Chartered Financial Analyst specializing in healthcare practice and service-based business finance.
Find how many sessions your physiotherapy practice needs per month to be profitable. Enter any three variables—Monthly Fixed Costs, Avg. Price per Session, Avg. Cost per Session, or Breakeven Sessions—to solve for the fourth.
Physiotherapy Breakeven Calculator
Physiotherapy Practice Breakeven Formula
The breakeven formula for a physiotherapy practice finds the number of patient sessions (Q) you must conduct 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 Session (P):
P = (F / Q) + V
Solve for Avg. Cost per Session (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., clinic rent, utilities, staff salaries, malpractice insurance, equipment leases, EMR software).
- Avg. Price per Session (P): The average revenue you *collect* (not bill) for a single patient session.
- Avg. Cost per Session (V): The average cost directly tied to one session (e.g., therapy bands, tape, billing fees, processing fees, laundry).
- Breakeven Sessions (Q): The total number of sessions you need to conduct each month to reach $0 in profit.
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What is a Physiotherapy Practice’s Breakeven Point?
A **Physiotherapy Practice’s Breakeven Point** is the exact number of patient sessions (Q) you must bill for each month to cover all of your practice’s costs. It is the minimum patient volume required to stop losing money and begin earning a profit. Knowing this number is essential for managing staffing, setting session prices, and deciding which insurance networks to join.
**Fixed Costs (F)** are your consistent monthly expenses that do not change with patient volume. This includes your clinic rent or mortgage, salaries for administrative staff, malpractice insurance, equipment lease payments, and utilities.
**Variable Costs (V)** are costs that occur *only* when you conduct a patient session. This includes disposable supplies (therapy bands, kinesiology tape, massage lotion), laundry services, medical billing fees (if charged per-claim), and credit card processing fees.
The **Contribution Margin** (P – V) is the profit from a single session that goes toward paying your fixed costs. If your average collection per session is $100 (P) and your variable costs are $10 (V), your contribution margin is $90. This calculator determines how many $90 “profit chunks” you need to cover your total fixed costs.
How to Calculate Physiotherapy Breakeven (Example)
Let’s calculate the breakeven point for a physiotherapy clinic.
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Identify Monthly Fixed Costs (F):
Your clinic rent is $5,000, staff salaries (reception, billing) are $6,000, insurance is $1,000, and equipment/utilities total $2,000. Your (F) is $14,000.
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Identify Avg. Price per Session (P):
After all insurance adjustments and co-pays, your average *collection* for a patient session is $100.
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Identify Avg. Cost per Session (V):
Your disposable supplies, laundry, and billing fees average $10 per session.
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per session: $100 (P) – $10 (V) = $90.
Next, divide the fixed costs by this margin:
Q = $14,000 / $90 = 155.55 -
Conclusion:
You must conduct 156 sessions (rounding up) each month to cover all your practice’s costs. Every session after the 156th generates profit.
Frequently Asked Questions (FAQ)
You must use your *actual collections*, not your billed charges. Divide your total monthly collections from sessions by the total number of sessions performed. This gives you your true average (P) after insurance write-offs.
It depends on their compensation. If you pay the therapist a flat salary, their pay is a **Fixed Cost (F)**. If you pay them per-session or a percentage of the revenue they generate, their pay is a **Variable Cost (V)**.
To be most accurate, you should calculate a weighted average for (P) and (V). However, for a quick analysis, using an average of all sessions (dividing total collections by total sessions) is a very effective starting point.
Add the new staff member’s monthly salary (e.g., $4,500) to your (F). If your (F) goes from $14,000 to $18,500, your new breakeven point becomes `$18,500 / $90 = 206` sessions. You must determine if your practice can support that increase in patient volume.