The Mayo Clinic finished 2009 with its strongest operating margin in five years after breaking even the prior year. Nearly flat expenses helped the Rochester, Minn.-based system swing its operating income to $333.2 million for the year that ended in December from nothing in 2008. The gain, on revenue that grew roughly 5% to $7.6 billion, delivered an operating margin of 4.4%, the largest since 5.6% in 2004. Mayo's salary and benefit expense grew 3.7% in 2009 to $4.8 billion. The system's payroll shrank by 1,034 people to 55,930 in 2009, largely through attrition, according to the Mayo Clinic. Supply and service expenses dropped by 5.9% to $1.68 billion. The system, which includes 20 hospitals in five states, recovered nearly all the assets lost during market upheaval in 2008 as its investments rebounded and changes to its pension and retiree benefits curbed Mayo's liability by $1 billion, said Jeff Bolton, the system's chief financial officer. Capital spending that was curbed during the economic downturn and credit market distress will gradually return to historic levels should Mayo continue its strong performance, Bolton said. Mayo spent $361 million on capital projects in 2009 compared with $500 million to $700 million per year historically, he said.
Mayo sees best operating margin in five years
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