased to $3.35 billion, a 6.3% rise from the same quarter in 2021.

Outpatient visits were up with 1,196,234 compared to 1,156,158 in 2021 and 1,134,583 in 2020. Surgical cases also show an increase to 33,552, up from 32,689 in 2021 and 31,165 in 2020.

Admissions were on the decline. Mayo Clinic reported 29,117 admissions for the quarter, which is down from 29,226 in 2021 and 30,645 in 2020.

Jeff Kiger tracks business action in Rochester and southeastern Minnesota every day in "Heard on the Street." Send tips to jkiger@postbulletin.com or via Twitter to @whereskiger . You can call him at 507-285-7798.

Heard Around Rochester - Jeff Kiger.png

Jeff Kiger writes a daily column, "Heard Around Rochester," in addition to writing articles about local businesses, Mayo Clinic, IBM, Hormel Foods, Crenlo and others. The opinions of my employer do not necessarily reflect my opinions. He has worked in Rochester for the Post Bulletin since 1999. Send tips to jkiger@postbulletin.com or via Twitter to @whereskiger . You can call him at 507-285-7798.
What to read next
The earliest the school district could host an election on the matter would be next fall.
Community members can give new and unwrapped presents at the Walmart Angel Tree until Dec. 15, 2022, and at the Apache Mall Sharing Tree until Dec. 24 for the Toy and Joy Shop. If you or someone you know is in need of help with Christmas presents this year, you can register at rochestersa.org.
A Rochester man is facing three felony charges related to the rape of two juveniles who were around 9-years-old and 5-years-old at the time of the sexual assaults.
Nearly half of the volunteer board that reviews potential changes to the city's home-rule charter face the need to reapply for their seats while new applicants are also being sought.