ROCHESTER — Mayo Clinic leaders on Thursday announced that the organization finished 2010 in a strong financial position. Managing expenses remains critical as Mayo Clinic makes measured investments in capital projects and programs that will allow the organization to continue to provide an unparalleled patient experience and remain a trusted partner in health care according to a news release.

In 2010, Mayo’s income from current activities (net operating income) was $515 million, which translates to a 6.5 percent operating margin and aligns with the clinic’s long-term objectives. Because Mayo Clinic is a not-for-profit organization, all income is reinvested into Mayo Clinic patient care, education and research programs. Mayo sets its long-term operating margin objectives based on a determination of what is necessary to reinvest in these programs.

“While the national and global economy is recovering slowly from the 2008 financial crisis, Mayo Clinic employees have done a remarkable job achieving a rapid recovery and positioning the organization well for the future,” said John Noseworthy, M.D., president and chief executive officer of Mayo Clinic. “Our staff’s extraordinary response to tough times allowed us to recover in 2009 and to flourish in 2010.”

Shirley Weis, the clinic’s chief administrative officer, noted that Mayo Clinic improved on its solid 2009 financial performance in 2010 by continuing to focus on expense management, controlled growth in staffing and practice redesign (for example, eliminating waste and overutilization). Mayo Clinic achieved its 2010 operating margin primarily by holding expenses to a 2.5 percent increase while growing revenue by 4.7 percent over the same period.

“These efforts have significantly improved operational effectiveness,” Weis said. “Mayo Clinic employees across the enterprise continue to focus on quality while identifying and eliminating work that duplicates effort or that doesn’t add value for our patients.”

Mayo Clinic leaders are pleased that Mayo Clinic ended 2010 in a strong financial position. However, they recognize that the road ahead is uncertain, with slow economic recovery and variables surrounding health care reform.

“We know that we need to continue to manage expenses, even as we make necessary investment in capital projects and programs that are essential to providing the best care for our patients,” Noseworthy said. “After two years of constrained capital spending, Mayo Clinic will begin to make necessary investments to ensure that we continue to deliver an unparalleled patient experience.”

Capital projects supporting integration and expansion

The Mayo Clinic Board of Trustees recently approved building projects designed to improve quality, safety and service to patients. The projects will include an expansion and renovation to the Emergency Department at Saint Marys Hospital, and construction projects in the Mary Brigh East Building at Saint Marys Hospital and at two Mayo Clinic Health System sites. The trustees also approved an additional $5.2 million for the Clinical Image Viewing Convergence Program, a critical part of the continuing integration of Mayo Clinic’s multisite radiology practice. The total cost of the project is $23.2 million.

Saint Marys Hospital on Mayo’s Rochester campus will expand the Emergency Department by 10,400 square feet. The additional space will allow for changes to improve efficiency and will provide additional capacity for monitoring and treating patients. The expansion and renovation will offer space for general radiology services in the Emergency Department, trauma resuscitation rooms and a new ambulance garage. The cost of the renovation and expansion is $25.8 million.

The Mary Brigh East expansion project will provide an additional 118,000 square feet for preoperative and postoperative patient care activities for surgical patients, provide mechanical space for surgery infrastructure support and will accommodate for future growth. The cost of the expansion project is $33 million.

Mayo is also continuing its investments in Mayo Clinic Health System:

• $28 million for improvements to Austin Medical Center to make it easier for patients of the community to receive care close to home. The project will include an 85,600-square-foot building added to the north side of the medical center.

• $6.9 million to expand Luther Midelfort Northland’s Emergency Department. A new 18,000-square-foot Emergency Services building will be built at its Barron, Wis., campus to accommodate growing demand for emergency services in the area. This expansion will help decrease patient waiting times, improve privacy and allow staff to care more effectively for patients who need emergency care.