- Mayo Clinic said workforce shortages contributed to capacity constraints in the third quarter, while inflation in both labor and nonlabor costs weighed on operating results.
- Operating income for the nonprofit declined 52% year over year to $157 million, the Rochester, Minnesota-based system said. Expenses rose faster than revenue, up 7.1% to almost $4 billion. Revenue increased 2.4% from a year ago to $4.1 billion.
- Investment losses continued to take a toll on results. Cash and investments totaled almost $17 billion on Sept. 30, a decline of nearly $1.2 billion since the end of 2021, the hospital system reported.
Hospitals have yet to turn the corner financially after struggling all year with the aftereffects of the COVID-19 pandemic, including the challenge of caring for patients with fewer clinicians due to widespread labor shortages in the industry.
Mayo’s third-quarter update follows reports last week from Advocate Aurora and CommonSpirit Health, both of which pointed to higher labor costs resulting from ongoing workforce shortages.
Mayo reported its salaries and benefits increased 3.5% from the prior year to $2.3 billion and comprised almost 59% of total expenses. Spending on supplies and services, which includes contract labor expenditures, rose 14% from a year ago to $1.3 billion. Contract labor expenses alone jumped 47% in the third quarter.
Outpatient visits, surgeries and patient days were higher than both 2021 and 2020 on a year-to-date basis due to strong demand for services, the healthcare system said. Its hospitals operated near capacity during the quarter due to an increase in patient days, even as admissions declined from a year ago. Mayo attributed the difference to capacity constraints and the changing mix of hospital patients with longer lengths of stay this year.
Mayo announced a strategic collaboration with National Resilience to develop new biotherapeutics for rare and complex conditions. The partnership will focus on therapies derived from human biologics such as cells, blood, enzymes, tissue, genes or genetically engineered cells for use in medicines.
The initiative will work to attract biotech companies interested in sponsoring clinical trials at Mayo for new regenerative biotherapeutics, as well as provide cell and gene products for biomanufacturing early-stage therapeutics.