Mayo Clinic revenue up 5% to $12.6B in 2018
- Mayo Clinic saw revenue climb 5.1% to $12.6 billion in 2018, up from $11.09 billion the previous year.
- Net operating income dipped slightly to $706 million from $707 million in 2017. Total net income was $554 million, down from $1.4 billion a year ago, due largely to changes in investment markets, according to consolidated financial results released Tuesday.
- The showing came despite a $1 billion investment to implement an enterprise-wide Epic EHR and $50 million in missed revenue due to the transition.
The sound results allowed Mayo to invest more than $724 million in capital projects. Of that, $359 million went to fund new facilities and technology projects, while $365 million was for maintaining and replacing existing technology.
In addition to projects already underway, the system approved expansions totaling $1 billion at campuses in Minnesota, Wisconsin, Arizona and Florida.
Mayo also reported a number of contributions to community health in 2018. These included $78 million in charity care, $511 million in unpaid portions of Medicaid bills and $2.2 billion to cover gaps in Medicare payments. The clinic also made $6 million in cash and in-kind donations to communities it serves.
Nonprofit hospitals are facing increased scrutiny over whether they're fulfilling their charitable missions as tax-exempt entities. Earlier this month, Pennsylvania Attorney General Josh Shapiro accused UPMC of shirking its role as a charity by refusing to contract with competitor Highmark, potentially robbing Highmark members of in-network access to UPMC's doctors and facilities after June 30.
Meanwhile, many nonprofits continue to face headwinds. Catholic Health Initiatives reported total operating revenue of $3.83 billion in the in the second quarter of fiscal year 2019, ended Dec. 31, up from $3.82 billion in the same period in 2017. The slight gain was outpaced by operating expenses totaling $3.87 billion, up from $3.80 billion the prior year.
CHI formally closed its merger with Dignity Health earlier this month, creating the largest nonprofit health system by revenue — now known as CommonSpirit Health.
Ascension tallied $6.4 billion in revenue for its three months ended Dec. 31, an increase over $5.76 billion in the same period the prior year. Income from operations grew to $185.4 million, up from $73.2 million in 2017. Ascension, the nation's largest nonprofit hospital operator, earlier this year announced a reorganization that included eliminating three executive positions and a move to erase the line between its healthcare and solutions divisions.
The nonprofit hospital sector faces major risks, but is expected to remain stable this year, according to S&P Global. The ratings agency said the possibility of a recession, along with changes in Medicaid and encroachment from nontraditional competitors, were concerns.