Mayo Clinic Revenue Up, Earnings Down in Q1
Mayo Clinic’s net income dipped for the first three months of the year as staffing and supplies costs took a jump.
The Rochester-based health care system, which operates as a nonprofit, reported making $101 million on approximately $2.92 billion in revenue in its first quarter, according to an unaudited financial report.
Its net income for the same period a year ago was $109 million. Revenue totaled about $2.69 billion during its first quarter last year, marking a roughly $230 million improvement year-over-year by Mayo.
By comparison, expenses took a larger jump. Its first quarter costs this year reached nearly $2.82 billion, a roughly $240 million difference over the $2.58 billion in costs Mayo reported last year.
About two-thirds of its expenses, or $1.85 billion, were attributable to the salaries and benefits of its 64,000 employees. Those costs rose by about 10 percent, or $167 million, over the year-ago period.
All other expense categories—supplies and services, facilities, and finance and investments—rose year-over-year.
Aside from work related to the $20 billion Destination Medical Center project in Rochester, Mayo was busy kicking off other development plans during the first quarter. In March, the nonprofit said it would spend $458 million renovating and expanding facilities in Mankato, Rochester and in Florida. A month later, it announced an expansion effort for its operations in Mayo Clinic Square, a sports medicine facility in downtown Minneapolis.
Mayo’s developments extended to the medical field, as well, with a number of partnerships and investments in the January through March period.
As a nonprofit entity, Mayo is not legally required to disclose financial information. However, given its heavy activity within the bond market, Mayo releases much of its financials. Doing so allows the nonprofit to continue to raise funds through bond offerings, a tactic that in 2016 alone netted Mayo hundreds of millions of dollars. That money, Mayo said, went towards covering some of its costs related to “general corporate purposes” and debt restructuring.