The author of this article: Zhou Lujing
As the top three in the U.S.NEWS Hospital rankings in the United States all the year round, Mayo Clinic has obviously become a belief in the medical profession and can be called “Medical Mecca”.
In the 2021-2022 National Hospital Rankings, Mayo once again tops the list (Source: U.S.NEWS)
Mayo’s main campus is in Minnesota, with two other campuses in Arizona and Florida. This small clinic in Rochester, Minnesota, through a century of hard work, has written a small town into the ultimate medical sanctuary.
In 2014, because of the project, I was further exposed to Mayo’s “patient-centered” philosophy. In 2017, I further learned Mayo as a management learner.
Photo courtesy of the author
As a non-profit organization, Mayo chooses to make its own financial statements public, what does it reveal that only a doctor can see?
Analysis of data characteristics in the past three years
Overall revenue review
Visits: Over 1.2 million patients from 135 countries across the U.S. and around the world
Physicians and residents: 6900
Management and technical care: 63,100
All clinical staff combined: 70,000
Full-time researchers: 4,221
Physicians involved in research: 794
2019 overall revenue: $13.8 billion (approximately RMB 87.521 billion)
Beginning in 2020, the COVID-19 epidemic has spread around the world, resulting in a significant reduction in the number of cross-border medical visits in the United States. In addition, with the priority of treating patients with severe COVID-19, Mayo’s revenue is higher than that of 2019. The year-on-year level of income fell by 51.4%.
But despite this, Mayo, the world leader of non-profit organizations, is really a “profit organization”. In the third quarter of 2020 alone, Mayo’s revenue reached $3.7 billion (approximately RMB 23.4 billion yuan).
We take the First Affiliated Hospital of Zhengda University, which is known as the “No. 1 Courtyard in the Universe” as an example. Its revenue that can be inquired is the published data in 2016: 9.5 billion RMB.
In other words, despite the difficult operation brought about by the new crown epidemic, Mayo’s income in one quarter can basically reach the income of Zhengda First Affiliated Hospital for 2.5 years.
In 2021, Mayo’s officially announced third fiscal quarter has grown significantly compared to the same period in 2020, totaling $4.018 billion. A steady pickup in clinical volumes helped Mayo achieve $324 million in net operating income.
So don’t think that non-profit medical institutions don’t make money, people can really make money, but the money they make needs to be reinvested in the medical industry, laboratories, equipment, etc., and capitalization is not allowed That’s it.
Characteristics of revenue: general hospital + satellite branch clinic revenue
Of course, such strong revenue was not achieved by just one Rochester general hospital. According to the financial report, Mayo’s medical revenue is divided into general hospital revenue + satellite branch clinic revenue, and the two are comparable, showing a beautiful feature of hierarchical diagnosis and treatment.
Mayo’s three main campuses handle moderate to complex conditions: including oncology, transplantation, cardiovascular, neurological, and international patients. More middle-level medical care is responsible for providing community-based family medicine or general practice, and if the general practitioner cannot solve it, it will be referred upwards.
Mayo Health System, which primarily provides satellite clinic services, covers as many as 50 satellite clinics and small hospitals in Wisconsin, Minnesota, and Iowa to be closer to the communities where people live. At the same time of rational allocation of medical resources, it also avoids the drawbacks of patients rushing around to seek medical treatment due to non-major diseases.
The introduction map of the Mayo Clinic network reads “Bringing patients closer to home” (photo courtesy of the author)
In addition to the medical system of Mayo’s own system, there are also members of the Mayo Medical Consortium (MCCN) and independent referral agencies (not included in the financial report). These primary medical services require intermediate and high level after screening The treated patients are accurately referred to the main hospital for further treatment. This not only ensures the accurate matching of patients’ conditions, but also ensures that the main campus and satellite clinics can operate most efficiently within their own level and scope of diagnosis and treatment.
Photo courtesy of the author
The doctor implements an annual salary system and attaches great importance to the evaluation of values
Glassdoor Economic Research Blog notes that over the past year: Mayo registered nurse average salary increased 3.4% to $61,306; pharmacy staff increased 4.4% to $30,522; medical assistant increased 6.3% to $61,306 $33,244; Physicians increased 2.7% to $197,297; Medical Technicians increased 0.1% to $53,221.
As we all know, Mayo’s doctors are paid annually. Income has nothing to do with outpatient volume, surgical volume, scientific research output, performance, medical quality, etc., and naturally it does not exist. So-called performance bonuses and dividends.
Mayo’s salary design is roughly like this: if the doctor’s default annual salary is 500,000 US dollars, he will get 60% of the default annual salary in the first year, which is 300,000, and then increase in equal amounts every year. , until reaching the target salary of 500,000 by the sixth year. Once the target salary is reached, it will remain stable at this amount regardless of your seniority.
According to Mayo’s introduction, the average income of doctors in the hospital is between 200,000 and 600,000 US dollars. Whether it is the so-called department director or the newly recruited Attending, the salary will not be very different.
Photo courtesy of the author
However, also because of this “big pot meal” salary setting, Mayo does not allow her full-time doctor to practice multi-site practice in foreign institutions, It is limited to what we mentioned earlier The Mayo Health System (community medical system) conducts multi-site practice, which is actually very rare in American hospitals.
I once asked Mayo’s managers a question: Since it is an annual salary system and there are no other incentives, how to recruit those great doctors?
The answer I got at the time was surprising: the Daniel doctors recruited by Mayo must have an attractive salary in the industry (so recruiting Daniel doctors is a matter of minutes). However, when Mayo recruits doctors, it is very important to check whether the doctor is in line with Mayo’s values and culture.
Photo courtesy of the author
Every business has its values, mission and vision. Over the years, Mayo’s values ”The needs of the patient comes first” have become familiar to almost every domestic medical practitioner.
