Dive Brief:
- The Mayo Clinic reported turning a profit in the first quarter of the year, although its expenses rose significantly compared to the first quarter of 2020, which was mostly completed before the COVID-19 pandemic became a significant issue.
- Overall, net income for the Minnesota-based multistate hospital system totaled $ 243 million without counting $ 11 million generated by restricted assets. That compares to a loss of $ 30 million during the first quarter of 2020. Cash and investments also rose by $ 781.7 million.
- Moreover, most patient volumes returned to pre-pandemic levels. Outpatient visits for the quarter matched 2019 numbers, while surgical volumes exceeded those of 2019, although inpatient days were down. Mayo Clinic officials did not release any data related to relief money from the Coronavirus Aid, Relief, and Economic Security Act, suggesting that it has gotten past needing any more financial assistance to weather the remainder of the pandemic.
Dive Insight:
The darkest days of the pandemic required some healthcare systems to be granted or borrow billions of dollars from the federal government under the CARES act to continue their operations. For large national providers such as the Mayo Clinic, those dark days appear to be behind them. Like Kaiser Permanente, it has returned to profitability this past quarter.
In addition to returning healthily to the black, the Mayo Clinic reported that patient volumes have leaped over its numbers from the first quarter of last year, when COVID-19 led to canceling all but emergency procedures and encounters. Outpatient visits rose to 1.16 million, up from 1.13 million for the first quarter of 2020 and virtually matching 2019’s volume.
Surgical cases rose to 32,689, compared to 31,165 in the first quarter of 2020 and 31,967 during the first quarter of 2019. However, admissions remain depressed at 29,230 for the quarter, down 4.6% from the first quarter of last year and 8.8% from 2019.
Meanwhile, expenses soared. Salaries and benefits reached $ 2.1 billion for the quarter, up 11.1% compared to the first quarter of 2020 and 11.6% from 2019. Costs for supplies and services also rose, reaching nearly $ 1.1 billion, up 5.6% from the year-ago quarter and 12.6% from 2019.
Overall operating expenses rose 8.4% from last year, reaching $ 3.1 billion. The only area where it did not rise was in its finance and investment arm, which does not require supplies and equipment. However, the $ 33 million that was expended in that area was little more than 1% of the overall total.
For the moment, it appears that Mayo Clinic will make do even in the face of dramatically rising costs. In addition to posting a hefty net income for the quarter, it entered the second quarter with $ 15.2 billion in cash and investments on hand, up nearly $ 782 million from the end of 2020. Its trailing one-year return for long-term investments was 34.1%.