The Mayo Clinic reported a 1.5% increase in revenue in 2020, with total revenue reaching nearly $14 billion despite major challenges from the pandemic.
Mayo is the latest large hospital system to close out 2020 on a good financial note, with funding from the CARES Act helping the system recover from a slight drop in medical service revenue for the year.
“During a year of remarkable challenge, the organization produced very strong results and in fact finds itself strong on most financial metrics than it was a year earlier,” an earnings report released late Friday said.
Mayo posted revenue of $13.9 billion in total revenue for 2020, slightly above the $13.7 billion it generated in 2019. That was despite medical service revenue dropping nearly 1% to $11.5 billion compared with $11.6 billion in 2019.
Revenue contributions from a provider relief fund created under the CARES Act and other relief funds gave $199 million for the system.
Mayo received $355 million in money from a $178 billion CARES Act fund. It also received $915 million in accelerated Medicare payments. The system paid back those accelerated payments by July 2020.
Mayo returned $156 million of its CARES Act funding in December “after careful consideration of financial performance for the year,” the report said.
It is the latest system to return relief funds. HCA Healthcare returned $1.6 billion in CARES Act funding.
While Mayo’s total revenue was up, its net operating income at the end of 2020 was down 23% compared with 2019. Mayo had net operating income of $728 million in 2020 compared with $952 million for 2019.
Like other hospital systems, Mayo saw a major increase in expenses last year due to the pandemic.
“The unpredictable nature of the pandemic required constant attention to the management of operating expenses, which grew 3.3% year-over-year,” the release said.
Salaries and benefits expenses grew the highest by 5.1%. Hospitals across the country have faced higher prices for extra staff, especially travel nurses, to ensure enough capacity to fight the virus.
Mayo is the latest large healthcare system to post earnings after a roller-coaster 2020. Tenet Healthcare, for instance, posted a profit of $414 million for the final quarter of the year.
Hospitals faced plummeting revenues at the onset of the pandemic after they were forced to cancel or postpone elective procedures to preserve capacity to fight the virus. But major cost controls, liquidity and federal relief funds have helped to plug the financial shortfalls caused by the pandemic.