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Mayo Clinic CEO Dr. John Noseworthy, left. Photo: Evan Vucci/AP

Mayo Clinic CEO Dr. John Noseworthy ignited a firestorm this week after the Minneapolis Star Tribune reported that Noseworthy said the esteemed academic medical center would prioritize patients who have private health insurance over those who have Medicare and Medicaid for non-emergency procedures.

It was a damning statement — actively preferring people with better-paying coverage over the old and poor — but it reflected the unspoken policy of the hospital industry. Noseworthy also said this policy needed to happen so his not-for-profit organization "can be financially strong at the end of the year to continue to advance ... our mission."

We combed through eight years of the health system's financial documents to see if it was in peril. The gist: Mayo Clinic's finances are well above average.

Expand chart
Data: Mayo Clinic financial documents; Chart: Andrew Witherspoon/Axios

The numbers: Mayo Clinic's revenue has grown by more than 6% annually on average since 2009, reaching $11 billion in 2016 (making Mayo Clinic bigger than national companies like Hertz and Biogen). And more importantly, it is making a lot of money from its daily activities.

The changes Obamacare made to the health care system caused some fluctuation over the past eight years, but Mayo Clinic never had an operating margin below 4%. The margin was 8.5% in 2014, the first year of Obamacare's exchanges and Medicaid expansion.

Mayo's numbers are above the norm: The median operating margin for not-for-profit hospitals in 2015 was 3.4% and was lower in past years, according to Moody's Investors Service.

Patients with government insurance, especially Medicare, don't doom all hospitals. As health economist Austin Frakt has pointed out repeatedly, hospitals that lose money on Medicare often have dominant market power (like Mayo), charge higher private prices that are well above the fixed public rates, and are inefficient.

Mayo Clinic did not respond to questions about its financial documents and instead sent a statement that touted its uncompensated care. It also said commercially insured patients are needed to fund education and research for the future: "Balancing payer mix is complex and isn't unique to Mayo Clinic. It affects much of the industry, but it's often not talked about. That's why we feel it is important to talk transparently about these complex issues with our staff."

Go deeper

House passes bill making Juneteenth a federal holiday

Juneteenth march on June 19, 2020 in the Brooklyn borough of New York City. Photo by Robert Nickelsberg/Getty Images)

The House voted 415-14 on Wednesday to make Juneteenth a federal holiday.

The big picture: All those voting against the measure were Republicans. The vote comes one day after the Senate unanimously approved the bill and three days before the holiday.

3 hours ago - Politics & Policy

Group of 20 bipartisan senators back $1.2T infrastructure framework

U.S. Senate Majority Leader Chuck Schumer (D-NY) arrives for a meeting with Senate Budget Committee Democrats in the Mansfield Room at the U.S. Capitol building on June 16, 2021 in Washington, DC. The Majority Leader and Democrats on the Senate Budget Committee are meeting to discuss how to move forward with the Biden Administrations budget proposal. Photo: Samuel Corum / Getty Images

A group of 10 Democratic and 10 Republican senators (the "G20") tasked with negotiating an infrastructure deal with the White House has released a statement in support of a $1.2 trillion framework.

Why it matters: Details regarding the plan have not yet been released, but getting 10 Republicans on board means the bill could get the necessary 60 votes to pass.

DOJ drops criminal probe, civil lawsuit against John Bolton over Trump book

Photo: Jabin Botsford/The Washington Post via Getty Images)

The Justice Department has closed its criminal investigation into whether President Trump's former national security adviser John Bolton disclosed classified information with his tell-all memoir, “The Room Where it Happened," according to a source with direct knowledge.

Why it matters: The move comes a year after the Trump administration tried to silence Bolton by suing him in federal court, claiming he breached his contract by failing to complete a pre-publication review for classified information. Prosecutors indicated they had reached a settlement with Bolton to drop the lawsuit in a filing on Wednesday.