Rising wage and supply costs, in addition to poor performance in the financial markets, sent Mayo Clinic's profit plummeting by more than half in 2022.
The Rochester, Minnesota-based nonprofit reported $2.2 billion in net income for 2022, a 58.4% drop from $5.3 billion in 2021. Operating income dropped 50.9% to $595 million, the system said Monday.
Annual revenue grew 3.6% to $16.29 billion. Expenses increased by $1.18 billion, or 8.1%, to $15.7 billion, including a 5.9% increase for salaries and wages and a 12.8% hike for supplies and services. Spending on contract labor increased 37% from 2021. Cash and investments decreased by $747 million, largely driven by investment losses.
Mayo Clinic, which has more than 76,000 employees, has its main campuses in Rochester; Phoenix; Scottsdale, Arizona; and Jacksonville, Florida, plus additional locations across Minnesota, Wisconsin and Iowa.
Despite financial challenges, Mayo Clinic did invest in its operations last year. It broke ground on two hospital projects in Minnesota and Wisconsin, followed by the start of construction on an oncology building in Florida. Mayo Clinic also expanded virtual services to emergency medicine, intensive care and neonatology for rural hospitals. It estimates 15% to 20% of patient visits were virtual.
The system last August announced a collaboration with biomanufacturing company National Resilience Inc. to develop biotherapeutic treatments for complex diseases.
Mayo Clinic noted in its 2022 performance overview a sustained demand for services, with outpatient visits, surgeries and patient days higher than 2021 and 2020 totals. But hospital admissions lagged by nearly 4% compared with 2021, and facilities were pushed to capacity because of changes in patient mix and longer lengths of stay.
