Free tool
What is this PPO actually costing you?
Most owners judge a plan by how many patients it sends. That is the wrong end of the telescope. Put in three numbers and find out how many of those patients you could afford to lose before dropping it stops making sense.
One plan, run the numbers
Starts with example numbers · nothing is sent anywhereWhat you actually bank from these patients after the contracted discount. Your practice software has it: run a collections-by-carrier (or production-by-insurance) report for the last twelve months.
How far this plan's fee schedule sits below your full (UCR) fee. Compare its allowed amount on your ten most common codes to what you charge a cash patient.
Be honest. In my experience the team's guess is almost always too high; most practices that communicate well keep the large majority.
The number that matters
You could lose up to 35% of these patients and finish exactly even. You are assuming 25%, so dropping this plan puts you ahead, and every chair hour the leavers free up is upside on top of that.
Break-even patient loss always equals the write-off percentage; that is arithmetic, not opinion. The model assumes the patients who stay pay your full fee and gives no credit for the chair time the leavers free up, so it errs toward keeping the plan.
How to read it
Three numbers, one decision.
The figure people fixate on is the write-off: the money the plan takes off your fee before you ever see it. It is worth knowing, and it is usually bigger than owners expect once it is annualized. But on its own it does not tell you whether to drop the plan, because dropping it costs you patients.
The useful number is the one underneath: break-even patient loss. It is identical to the write-off percentage, every time, for arithmetic reasons rather than clinical ones. A plan discounting you 40% can lose you 40% of its patients before you are worse off. A plan discounting you 12% can only lose you 12%.
That reframes the whole conversation. Instead of arguing about whether patients will leave, you are asking a question the team can actually answer: will we lose more than that?
Questions
Before you act on it.
Where does the break-even number come from?
If a plan writes off 35% of your fee, the collections you keep are 65% of full value. Drop the plan and the patients who stay now pay full fee, so you only need 65% of them to match what you were collecting. That means you can lose 35%, exactly the write-off percentage, and finish level.
What counts as the write-off percentage?
The gap between your full fee and the plan's contracted fee, across the procedures you actually do for those patients. Take it from a recent EOB batch rather than from memory: most owners are off by several points.
Is patient loss really that low?
It varies by market and by how you handle the transition, but the estimate a team gives in the meeting beforehand is usually the most pessimistic number in the room. This tool exists so you can test the pessimistic number instead of arguing about it.
What is this missing?
Plenty, deliberately. It ignores the chair time freed up, the collections cost of chasing plan payments, and any new-patient flow the plan genuinely drives. It answers one question cleanly rather than every question vaguely.
PPO strategy is one module of six in the course.
Related reading
- Going Out of Network: The 90-Day Plan, the Patient Letter and the Front-Desk Scripts9 min
- How to Build an In-House Membership Plan That Replaces the Insurance Conversation8 min
- How Dentists Actually Finance a Practice Purchase8 min
- How to Ask a PPO for a Fee Increase (and What to Do When They Say No)8 min