Sicker patients, who had to be hospitalized longer, drove Mayo Clinic's larger operating surplus last year, when compared with 2020's financial figures.
The Rochester, Minnesota-based health system posted a 7.7% operating margin in calendar year 2021, which is higher than many of its not-for-profit peers. Mayo generated $1.2 billion in operating income on $15.7 billion in revenue last year—compared with $728 million on $13.8 billion in operating revenue in 2020, a 5.3% operating margin.
"Mayo Clinic staff have persevered heroically through more than two years of the pandemic and provided the highest quality care for the historic numbers of patients who have trusted us with their healthcare," Mayo's CEO, Dr. Gianrico Farrugia, said in a statement.
Mayo said longer lengths of stay, along with higher acuity patients, drove its hospital census levels to new highs last year, with a weekly average of 2,100 patients—8.1% higher than in 2020. The health system's hospitals were 92% full, on average, which it said was much higher than in pre-pandemic 2019.
These figures were reported even though admissions to Mayo's hospitals were still down 6.8% in 2021, compared with pre-pandemic 2019. Nonetheless, admissions did improve 5.7% from 2020.
On the other hand, outpatient visits were also still down from 2019, by 1.8%. They were up 12.5% from 2020. Other volume metrics—patient days and surgical cases—were up from both 2019 and 2020.
Mayo's revenue grew 14% year-over-year in 2021, much higher than the 1.5% uptick in revenue the health system reported in 2020. Expenses grew 11.1% year-over-year to $14.5 billion.
Strong investment returns drove Mayo's net income to nearly $3.6 billion, a 22.7% profit margin. That's up by more than $1 billion from 2020, when net income was almost $2.5 billion.
Kaiser Permanente, a large integrated health system based in Oakland, California, benefited from similarly strong investment gains in 2021. The health system had its most profitable year yet, posting $8.1 billion in net income on $93.1 billion in revenue, a smaller profit margin than Mayo's. Kaiser's operating margin was a slim 0.7%, much smaller than Mayo's 7.7%.
Mayo's cash and investments totaled almost $18.1 billion at the end of 2021, an increase of $3.6 billion from the end of 2020. Mayo explained that most of the uptick was from investment gains, but a sizable chunk came from operating cash flow.