More severely ill patients who had to be hospitalized for longer led to Mayo Clinic’s higher operating profit last year compared to 2020 financials.
The healthcare system in Rochester, Minnesota posted an operating margin of 7.7% in calendar year 2021, higher than many of its nonprofit counterparts. Last year, Mayo posted an operating profit of $1.2 billion on revenue of $15.7 billion, compared to $728 million on revenue of $13.8 billion in 2020, representing an operating margin of 5.3%.
“The Mayo Clinic staff have heroically weathered more than two years of the pandemic and provided the highest quality of care to the countless patients who have trusted us with their care,” Mayo CEO Dr. Gianrico Farrugia said in a statement.
Mayo said longer hospital stays along with more seriously ill patients caused the census rate in hospitals to reach a new high last year, averaging 2,100 patients per week, up 8.1% from 2020. . Health system hospitals were 92% occupied on average. , which he said was much higher than pre-pandemic 2019.
These figures were released despite Mayo hospital admissions still down 6.8% in 2021 from pre-pandemic 2019. However, hospital admissions did improve by 5.7% compared to 2020.
On the other hand, outpatient visits also decreased compared to 2019 by 1.8%. They are up 12.5% compared to 2020. Other volume indicators – patient days and surgeries – increased in both 2019 and 2020.
Mayo’s revenue grew 14% year-over-year in 2021, well above the 1.5% revenue growth reported by the health care system in 2020. Spending increased by 11.1% compared to the same period last year and amounted to $14.5 billion.
A strong return on investment propelled Mayo’s net income to almost $3.6 billion, representing a 22.7% return. This is more than $1 billion more than in 2020, when net income was almost $2.5 billion.
Kaiser Permanente, a large integrated healthcare system based in Oakland, California, has benefited from an equally significant increase in investment in 2021. The healthcare system experienced its most profitable year yet, posting a net profit of $8.1 billion on revenue of $93.1 billion, less than Mayo’s margin of profit. Kaiser’s operating margin was just 0.7%, much less than Mayo’s 7.7%.
Mayo’s cash and investments totaled almost $18.1 billion at the end of 2021, up $3.6 billion from the end of 2020. Mayo explained that most of the growth came from return on investment, but a significant portion came from operating cash flow.