Internal Mayo Clinic memo on financials
Here's the full internal Mayo Clinic memo on the financials of the first 4 months of 2009 that I was looking for on Friday. I have a full story on this in the weekend edition.
Dear Colleagues, We’re writing to provide an update on Mayo Clinic’s performance through the first four months of 2009 and report on the progress we’re making in our long-term goal of transforming Mayo Clinic for the future. Our collective efforts to transform our practices, manage expenses, and improve our revenues are beginning to bear fruit. This is due to your commitment and willingness to address our challenges head-on. But we’ve only run the first mile of our transformation marathon. We must take advantage of our momentum. There is no doubt that we will face significant financial pressures throughout 2009 and into the future. Nothing less than our mission is at stake. We are working to ensure that Mayo Clinic stands ready to meet the needs of everyone who turns to us for answers and looks to us for hope. Creating value All of our activities are designed to create value: the best quality, safety and service outcomes at the lowest cost over time. Together we are redesigning our care models and business processes to improve outcomes and reduce costs -- to improve value to our patients. Here are just a few examples: * Patient Access/Payer Mix project in Rochester: This project is designed to balance appointments among Medicare, employee and privately insured patients, which provide different rates of reimbursement for care. The project is focused on improving access for patients in Endocrinology, Gastroenterology, Pulmonary Medicine, General Internal Medicine, Neurology, Orthopedics, ENT and Urology. * Expense Management and Revenue Enhancement project in Arizona: Plans are targeted at increasing appointment conversions to commercial/contracted patients, seeing all referred patients -- Medicare and commercial/contract -- (with limited exceptions), seeing all self-referred commercial/contract patients (with limited exceptions), and increasing awareness of Mayo Clinic among Arizona’s patient base. * Lean Project Initiatives in Florida: In April, our Florida campus kicked off a wave of lean projects designed to help continue removing waste from the practice. Initial areas of focus include reducing the costs of care for procedures and patient groups, as well as patient flow processes in a clinic-based practice and in the operating rooms. * Mayo Post Acute Care program in Mayo Health System (MHS): This program expands and develops high-quality, post-acute care pathways between MHS entities, critical access hospitals, acute care settings, skilled nursing facilities, and home care in response to patient needs of MHS and Mayo Clinic. The results show significant benefits to patients and our staff both from clinical outcomes and satisfaction perspectives. * Quality Management Systems in Research: This initiative is well under way implementing new business processes designed to improve service, eliminate waste, ensure compliance, increase revenue, reduce costs and improve overall value to advance the research strategic priorities in all locations. Significant progress has already been made as Mayo Clinic creates a new comprehensive research management system. * Health policy discussions: We continue to work at a national level to build consensus for needed reform that will be based on the value of care provided and that will keep the patient’s interest at heart. You can read about additional efforts, learn how to share your success stories, and find the latest financial reports from all of our campuses on our Creating Value intranet site. Financial performance We had a strong financial performance in April. All operating units were either on plan or favorable to plan for the month. This has moved our year-to-date performance ahead of plan. Income from operating activities (including practice, research, education, diversification and fund-raising activities) through the end of April is $28 million favorable to plan. It’s important to emphasize that our improved performance has been largely due to our expense management efforts. We must continue to have strong performance in both expense management and revenue generation to remain on plan for the year. Expense management alone will not sustain our practice model for the long term. Investment performance improved in April, with a return of 3 percent for the month. However, we are still recovering from investment losses in January and February and the year-to-date return is -3 percent. Fund-raising for the endowment year-to-date is about $1 million below plan. What you can do Our efforts to manage expenses and to transform our practices are investments in creating a stronger and more dynamic Mayo Clinic that will be able to adapt and meet the changing needs of our patients. We cannot lose sight of the reason we do this work -- to preserve the ability of people who are the best in the world at what they do to provide the best care for our patients. Thank you for taking up this challenge and for the important work you do every day to serve our patients and each other. Your constant commitment to our patients’ needs gives them the reassurance that they remain in good hands and that Mayo Clinic will be here for them in the future. Denis Cortese, M.D. President and CEO Mayo Clinic Shirley Weis Chief Administrative Officer Mayo Clinic
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