Mayo’s mission and vision also revolves around patient-centricity: Mayo Clinic will provide an unparalleled experience as the most trusted partner for health care (Mayo will serve as the most trusted medical partner, providing unparalleled patient checkups).
In the evaluation of each staff member, values are one of the content to be evaluated. Mayo’s performance is evaluated based on values. Ordinary employees rely on self-evaluation. Physician staff will pass self-evaluation. Or combined with a 360-degree assessment.
Performance reviews are annual and include 360 assessment feedback from 4-6 people, supervisor comments, self-assessment, Mayo Core Values applicable to each position, professional competencies, previous year goals level of achievement and achievements, goals and plans for the new year.
No matter how famous the doctor is, Mayo will say no to the doctor once the interview or probation period finds that the employee’s culture does not match. Culture and values come first, which may ensure that Mayo’s “patient-centered” medical value concept can be passed down to this day.
Of course, finding medical technicians with strong and value-aligned medical technicians also comes with high expenses.
Look at Mayo’s comparison of expenses over the same period, employee wages and benefits increased by 7.7%. Good guy, the general salary increase in the domestic industry is estimated to be in the range of 5% this year.
The price charged on the back
Someone will ask: Such a high-end hospital must be very expensive, right? indeed so.
Currently, medical services in the United States are billed according to the CPT CODE. The following quotation is for Image-Guided Thoracentesis (CPT 32555), and the standard self-pay price according to the Mayo official website search is $3,678, which includes $2,411 for hospital facilities and $1,267 for medical professionals (health care providers involved).
Mayo official website screenshot
In addition, U.S. hospitals can choose different pricing for the same CPT CODE treatment. The average mainstream charge is $2,353. The hospital can negotiate a discounted price with the insurance company, which means that Different insurance companies pay different prices to hospitals.
In Shanghai, the 2017 Medicare Blue Book catalogue shows a charge of 200 yuan for thoracentesis. Even if an additional ultrasound guide is added, an additional 30 yuan will be generated, for a total of 230 yuan. Private hospitals in my country set their own prices, and the fees are usually 3 to 8 times that of public hospitals, so the mainstream is 600 to 1600 yuan.
Who will bear the cost of such expensive medical treatment? insurance.
In the United States, the commercial insurance system is very mature, so most patients use commercial insurance or government insurance (Medicare / Medicaid) for settlement, and Mayo also accepts these two US government insurance and various U.S. commercial insurance. Relatively speaking, the number of self-paying patients is very small because the price is too expensive.
However, any healthcare facility welcomes self-paying patients, and Mayo is no exception. The staff inside told me that their favorite is the local tyrants in the Middle East. If they just do a medical examination and bring their family with them, in many cases, they will cover the next floor (no problem, it must be arranged, and the Middle Eastern style can be customized).
Looking forward to more public financial reports from hospitals
Finally, since the cost of treatment is mainly paid for by insurance, which means that the hospital needs to wait for the payment cycle, let’s take a look at Mayo’s cash flow.
In my country, even at the department director level, each doctor has a bonus coefficient or even secondary distribution power, and may not care much about the overall cash flow of a hospital. This is probably because in the perception of most public hospital doctors, the overall operation of the hospital will definitely not owe wages (if a public hospital is in arrears, it will be fine), which is probably the chief accountant’s concern.
However, in the United States, hospitals are not owned by the government, but are self-financing, so hospital executives are concerned about having a healthy cash flow.
The so-called cash flow, Cash Flow, “flow” means flow, as the name implies, there are inflows and outflows. We can simply think that cash flow is like the blood flowing in the life cycle of an enterprise. When the cash flow cannot make ends meet, the enterprise cannot continue to operate.
In the United States, due to the highly developed social insurance, because the patient payment composition ratio (Payermix) will be different, medical institution managers need to monitor the proportion of insurance customers: commercial insurance customers, government insurance, self-pay client. The repayment cycle of commercial insurance is faster than that of government insurance, while self-paying patients pay directly after seeing the doctor (self-paying patients have the risk of bad debts on the other hand).
Imagine if all the hospitals are medical insurance patients, and the medical institution has paid all the costs of medical services (personnel salaries, equipment, consumables, drugs, etc.) in advance before the medical insurance pays the accounts payable. etc.), at this time, if the cash in the account is difficult to pay for this part of the expenditure, there will be arrears in the salary of personnel and suppliers, and over time, the cash flow will be broken.
A company can have no profit, but it cannot be without cash. No profit proves that the company is temporarily unable to do so, and its products have no market.market, but without cash, the business will go out of business.
In the past 5 years, more than 2 hospitals in New York have closed their doors and went bankrupt due to the excessive proportion of medical insurance patients and the breakdown of cash flow. And Mayo can still make a beautiful cash flow even though it accepts insurance reimbursement, which is really amazing.
In recent years, with the deepening of China’s medical reform, the liberation of the system and the enthusiasm of investors, many people are looking forward to the emergence of “China Mayo”.
Of course, this is bound to be a long gestation process. All the qualities, brands, concepts, cultures… can’t come out in a few decades.
As a non-profit organization, Mayo dares to disclose its financial report. Now Mayo has become the object of many hospitals’ yearning and tribute. Our learning is not only at the level of medical technology, but also at the level of hospital management.
I hope that domestic hospitals can also disclose their financial reports, so that they can be healthier. The road is difficult to walk, but if there are more people walking, it will become a clear road. (planned by: gyouza)
The author Zhou Lujing, former gastroenterologist of Huashan Hospital Jing’an Branch. Master of Healthcare Administration in the United States, currently studying in the executive program at the Wharton School of the University of Pennsylvania. Current Yuanhe Director of Operations.