The insured patient generation created by the Affordable Care Act (ACA) is gravy for the Mayo Clinic.
The Mayo Clinic posted huge gains to its bottom line as a result of the ACA. It makes unaudited financial data public because of the municipal bonds it has issued to improve its infrastructure in Rochester, the city where it's based, the Rochester Post-Bulletin reported.
Mayo Clinic's net income rose 74 percent during the first half of 2014 to $347 million. That compares to $197.4 million during the first half of 2013. Its revenue was relatively flat, up 5 percent, to $4.77 billion compared to last year's first half revenue of $4.55 billion.
The bump Mayo received in net income was related to the enactment of the ACA starting in early 2014, the Post-Bulletin speculated. For-profit hospital chains such as HCA Holdings, Tenet Healthcare Corp. and Universal Health Services also reported a rise in earnings as a result of the ACA, which led to an increase in insured patients and a drop in uncompensated care. Another for-profit chain, LifePoint Hospitals Inc., recently reported a 44 percent increase in its profit.
Mayo's expenditures for salaries and benefits also dropped $33 million, suggesting it may have cut some positions.
Mayo has been in an aggressive expansion mode in its home state of Minnesota, where it is spending $5.6 billion on new construction. It was able to obtain nearly $600 million in state funds to supplement its building projects.
Mayo officials themselves were mum on the reasons behind the bottom line boost. "Mayo Clinic publicly reports on our operational and audited financial results once a year," spokesperson Karl W. Oestreich told the Post-Bulletin. "Mayo ... will only be providing comment once a year when we release our year-end operational and financial results."
To learn more:
- read the Post-Bulletin article