Mayo Clinic is driven by its mission to inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research. As a not-for-profit institution, Mayo invests all of its net operating income back into programs that support this mission.
Mayo Clinic leaders are pleased to announce that Mayo Clinic ended 2010 in a strong financial position. "Mayo Clinic employees have done a remarkable job achieving a rapid recovery and positioning the organization well for the future," says John Noseworthy, M.D., president and chief executive officer of Mayo Clinic. "While the national and global economies are recovering slowly from the 2008 financial crisis, our staff's extraordinary response to tough times allowed us to recover in 2009 and to flourish in 2010."
In 2010, Mayo's income from current activities (net operating income) was $515 million, which translates to a 6.5 percent operating margin and aligns with the clinic's long-term objectives. Because Mayo Clinic is a not-for-profit organization, all income is reinvested into Mayo Clinic's patient care, education and research programs. Mayo sets its long-term operating margin objectives based on a determination of what is necessary to reinvest in these programs.
Mayo Clinic achieved its 2010 operating margin primarily by holding expenses to a 2.5 percent increase while growing revenue by 4.7 percent over the same period. Shirley Weis, the clinic's chief administrative officer, notes that Mayo Clinic improved on its solid 2009 financial performance in 2010 by continuing to focus on expense management, controlled growth in staffing, and practice redesign that eliminates waste and overutilization.
"Mayo Clinic employees across the enterprise continue to focus on quality while identifying and eliminating work that duplicates effort or that doesn't add value for our patients," says Weis.
Jeff Bolton, Mayo Clinic's chief financial officer, notes that Mayo's financial turnaround since 2008 is the result of focused efforts from all parts of the organization. "These efforts have significantly improved our operational effectiveness, and we continue to work to reduce the cost structure for delivering our services," Bolton says.
Recognizing that the road ahead is uncertain with slow economic recovery and variables surrounding health care, Mayo Clinic will continue to closely manage expenses and make measured investments in capital projects and programs.