The Mayo Clinic loosened a tight grip on expenses last year with spending on technology and expansion efforts that markedly eroded its profit margin. Executives said the outlays would position the health system to thrive amid changing markets and health policy.
Mayo Clinic, based in Rochester, Minn., ended last year with a margin of 4.5% with operating income of $395.4 million on revenue of $8.84 billion. That's a drop of roughly one-third compared with the health system's operating income of $610.2 million on revenue of $8.32 billion the prior year, or a margin of 7.5%.
Mayo Clinic's investments come at a time when hospitals and health systems are squeezing operating expenses in response to a weak economy, sluggish growth in demand for hospital care and payment cuts from private and public insurers.