Mayo Clinic Reports 2014 Was Strong Financial Year
Rochester, MN ( KROC AM News) - Mayo Clinic has released its 2014 financial results and they show a fairly strong performance.
Mayo’s overall revenue grew 4 percent over 2013 to $9.8 billion. Expenses were up 1 percent at $8.9 billion. Net operating income totaled $834 million, more than $200 million higher than the 2013 figure. That produced an operating margin of 8.5 percent, which Mayo says was the best number since 1986.
Despite the strong performance, Mayo says it suffered a $462 million drop in net assets due to falling interest rates. Mayo also saw a drop-off in development gifts (charitable contributions). The 2014 total was $288 million, down from $399 million the year before.
The patient total rose by about 60,000 to just over 1.3 million.
Mayo’s year end employment total was 59,500 - the same as 2013.
The Rochester employment total at the end of the year was 32,271 - down about 900 from 2013. The total at the end of 2012 was 34,233.
“Whether viewed through the lens of quality, patient outcomes, research advances, operational performance or sharing our knowledge with the world — by all measures, we had an extraordinary year,” says John Noseworthy, M.D., president and CEO, Mayo Clinic. “That success allowed us to reinvest in our people, our infrastructure and our mission so we can better serve our patients.”
“As a nonprofit organization, it’s important for us to not only reinvest in our technology infrastructure, but also invest in our employees,” says Jeff Bolton, vice president, administration, Mayo Clinic. To that end, Mayo Clinic made an additional contribution of $190 million to its pension fund, bringing the total 2014 contribution to $410 million. This additional investment was necessary to ensure Mayo Clinic will meet its commitment to current and future retirees.
“Our financial performance gives us the flexibility to invest in new initiatives that will help our patients,” says Kedrick Adkins Jr., Mayo chief financial officer. These funds are committed to mission-advancing projects. The funding includes five areas of focus, Adkins says:
Information technology infrastructure: $1.5 billion over multiple years to fund a new electronic health record and revenue cycle management system, network refresh and data transaction security upgrades.
Employee pension plan: $410 million contribution in 2014. This includes an originally planned $220 million contribution and an additional $190 million contribution as a commitment to fully fund the pension plan for employees.
Practice innovation: approximately $200 million in 2014 which includes funding of Mayo’s three hybrid centers — individualized medicine, regenerative medicine and the science of health care delivery — as well as Mayo Clinic practice priorities and information knowledge management activities.
Education: $275 million in 2014 funding for educational activities.
Research: $648 million in 2014 funding for research activities — $276 million from Mayo and $372 million from external resources.