Dive Brief:

• The Rochester-based Mayo Clinic saw a 36% surge in its operating income last year, driving the hospital system to its strongest financials in 25 years.
• Two main factors drove the impressive results: a larger-than-expected influx of patients with sizeable inpatient needs, and Mayo officials' fiscal discipline, which kept costs to a mere 1.3% rise.
• The health system plans to take advantage of its strong earnings to invest in health IT and its EHR system.

Dive Insight:

A perfect storm of unexpected revenue streams and relatively flat labor costs ensured Mayo a stellar 2014. "We had a moderate growth in revenue, but really almost flat growth in expenses," said Mayo CFO Kendrick Adkins. "That created significant net ­operating income."

The much-lauded health system's 2014 operating margin was 8.5%—the highest such margin since 1986. That also allowed Mayo to invest more than $400 million in employees' pension plans.

With these strong 2014 numbers in its pocket, the health system plans to invest $1.5 billion in health IT over the next several years.