Mayo Clinic poised for growthROCHESTER, Minn. – The Mayo Clinic has an AA credit rating and proven strength in attracting gifts as it prepares to invest billions of its own dollars in an ambitious expansion plan, with help from the state.
By: Associated Press, INFORUM
ROCHESTER, Minn. – The Mayo Clinic has an AA credit rating and proven strength in attracting gifts as it prepares to invest billions of its own dollars in an ambitious expansion plan, with help from the state.
So observers say Mayo looks like a very good bet to make good on its promise to kick in $3.5 billion over 20 years to fund the project, which is aimed at bolstering the medical center’s position as a world destination for health care.
Mayo received about $900 million in gifts and pledges from 2009 to 2011, Minnesota Public Radio reported Monday. And with an AA rating, Mayo’s bonds are deemed as safe as those issued by the federal government.
Still Mayo faces internal financial challenges. Some of its assets can’t be turned into cash quickly, and it has huge obligations to its employee pension plan. Other challenges include the impact of the new federal health care law, possible cuts in Medicare funding and a shortage of nurses.
Every health care provider faces similar challenges, said Steve Parente, director of the Medical Industry Leadership Institute at the University of Minnesota, but few are as well-positioned as Mayo to deal with them.
“To the extent that Mayo can document that it’s producing very high-quality results, patients will gravitate toward it, if they have the resources,” he said. “And more likely than not, the public insurance programs will continue to support it.”
Mayo is strong, despite its challenges, said Elizabeth Keating, a Boston University expert in the financial performance of nonprofits.
“I don’t doubt people will step forward and write large checks,” she said. “In a 20-year period, they should be able to successfully put together a package of financing and donations that’ll allow them to do this.”