Mayo Clinic earned $1.5 billion profit in 2025, but is still below average in charity care

Mayo Clinic, Minnesota’s largest employer, had another strong year of revenue growth last year, pulling in $21.5 billion, but the nonprofit hospital continues to spend a smaller portion of its income on charity care compared to its peers.

According to Mayo Clinic’s  annual financial report, the hospital had expenses of about $20 billion, leaving it with $1.5 billion in net income in 2025.

Allan Baumgarten, an independent health care finance analyst in the Twin Cities, says the strong financial results are the result of the medical care giant’s continued growth.

“I think their net income from operations is somewhere around 13 percent higher than it was in 2024, and 2024 was considered a record breaking year for the Mayo Clinic,” Baumgarten said.

Mayo Clinic credits its efforts to expand research, leverage more digital technologies like AI, and said it continues to expand access to excellent patient care, all of which is contributing to its success.

Patients continue to come to Mayo from all over the world. The hospital – consistently rated the best in the country – performed the most organ transplants in the nation last year. And Mayo is growing to meet patient needs, adding 12,400 new employees, bringing its total number of workers to nearly 85,000, an increase of about 20 percent.

More than 50,000 of Mayo’s employees are here in Minnesota.

Baumgarten says Mayo Clinic’s growth strategy appears to be working well and their financial outlook is strong.

“In a sense, the proof is in the pudding,” Baumgarten said. “Patients continue to return, doctors continue to make referrals there, and their financial performance keeps improving year after year.”

But some Minnesotans might have a hard time reconciling the health care giant’s $1.5 billion profit in 2025, with its decision to close six rural clinics in the same year. Baumgarten explained that Mayo seems to be shifting its patient care model.

While it’s made recent investments in regional hubs such as Mankato and La Crosse, Wis, it’s consolidating smaller clinics that it had acquired across the Upper Midwest. Now, instead of focusing on providing some basic care at rural clinics closer to where relatively few patients live, Baumgarten said Mayo seems to be making its main campuses more of a destination, similar to its model at its Arizona and Florida campuses.

“[Mayo Clinic is] saying, ‘Come to our one central facility in Rochester or Scottsdale or Jacksonville, and here you will find on a single campus all the specialty care and all the technology and all the labs and other kinds of services that you need to have comprehensive care provided to you as a patient’,” Baumgarten said.

Baumgarten said it appears that this consolidation contributed to Mayo’s growth in profits last year, as 2025 follows a years-long pattern of the hospital making more than a billion dollars in net income.

So what happens with this extra money?

Gerard Anderson is a health economist and professor at Johns Hopkins University. He says Mayo and other big medical centers always aim to build up a big surplus at the end of the year to invest in new equipment, facility acquisitions and to feed its endowment.

“I don't know what the Mayo Clinic endowment is, but some of the big academic medical centers have five to $10 billion stashed away in endowment,” Anderson said.

Anderson said he isn’t surprised by Mayo’s net income given its revenue, but he says there’s no getting around the fact that its 2025 expenditures of $20 billion in a year is staggering.

“It's amazing how much these big academic medical centers spend in any given year,” Anderson said. “It's just, you know, an outrageous amount of money, but the Mayo Clinic is not an outlier.”

Where Mayo Clinic is an outlier is in charity care spending, Anderson says.

Nonprofit hospitals are required to subsidize care for eligible low-income patients in return for their tax exempt status. This is known as charity care or financial assistance.

Anderson says hospitals across the country typically spend about four percent of their revenue on charity care. Some states like Texas and Washington have even set minimum thresholds of charity care that hospitals must meet. Anderson said the legal threshold varies across states, but it’s typically between two percent and three percent of the health care systems’ revenues.

Last year, Mayo spent $157 million providing charity care, just 0.7 percent of its revenue, a level that Anderson called “unacceptably low,” if Minnesota had a law requiring it to provide a minimum amount of charity care.

Mayo Clinic’s charity care has increased significantly in recent years, and it’s now triple what it was in 2021. Mayo didn’t respond to MPR News’s questions about its charity care numbers in time for publication, but in a statement to the Rochester Post Bulletin the hospital said:

"The rise in charity care is in part due to Mayo Clinic’s expansion of our presumptive eligibility policy, which identifies patients who may qualify for charity care and eliminates the need for a formal application. This reflects Mayo Clinic's unwavering commitment to provide access to care for those who need it."

While the increase in charity care is significant, Anderson said there’s certainly room for Mayo Clinic to do more. 

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