Mayo Clinic generated $288 million in profits in the third quarter of the year with help from federal COVID-19 relief funding.
The Minnesota-based system’s earnings released late Thursday comes as hospitals across the country are still struggling to recover from a massive financial blow left by the COVID-19 pandemic back in March and April.
Mayo Clinic reported $3.65 billion in revenue for the third quarter, a 7.4% boost over the same period in 2019.
The system’s net operating income of $288 million was 18% above the $244 million in the third quarter of 2019.
But overall Mayo Clinic’s profits are down for the year so far. For the first nine months of 2020, Mayo reported revenue of $9.98 billion which was a 1.5% decline from the comparable period in 2019.
The system also posted profits of $355 million, a 51.4% decline from the 2019 profits of $731 million.
Mayo’s earnings come as the system took action to mitigate massive financial holes caused by the COVID-19 pandemic in March. Hospitals across the country had to cancel or postpone elective procedures and patient volumes plummeted as people were afraid to go to the hospital for fear of contracting the virus.
Mayo said it took appropriate measures to respond to the revenue drops, reducing its “supplemental and contract workforce, halting most construction projects, deferring or delaying most strategic initiatives and announcing temporary salary and staff reductions.”
The system also got $338 million in relief funding from a $175 billion fund included in the CARES Act.
Mayo also got $915 million in advance payments as part of the Medicare Accelerated and Advance Payments Program, but the money is essentially a loan that must be repaid.
Mayo noted that volumes varied considerably but “have recently stabilized at slightly below normal levels,” the earnings report said.
However, the system cautioned that “COVID-19 could still negatively affect the operating margins and financial results of the clinic as the duration of the pandemic is unknown,” Mayo’s earnings said.
Mayo is the latest health system to post profits in the third quarter despite lingering declines in patient volume.
But some other hospital systems are not faring as well. Providence reported a $214 million loss for the first nine months of 2020 as its operating expenses ballooned.