Chartered Financial Analyst specializing in healthcare practice and dental industry finance.
Find how many procedures your dental practice needs per month to be profitable. Enter any three variables—Monthly Fixed Costs, Avg. Price per Procedure, Avg. Cost per Procedure, or Breakeven Procedures—to solve for the fourth.
Dental Practice Breakeven Calculator
Dental Practice Breakeven Formula
The breakeven formula for a dental practice finds the number of patient procedures (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 Procedure (P):
P = (F / Q) + V
Solve for Avg. Cost per Procedure (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, equipment leases).
- Avg. Price per Procedure (P): The average revenue you *collect* (not bill) for a single procedure.
- Avg. Cost per Procedure (V): The average cost directly tied to one procedure (e.g., lab fees, dental supplies, processing fees).
- Breakeven Procedures (Q): The total number of procedures you need to perform each month to reach $0 in profit.
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What is a Dental Practice’s Breakeven Point?
A **Dental Practice’s Breakeven Point** is the exact number of procedures (Q) you must perform each month to cover all of your practice’s costs. It’s the minimum level of patient volume needed to stop losing money and start being profitable. This number is crucial for managing overhead, setting fees, and analyzing insurance plan reimbursements.
**Fixed Costs (F)** are your consistent monthly expenses, regardless of patient volume. This includes your office rent/mortgage, staff salaries (receptionist, office manager), equipment leases, malpractice insurance, and utilities.
**Variable Costs (V)** are costs that occur *only* when you perform a procedure. This includes dental lab fees (for crowns, bridges, etc.), disposable supplies (gloves, masks, gauze), and credit card processing fees. If you pay associate dentists a percentage of production, their compensation is also a variable cost.
The **Contribution Margin** (P – V) is the profit from a single procedure that goes toward paying your fixed costs. If your average collection per procedure is $250 (P) and your average lab/supply cost is $40 (V), your contribution margin is $210. This calculator finds how many $210 “profit chunks” you need to cover your total fixed costs.
How to Calculate Dental Practice Breakeven (Example)
Let’s calculate the breakeven point for a single-dentist practice.
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Identify Monthly Fixed Costs (F):
Your office rent is $6,000, staff salaries are $12,000, insurance is $2,000, and equipment leases/utilities are $5,000. Your (F) is $25,000.
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Identify Avg. Price per Procedure (P):
You perform a wide mix of services. Last month, your total *collections* (not production) were $50,000 from 200 procedures. Your (P) is `$50,000 / 200 = $250`.
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Identify Avg. Cost per Procedure (V):
Your total lab fees were $5,000 and supplies were $3,000 for those 200 procedures. Your (V) is `($5,000 + $3,000) / 200 = $40`.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per procedure: $250 (P) – $40 (V) = $210.
Next, divide the fixed costs by this margin:
Q = $25,000 / $210 = 119.05 -
Conclusion:
You must perform 120 procedures (rounding up) each month, at this average price and cost, to cover all your practice’s costs.
Frequently Asked Questions (FAQ)
You must use your *actual collections*, not your UCR (Usual, Customary, and Reasonable) fees. The easiest way is to divide your total monthly collections (from procedures, not hygiene) by the number of procedures performed.
It depends. If you pay the associate a flat daily rate or salary, their pay is a **Fixed Cost (F)**. If you pay them a percentage of production or collections (e.g., 30% of collections), their pay is a **Variable Cost (V)**.
A hygienist is often treated as a separate “mini-business.” You can use this calculator for them, too. (F) = their wage, (P) = avg. price per patient, (V) = supplies, (Q) = patients. A profitable practice needs a profitable hygiene department.
Look at the plan’s fee schedule. If it cuts your (P) from $250 to $200, your new contribution margin is `$200 – $40 = $160`. Your new breakeven point becomes `$25,000 / $160 = 157` procedures. You must decide if you can handle 37 extra procedures per month for the same profit.