Mayo Clinic's first financial report of 2021 shows signs of normalcy, with ripples of the COVID-19 pandemic poking through.
Growing volumes helped the Rochester, Minn.-based academic medical center draw $273 million in income on $3.7 billion in operating revenue in the quarter ended March 31, a strong, 6.6% margin. That puts Mayo solidly within the ranks of its not-for-profit peers that swung into the black in the first quarter of 2021 after losing money in the prior-year period. Mayo lost $30 million on operations on just under $3.2 billion in revenue in the first quarter of 2020, which includes the first two weeks of the pandemic.
Dennis Dahlen, Mayo's chief financial officer, attributed Mayo's strong performance to the efforts of its "committed staff" who have been on the front lines caring for COVID patients.
Unlike its peers, Mayo did not record any federal COVID stimulus grants in the first quarter of 2021. At the end of 2020, Mayo returned nearly half of the Provider Relief Fund grants it had received, $156 million of the $338 million the government had sent.
Surgeries at Mayo were up almost 5% in the first quarter of 2021 from the prior-year period. Outpatient visits were up almost 2% in that time. Admissions, by contrast, were still down from the 2020 period by 4.6%.
Comparing first quarter 2021 volumes to the same period in 2019 shows there's more recovery to be had. Surgeries were up just 2.3% in that time, while outpatient visits were flat. Admissions were down 8.8%.
Mayo's revenue grew 17% in the first quarter year-over-year. Within that, medical service revenue was up 12%. Contributions, by contrast, were down 17.4% from the first quarter of 2020.
Expenses are also growing, but at a slower clip. Mayo recorded just under $3.5 billion in expenses in the recently ended quarter, up 8.4% year-over-year. Within that, salary and benefit expenses had grown 11%, and supplies and services was up 5.6%. Finance and investment, by contrast, had dropped almost 3%.
Strong investment returns also boosted the not-for-profit system's performance, leading to $782 million in net income in the recently ended quarter, a 21.1% profit margin. Dahlen said investment returns reflect generally positive market trends.
Mayo said it recorded $422 million in investment gains between the end of 2020 and March 31, 2021. That contributed to a cash and investment balance totaling $15.2 billion as of March 31, a $782 million uptick since the end of 2020.
Last week, Mayo and Kaiser Permanente teamed up to invest $100 million in the hospital-at-home services company, Medically Home. That's after pilot programs at both systems found readmission rates dropped and satisfaction improved using the company's services.