The Mayo Clinic posted a healthy profit for the third quarter of 2020, but its COVID-19-impacted bottom line remains significantly behind the numbers it posted in 2019.
The Rochester, Minnesota-based Mayo reported income over expenses of $987 million. That compares to a surplus of $375 million for the third quarter of 2019, an increase of 163.2%. However, for the first nine months of the year, income over expenses was down by nearly half.
Mayo was aided by $338 million in provider relief funds from the Coronavirus Aid, Relief and Economic Securities Act or CARES Act, of which it has used roughly half to date, with the remainder deferred. It also received – and repaid – $915 million in advanced payments from the Medicare program.
The Mayo Clinic declared in its earnings statement that it “has navigated the unprecedented challenges of 2020 remarkably well.” It touted a patient mortality rate from COVID-19 of 0.71%, compared to the 4% nationwide mortality rate, along with an ICU mortality rate of 13%, less than half the nationwide mortality rate of 27%.
Mayo also showed a strong performance for the third quarter ending Sept. 30. Revenue was up 7.4%, to nearly $3.7 billion. Those numbers were buoyed by $63 million in CARES Act funding and other COVID-19-related credits used during the quarter.
However, Mayo’s bottom line for 2020 so far is still feeling the stress from the pandemic. Revenue for the first nine months of the year was just under $10 billion, a decline of 1.5% compared to the same period last year, while expenses were up 2.4%, including a 4.3% bump in salaries and benefits. Revenue from medical services was down 3.1%. Mayo’s income over expenses to date in 2020 totals $767 million, down 49.1% compared to the $1.5 billion it reported for the first nine months of 2019.
Assets on hand did improve significantly due to the strong performance of Mayo’s investments during the third quarter. Cash and investments totaled $13.1 billion, up nearly $2 billion since the end of 2019. Days cash on hand increased to 320 days at the end of the quarter, compared to 262 days at the end of the third quarter of 2019.
Meanwhile, COVID-19’s third wave in the U.S. is likely to put continuing pressure on Mayo’s operations. Its Midwest division has seen more than 900 employees test positive in recent weeks, and 1,500 are currently on work restrictions due to being exposed to the virus or being under quarantine.
And while some for-profit operators have expressed optimism about getting costs and patient volumes under control in the coming months, it is likely that systems such as Mayo will continue to be swamped with COVID-19 patients.