Mayo Clinic posted a $1.2 billion profit last year, a 66% increase from its 2020 earnings thanks to a major recovery in patient volumes.
The hospital system generated $15.7 billion in revenue for 2021, a 14% increase from 2020, according to an earnings report released Monday. But the system did see a major increase in expenses thanks to higher staffing costs and other needs related to fighting the virus.
“Mayo Clinic staff have persevered heroically through more than two years of the pandemic and provided the highest-quality care for the historic numbers of patients who have trusted us with their health care,” said Gianrico Farrugia, president and CEO of Mayo Clinic, in a statement.
Mayo’s $1.2 billion in net operating income is a 66% increase compared to the $728 million it generated in 2020. Net medical service revenue was also up in 2021, with Mayo generating $13.3 billion compared with $11.5 billion for 2020.
A major driver was an increase in admissions in 2021, where volumes outpaced not just 2020 but also 2019.
Mayo had 4.8 million outpatient visits in 2021 compared to 4.2 million in 2020 and 4.9 million in 2019.
Surgery cases rebounded to 137,186 compared with 121,267 for 2020.
However, patient days were on the upswing in 2021 for Mayo Clinic with 698,258 compared with 622,768 in 2020 and 666,281 in 2019.
But operating expenses increased by 11% to $14.5 billion in 2021 compared to 2020.
“The increase over 2020 was primarily due to the recovery from 2020’s COVID-19 impaired volume, but also due to higher expenses in 2021 related to the combination of pandemic-related spending, such as vaccine clinics and testing center; an incremental $97 million for employee recognition; and acceleration of facilities and select project expenses into the fourth quarter,” Mayo said in its earnings report.
The system spent $8.7 billion in salaries and benefits in 2021, a nearly 9% increase compared to the year before and making up nearly 60% of all expenses.
Hospital systems across the country have faced major spikes in staffing expenses due in part to high contract labor rates and burnout and other factors among a beleaguered workforce.
In Mayo’s case, the increase in labor costs also “reflected the challenges of maintaining full clinical, research and academic schedules at a time of significant labor shortages,” the system said.