Bob Herman Mar 17, 2017
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Mayo Clinic isn't hurting financially

Mayo Clinic CEO Dr. John Noseworthy, left (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."

So, we decided to comb 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.

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."

Khorri Atkinson 8 hours ago
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China slaps reciprocal tariffs on U.S. imports

China's President Xi Jinping speaks next to President Trump. Photo: Nicolas Asfouri// AFP / Getty Images

China announced plans to impose reciprocal tariffs on $3 billion of imports from the U.S., hours after President Trump ordered levies on a range of Chinese goods.

The details: China's plan includes a 25% tariff on U.S. pork imports as well as 15% tariffs on American steel pipes, fruit and wine, according to Bloomberg.

Haley Britzky 8 hours ago
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Former Playmate alleges Trump tried to pay her after sex

President Donald Trump and Vice President Mike Pence walk into the Diplomat Room.
President Donald Trump and Vice President Mike Pence walk into the Diplomat Room. Photo: Mark Wilson / Getty Images

Former Playboy model Karen McDougal detailed her relationship with President Trump — which he has denied — in an interview with CNN's Anderson Cooper on Thursday night, including the first time she met Melania and how he tried to pay her after the first time they had sex.

The details: The alleged affair took place while he was married to Melania and shortly after his youngest son was born. McDougal said they met while the Apprentice was filming at the Playboy mansion, and began seeing each other "quite frequently." She told Cooper that Trump told her he loved her "all the time," and that there "was a real relationship there."