Mayo Clinic Financial Management: Strategy and Ethics

Introduction to Financial Management in Healthcare

A major part and linchpin of any medical and/or research firm is the financial management of the organization. Financial management of any major medical outfit is overseen by the officers of the treasury and finance departments, who, by extension, also direct the financial activities of the clinic. These activities include bookkeeping, investing, and developing projects. The depth and breadth of these operations touches upon a number of important areas, such as methods of funding, research initiatives, quality control, ethics, accreditation, awards, regulation, marketing, strategic management, branding, and involvement with employees and the community.

All of the above applies to the organization focused on in this report: the Mayo Clinic. While all businesses and organizations must attend to financial matters in some form, the complexity and intricacy of the Mayo Clinic's financial operations is staggering and vast.

Funding Sources and Revenue Structure

The Mayo Clinic is a non-profit organization, so a significant portion of its support comes from donations. The revenue it collects through services—currently more than $10 billion, with income generated through services at $526 million and contributions from benefactors at $277 million—goes to fund its development and expansion projects, including research, education, and clinical studies (Mayo Clinic Facts, 2015). The Mayo Clinic provides financial assistance for patients who meet federal poverty guidelines, and it also accepts Medicare and Medicaid, which are federally funded programs for low-income families.

Moreover, the Clinic actively advocates for these federally funded programs to cover telemedicine—an advanced eHealth services technology that allows patients to communicate with healthcare providers via digital technology, alleviating much of the strain on nurses who are otherwise stretched thin. Telemedicine is an innovative method of patient care that the Clinic embraces, setting it further apart from standard healthcare providers across the nation that have yet to adopt eHealth services (Hiers, 2015).

The main method of funding for the Clinic is therefore through services provided, as revenue is reinvested into the Clinic and its locations to serve the needs of the community and the broader global public. It also receives charitable donations, which are tax-deductible and generate additional cash flow in the form of income revenues.

Research, Accreditation, and Awards

The research areas the Clinic is currently committed to include topics in neurology—for which it is best known—but the Clinic's scope extends from advanced liver disease to Alzheimer's disease to zebrafish genetics. It is not limited in terms of scope and actively encourages its researchers to push the envelope in making new progress across various areas of medicine (Laboratories, 2015).

The Mayo Clinic Health System is accredited by The Joint Commission, a national accreditation organization for hospitals. Every three years, onsite reviews are conducted by the Commission to ensure that the Clinic remains compliant with criteria established by the Commission (Accreditation, 2015).

Awards received by the Mayo Clinic range from institutional to individual recognition. The Clinic has been recognized as a Diversity Inc. top hospital, a top hospital for Hispanics in 2013, and individual awards have been given to surgeons and physicians by the American Academy of Orthopedic Surgeons and the Rochester Heritage Preservation Committee (Awards, 2015). Its marketing and branding strategies are evident in its websites and its commitment to cultivating an image as a leader in excellent service, information, and care within the medical community.

Conclusion

In the end, the Mayo Clinic is clearly a model that the rest of the healthcare sector—both in the United States and around the world—would be wise to follow. However, the for-profit nature of much of healthcare and the absence of a universal healthcare system in the United States will inevitably prove to be obstacles to that goal. Even so, there are many steps that can and should be taken to improve access to care, the quality of care delivered, and the removal of cost as a barrier to both preventative and emergency treatment.

Perhaps there will come a day when a health crisis does not bankrupt a patient and healthcare is reasonably priced and universally accessible. In the meantime, organizations like the Mayo Clinic will continue to strive toward that goal through strategic, ethics-based, and evidence-based practice.

References

Haughorn, J. (2014). Knowledge management in healthcare: It's more important than you realize. Health Catalyst. Retrieved 26 July 2016, from

HIMSS. (2014). Infor maximizing the value of human capital in healthcare. HIMSS. Retrieved 26 July 2016, from http://www.himss.org/infor-maximizing-value-human-capital-healthcare?ItemNumber=34438

Mayo. (2016). Regulatory support — Center for Clinical and Translational Science (CCaTS) — Mayo Clinic. Mayo.edu. Retrieved 26 July 2016, from http://www.mayo.edu/ctsa/resources/consultative-resources/regulatory-support

Weiner, S. (2001). I can't afford that! Journal of General Internal Medicine, 16(6), 412–418. http://dx.doi.org/10.1046/j.1525-1497.2001.016006412.x