Buoyed by increases in patient care and research, Mayo Clinic’s revenue climbed to $6.14 billion in 2017, up 19 percent from the previous year.
That’s a much bigger jump than the 9 percent revenue increase from 2015 to 2016, when the revenue went from $4.7 billion to $5.15 billion.
Mayo Clinic filed its annual 990 financial forms with the IRS last week. The 214-page report offers a detailed look at how Mayo Clinic fared financially in 2017.
The IRS document paints a picture of a robust, rapidly growing organization.
Revenue less expenses, or net income, was $312.58 million for 2017 compared to $257.42 million in 2016. That’s an operating margin of 5 percent, which is higher than most Minnesota health systems.
A recent study by Joseph White and Mike Porter of St. Thomas, Opus College of Business, found the average operating margin for the top eight Minnesota health systems, including Mayo Clinic, was 2.5 percent for 2017.
Daniel B. McLaughlin, who is on the St. Thomas/Opus faculty and was CEO of Hennepin County Medical Center for eight years, said Mayo Clinic’s finances are much healthier than most Minnesota systems.
Nationally, Mayo Clinic also fared better than its most prominent peers.
Baltimore-based Johns Hopkins Health System’s saw its operating revenue increase 5.9 percent to $6.2 billion in 2017, compared to $5.8 billion in 2016.
Cleveland Clinic’s operating revenue went up 5 percent to $8.4 billion in 2017 compared to its 2016 results. However, its operating income spiked by 35 percent to $328 million. That rebound follows a rough 2016, which saw an almost 50 percent drop in operating income.
Contrary to a national trend, Mayo Clinic’s revenue from patient care was $3.06 billion in 2017. That’s up 9.2 percent from $2.8 billion in 2016.
“This is very good performance considering the national decline in inpatient days. It reinforces Mayo’s strategy of becoming a Destination Medical Center for referral cases,” McLaughlin said.
Revenue from research was a major area of growth for Mayo Clinic in 2017. Research revenue grow to $6.2 million in 2017. That’s up a whopping 26 percent from $4.92 million in 2016.
“This is an important indicator of Mayo’s national role in research,” commented McLaughlin. “Mayo has always had an important resource in its medical records systems, which have been well maintained for decades. This is a significant advantage for securing grants for large research projects, which require data on many patients over long periods of time.”
Revenue from education was $56.9 million in 2017. That’s up 5.5 percent from $53.9 million revenue for education in 2016. Revenue from other program services hit $881.5 million in 2017. That’s a 7.3 percent increase from $820.8 million in 2016.
Overall, Mayo Clinic’s IRS document showed an organization that is reaping the benefits of being positioned for growth by its leadership and the DMC initiative.
“Relative to other health systems in Minnesota, Mayo is very healthy financially and highly productive, as well. A recent study by St. Thomas found that Minnesota healthcare is a leader nationally in quality and is highly efficient,”McLaughlin said. “It costs Minnesotans only 10.5 percent of our state domestic product for health care as compared to 18 percent for the nation – and Mayo has been a key part of this superior performance for many years.”