Mayo Clinic posted a $227 million net loss for the first quarter of the year, the latest hospital system to grapple with a decline in investments and a surge of labor expenses.
While it posted a net loss, the health system did report $142 million in operating income for the quarter, for a 3.6% operating margin, according to its earnings report released late Thursday. It generated $3.9 billion in revenue for the quarter.
Several systems have posted losses in the first quarter due to heightened labor expenses as well as other cost pressures such as inflation.
“Workforce shortages and corresponding labor cost inflation, persistent supply chain disruptions and shortages, a higher interest rate environment and capital market volatility have all taken center stage for management attention,” the earnings report said.
Mayo added that the first quarter’s performance does reflect “long-term plans for revenue diversification, digitization of healthcare when appropriate, using platforms to accelerate innovation and investing in the treatments of complex and serious clinical care.”
Mayo’s operating expenses tallied $3.8 billion for the quarter, a roughly 10% spike compared to the same period in 2021.
Driving those costs were $2.3 billion in salaries and benefits, which increased 7.4% over the prior period and made up nearly 60% of all total expenses.
“The increase in salaries and benefits and supplies and services is due to contracted labor and temporary pay practice premiums,” the system said.
The system also experienced lower admissions compared to the previous two years. In the first quarter, Mayo saw 29,117 patient admissions compared with 29,226 in the same period in 2021 and 30,645 in 2020.
However, outpatient visits had increased compared to the previous two years. Mayo had 1.19 million outpatient visits compared with 1.15 million in 2021 and 1.13 million two years ago.
More hospital systems have experienced increases in their outpatient visits as patients are starting to return to facilities for foregone or delayed care due to the pandemic.
But systems are also grappling with massive investment losses and a continuing staffing shortage. Some hospitals such as Providence Health and Kaiser Permanente experienced losses of several hundred million due in part to investment losses and a surge of deferred care.
Editor's note: A previous version of this headline incorrectly said Mayo Clinic posted an operating loss.