Chartered Financial Analyst specializing in healthcare practice and service-based business finance.
Find how many adjustments your practice needs per month to be profitable. Enter any three variables—Monthly Fixed Costs, Avg. Price per Adjustment, Avg. Cost per Adjustment, or Breakeven Adjustments—to solve for the fourth.
Chiropractor Breakeven Calculator
Chiropractic Practice Breakeven Formula
The breakeven formula for a chiropractic practice finds the number of patient adjustments (Q) you must perform for your revenue to cover all monthly fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Price per Adjustment (P):
P = (F / Q) + V
Solve for Avg. Cost per Adjustment (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., office rent, utilities, staff salaries, malpractice insurance, EHR software fees).
- Avg. Price per Adjustment (P): The average revenue you collect for a single patient adjustment (after insurance write-offs).
- Avg. Cost per Adjustment (V): The average cost directly tied to one adjustment (e.g., billing service fees, medical supplies, payment processing fees).
- Breakeven Adjustments (Q): The total number of adjustments you need to perform each month to reach $0 in profit.
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What is a Chiropractor’s Breakeven Point?
A **Chiropractor’s Breakeven Point** is the exact number of patient adjustments (Q) you must provide each month to cover all your practice’s costs. It’s the minimum patient volume needed to stop losing money and start earning a profit. Understanding this number is critical for managing staff, setting prices, and making decisions about insurance newtworks.
**Fixed Costs (F)** are your consistent monthly expenses, whether you see 10 patients or 500. This includes your office rent, malpractice insurance, staff salaries (for receptionists, etc.), utilities, and monthly fees for your EHR/billing software.
**Variable Costs (V)** are costs that occur *only* when you see a patient. This can include disposable supplies (e.g., face paper), billing service fees (if they charge per-claim), and credit card processing fees. If you pay associate chiropractors a percentage of the service, their pay is also a variable cost.
The **Contribution Margin** (P – V) is the profit from a single adjustment that goes toward paying your fixed costs. If your average collection per adjustment is $65 (P) and your variable costs are $5 (V), your contribution margin is $60. This calculator finds how many $60 “profit chunks” you need to cover your total fixed costs.
How to Calculate Chiropractor Breakeven (Example)
Let’s calculate the breakeven point for a small chiropractic office.
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Identify Monthly Fixed Costs (F):
Your office rent is $3,000, staff salary is $3,500, insurance is $1,000, and software/utilities are $500. Your (F) is $8,000.
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Identify Avg. Price per Adjustment (P):
After insurance adjustments and write-offs, your average collection for a standard adjustment is $65.
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Identify Avg. Cost per Adjustment (V):
You use a billing service that charges 5% of collections (`0.05 * $65 = $3.25`). Supplies and processing fees add $1.75. Your (V) is $5.00.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per adjustment: $65 (P) – $5 (V) = $60.
Next, divide the fixed costs by this margin:
Q = $8,000 / $60 = 133.33 -
Conclusion:
You must perform 134 adjustments each month (rounding up) to cover all your practice’s costs. Every adjustment after the 134th generates profit.
Frequently Asked Questions (FAQ)
You must use your *collected revenue*, not your billed amount. Look at your total collections from adjustments last month and divide by the total number of adjustments performed. This gives you your true average (P) after write-offs.
It depends. If you pay the associate a flat salary, their pay is a **Fixed Cost (F)**. If you pay them a percentage of the services they perform (e.g., 40% of collections), their pay is a **Variable Cost (V)**.
This calculator is simplest if you find an “average” patient visit. If you want to be more precise, you should calculate a weighted average (P) and (V) based on the mix of services you perform.
Take the monthly lease payment for the new equipment (e.g., a $400/mo X-ray machine) and add it to your (F). If your (F) goes from $8,000 to $8,400, your new breakeven point becomes `$8,400 / $60 = 140` adjustments. You must decide if you can perform those extra 6 adjustments per month.