Break-even

Break-even is the production number where the practice's costs are exactly covered and nothing is left over, not a loss, not a profit. It is calculated by dividing the fixed cost for the period by the contribution margin left after variable costs like supplies, lab and doctor compensation come out, and it is the number every other production target should be measured against.

Owners consistently guess this number too low, because the instinct is to divide fixed costs by 100% of production instead of by the real margin. If fixed costs are $2,600 a day and the effective margin after supplies, lab and doctor pay is 56%, break-even production is about $4,640 a day, not $2,600: a gap that surprises almost everyone who runs the math for the first time.

Once you know break-even, every hour after that number is hit is genuine profit, which is a far more useful way to run a schedule than watching a single collections total at the end of the month. It also reframes a PPO patient who barely clears break-even production for that hour: they are not unprofitable, but they are not building the practice either, and knowing the number is what makes that distinction visible.