Mayo Clinic's operating income drops 48.7%

Rochester, Minn.-based Mayo Clinic recorded a net operating income of $154 million in the second quarter of 2020, a decrease of 48.7 percent compared to the same period last year, according to recently released financial documents.

In the three-month period ended June 30, Mayo Clinic recorded revenue of $3.2 billion, compared to $3.4 billion in the same three-month period in 2019. In the second quarter, Mayo's net medical service revenue hit $2.4 billion, a 16.2 percent dip from the same quarter one year prior. 

Mayo Clinic's expenses decreased 2.1 percent in the second quarter of this year, to $3.1 billion. 

It credited management expense reduction measures with savings of $300 million in May and June. Those measures included salary reductions, suspension of employee retirement matches and temporary workforce reductions. In May, 9,800 employees were furloughed or had their hours adjusted, and in June, 8,600 staff members were  either furloughed or had their hours adjusted, according to the report.  

Mayo Clinic received $303 million in federal and state relief funding in the second quarter. The health system recognized $173 million of the funding, and said it is deferring recognition of the remaining funds until the financial impact of the pandemic is clear.

Mayo also said it repaid in July the $915 million in Medicare advance payments received in April.

At the end of the three-month period ended June 30, Mayo Clinic had $10.3 billion in net assets, including donor restrictions. 

"This performance spanned a remarkable period that included the near closure of outpatient clinical practice and a deferral of all elective and nonemergent care in April, the rapid reopening of the practice in May, and stabilization at near normal levels of volume in June. The receipt of provider relief funds as well as expense reductions also played significant roles in the quarter’s performance," Mayo Clinic said.

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