Mayo Clinic $5B expansion sparks financial planning reboot

Mayo Clinic recently announced plans to make a $5 billion investment in its Rochester, Minn.-based campus late last year to replace old facilities and find "creative growth" areas, said Allison Viramontes, CFO of Mayo Clinic Arizona, at the Becker's 14th Annual Meeting in Chicago on April 9.

 As part of the initiative, titled: "Bold. Forward. Unbound." Mayo Clinic will bring together everything patients need in unified care "neighborhoods." Services include labs, imaging, consultations and treatments specially designed for patients with complex diseases. Mayo Clinic is also designing new buildings on the "flexible grid" concept so as capacity fluctuates, rooms can transition from patient rooms to operating rooms, diagnostic suites, and more.

The initiative is a huge undertaking and the executive team has adjusted financial planning as a result. Instead of relying on historical trends to make projections, Mayo Clinic is imagining what healthcare will look like five to seven years in the future to make financial decisions today.

"We're having to reimagine what transformation is going to look like in healthcare, especially in terms of the workforce," Ms. Viramontes said. "Are we going to expect the same number of FTEs that we generally do based on the revenue base, or are we going to start seeing a smaller footprint of FTEs and maybe more investments in technology? Those are the things we're really starting to contemplate as we look at what our sources and uses of cash will look like in the future and our funding mechanisms for this size of a capital investment."

Ms. Viramontes also said Mayo Clinic is refining its forecasting skills.

"Ever since the pandemic, we've really doubled down on forecasting and we now have a monthly forecast that we refresh every month that helps us predict where we'll be for the month so we can as much as possible change that outcome [if needed]," she said. "If in the middle of the month we see we're a little off course, we're able to have conversations with the areas that may be a little bit behind on a month-to-date basis to change the destiny of the month and make sure we round out where we want to be."

The system also does forecasting for the full fiscal year, so every month executives can look at the current month and take into account known changes to pull through the remainder of the year. The new process allows leaders to keep their finger on the pulse of progress toward the larger goals at any given time in the year.

"All of our sites are doing this and we're able to consolidate and really give our executive leaders a good line of sight into how the year is going to play out," said Ms. Viramontes.

Mayo Clinic has the reputation of being on the cutting edge of clinical technology and care delivery; its business arm, Mayo Clinic Platform, is also a model of how health systems can leverage AI and technology to reimagine operational efficiency and the patient experience. Mayo Clinic Platform has been creating a distributed data network of de-identified patient data for solutions architects to leverage as they create new algorithms and find new solutions for digital health. There is now 80 million patients' information in the platform.

"We have a really positive outlook for the next 12 to 24 months, continuing to expand our footprint in our core markets and we're really heavily focused on automation," said Ms. Viramontes.

Mayo Clinic has made progress in using automation to close the gaps in workforce shortages and has challenged team members to identify automation and AI ideas to boost the workforce. The system put out a request for proposals to split ideas from anyone in the enterprise and the leadership team reviewed and vetted all submissions. Eight ideas were selected and Mayo Clinic is now investing in them and finding ways to scale.

"That's one of the most exciting things that we see on the horizon and we're really starting to actually achieve some dividends from that as well," she said.

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