Mayo Clinic saw financial and operational improvements in 2023 that lifted its net operating income to $1.1 billion, according to financial results released Feb. 27.
The Rochester, Minn.-based system recorded revenue of $17.9 billion against expenses of $16.8 billion in 2023, resulting in net operating income of $1.1 billion and a 6% operating margin.
The latest results mark a comeback for Mayo, which has seen cyclical losses and gains in the past few years. It reported operating income of $595 million for 2022 compared to a $1.2 billion gain in 2021. Mayo cared for more than 1.3 million patients from more than 130 countries in 2023.
"By every measure, Mayo Clinic made excellent progress in 2023 towards our goal of creating a better healthcare system for the United States and globally," Gianrico Farrugia, MD, Mayo president and CEO, said.
With more than 80,000 employees, Mayo spent $10.5 billion on salaries and benefits in 2023. The system raised salaries, with most employees seeing a 4% minimum increase to base pay effective next month, which supported retention and recruiting. Mayo added about 14,000 staff into new roles in 2023, a 4.9% increase from 2022.
Labor costs made for one steadying factor for the 2023 results. Mayo Clinic CFO Dennis Dahlen told The Star Tribune that the system largely eliminated the contract and temporary labor expense — approximately $160 million — that weighed down its 2022 results.
"We do have a few residual pockets of staff shortages, but our attrition rate is back to pre-pandemic numbers," Mr. Dahlen told the local news outlet.
The health system recorded capital expenditures of $1.18 billion, with 47% allocated to major projects. The system is currently engaged in projects to double the size of its campus in Phoenix, expand its hospital in Jacksonville, Fla., to meet growing demand for complex care; and build new Mayo Clinic Health System hospital bed towers in La Crosse, Wis., and Mankato, Minn.