Mayo Clinic reports $12B in revenue for 2017
In its consolidated financial report for 2017, Mayo Clinic reported operating income of $707 million and $12 billion in revenue for the year. Operating income improved by more than $225 million and revenue increased $1 billion over 2016.
Mayo enjoyed an improved operating margin — 5.9% in 2017 compared to 4.3% in 2016 .
The health system said it invested $714 million in capital projects, including a single, integrated EHR, revenue cycle management, facilities and equipment.
Mayo Clinic's expenses increased from about $10.5 billion in 2016 to nearly $11.3 billion in 2017. The system said it spent 65% of expenses, or $7.3 billion, on salary and benefits and $535 million on the staff pension plan.
Critics have questioned the healthy margins and revenue numbers large nonprofit systems like Mayo have posted, but CFO Dennis Dahlen said in a statement the organization’s earnings are being invested in the medical practice, education and research, its employees and its communities.
“It’s also vital to invest in the financial security of our staff and to equip them with technology and infrastructure to best serve our patients,” Dahlen said.
Mayo Clinic said its charity care increased from $50 million in 2016 to $56 million in 2017. This uptick is consistent with what other health systems are seeing. The American Hospital Association reported that uncompensated care increased to $38.3 billion in community hospitals in 2016, which was the first year since 2013 the amount went up from the previous year.
Mayo’s strong 2017 comes as President and CEO Dr. John Noseworthy announced his decision to retire at the end of this year. Noseworthy has been with Mayo Clinic for 28 years, including nine years as president and CEO.
Mayo Clinic has been named the U.S. News & World Report's top hospital for the past two years, but has not been without controversy. Noseworthy was criticized for suggesting patients with private insurance should sometimes be prioritized over those with government payers, a comment he later walked back. Mayo has also been criticized by residents of Albert Lea, Minnesota, who are seeing their hospital consolidated with another hospital about 25 miles away.
The strong numbers also come the same week the Mayo Clinic Board of Trustees announced a fundraising campaign has raised $3.76 billion since 2010. The Mayo Clinic Board of Trustees said the campaign raised $634 million in 2017 alone.
“Benefactor support makes it possible for Mayo Clinic to provide much-needed answers for the most complex problems in medicine,” Noseworthy said. “This campaign advanced our capabilities in many strategically important areas. We are deeply grateful for the generosity of our supporters both during the campaign and as we continue to imagine a brighter future together.”