Mayo Clinic maintained its solid start to the year, reporting this week a $812 million (8.3% margin) six-month income from current activities for the period ended June 30.
The total, which is inclusive of certain philanthropic and investment return income, reflects incomes of $363 million (7.7% operating margin) and $449 million (9% operating margin) during the nonprofit’s first and second quarters.
Both of these were well ahead of the prior year, when Mayo Clinic reported a $149 million and $300 million income from current activities for those respective quarters.
Limiting the numbers to Mayo Clinic’s operating activities (i.e. excluding investment return and contributions) placed the system at a $201 million income (4% margin) for the most recent quarter and $287 million (2.9% margin) for the first half of 2024. Each far outpaced the $71 million of the first quarter of 2023 and $37 million of the first half of 2023.
“Fueled by our core values and a commitment to innovation, Mayo Clinic's strong second-quarter results enable the organization to invest in its staff, enhance its physical and digital infrastructure and advance its strategic goals to Cure, Connect and Transform healthcare,” Mayo Clinic’s management wrote in a quarterly filing. “This performance reflects the sustained commitment of Mayo Clinic’s exceptional staff, who are dedicated to ensuring the needs of Mayo's growing number of patients come first.”
Mayo Clinic’s total operating revenue during the second quarter increased 12.1% year over year to just over $5 billion, with almost $4.2 billion of that coming from net medical service revenue.
Management highlighted the quarter and the half’s “strong outpatient, surgical and hospital volumes and increased service demand.” Specifically, across six months, the system saw a 5.9% rise in outpatient visits, a 3.4% increase in surgical cases, a 7.1% jump in admissions and a 6.3% increase in patient days year over year.
Second-quarter operating expenses rose more slowly, 9.4% year over year, to about $4.6 billion. Salaries and benefits spending increased 7% to match the system’s higher volumes and include a 4% annual pay increase across the workforce, management wrote. Mayo Clinic also logged a 13.3% rise in supplies and services spending, an 11.4% increase in facilities expenses and a 2.1% bump in finance and investment spending.
With other noncurrent items (certain philanthropic contributions, unallocated investment return, etc.), Mayo Clinic logged a bottom line of $613 million for the second quarter and over $1.5 billion for the first half. The system has tallied $669 million in capital expenditures as of June 30 and increased its cash on hand to 361 days.
Rochester, Minnesota-based Mayo Clinic is coming off a recovery year in which it logged a “mission-sustaining” 6% operating margin. That year, it also announced its "Bold. Forward. Unbound. in Rochester" project, the largest capital investment in the system’s history, to create a campus of innovative spaces to research developing healthcare technologies.
The health system, which also operates major campuses in Arizona and Florida as well as in international locations, cared for approximately 1.3 million patients from more than 130 countries in 2023.