Hospitals

Mayo Clinic improves operating margin in 2010

Mayo Clinic had a solid 2010. Read more about how the Minnesota healthcare organization performed last year as it held down its expenses while it grew revenue.

By Arundhati Parmar on February 25, 2011 9:28 am

The nonprofit Rochester, Minnesota-based Mayo Clinic recently announced that 2010 was a solid year with net-operating income of $515 million, which translates to a 6.5 percent operating margin.

Just a year ago, Mayo garnered $333 million in net-operating income with a 4.4 percent operating margin. 2009 marked a rebound from the year before when the world-renowned healthcare organization just broke even.

In 2010, income from practice was $538 million compared to $474 million in 2009. Like in previous years, the entire $515 million in net-operating income will be reinvested in patient care, education and research programs, per the organization’s mission.

The 6.5 percent operating margin was achieved by controlling expenses down so that the year-over-year increase was 2.5 percent. In the same period, revenue grew 4.7 percent.

“While the national and global economy is recovering slowly from the 2008 financial crisis, Mayo Clinic employees have done a remarkable job achieving a rapid recovery and positioning the organization well for the future,” said John Noseworthy, Mayo president and CEO, in a statement.

In its announcement highlighting the 2010 financial performance, Mayo also outlined some capital projects it is pursuing. They include:

  • The emergency department at Saint Marys Hospital on Mayo’s Rochester campus will expand by 10,400 square feet. The additional space is expected to provide improved efficiency and extra capability to monitor and treat patients.  The project will also provide space for general radiology services in the emergency department, trauma resuscitation rooms and a new ambulance garage. The cost of the renovation and expansion is $25.8 million.
  • The Mayo Clinic Board of Trustees also approved an additional $5.2 million for the Clinical Image Viewing Convergence Program, that will play a critical role in the effort to integrate Mayo Clinic’s multi-site radiology practice. The total cost of the project is $23.2 million.

Mayo employs more than 56,000 employees in total, including 46,239 in the Midwest, 4,771 in Florida and 5,067 in Arizona.