Dropping a Dental PPO

PPO networks bring patients through the door, but they often pay well below your full fees. Leaving a network removes those write-offs, but some patients will leave too. This calculator compares the profit from a PPO's patients today with what you'd expect after going out of network, and shows how many patients you need to keep to break even.

What this calculator does

Enter your yearly collections from the PPO's patients, PPO fees as a percentage of your full fees, the share of patients you expect to keep, your out-of-network collection rate, your variable costs and how much freed-up time you can fill with new patients. It shows:

• the change in yearly profit,
• profit from these patients now,
• profit after leaving the PPO,
• the retention needed to break even, and
• the write-offs you'd stop taking.

The formula in plain English

Full-fee production = PPO collections ÷ PPO fee percentage. This is the same dentistry valued at your normal fees.

Profit now = PPO collections − (full-fee production × variable cost %).

Kept production = full-fee production × (retention + lost patients × share of time refilled).

Profit after = kept production × (out-of-network collection rate − variable cost %).

Change = profit after − profit now.

Break-even retention = profit now ÷ (full-fee production × (collection rate − variable %)).

Variable costs like supplies, lab and hourly staff time follow the amount of dentistry, not the fee.

A worked example

Dr. Price collects $400,000 a year from one PPO's patients. That plan pays 65% of his full fees. He expects to keep 70% of those patients, collect 95% out of network, and his variable costs are 30% of full-fee production.

• Full-fee production: about $615,400.
• Write-offs he'd stop taking: about $215,400.
• Profit now: about $215,400.
• Profit after: about $280,000.
• Change: about $64,600 more profit a year.
• Break-even retention: about 54%.

Even if a third of the patients leave, his profit goes up, and he has more time for each patient. If he expected to keep only half, he'd lose money, so it's important to have a realistic idea of patient loyalty first.

Why it matters at each career stage

If you're: Practice owner

Start with your lowest-paying PPO. Look at how many patients you'd lose and whether your schedule is busy enough to fill their time. Tell patients well ahead of time, explain how out-of-network benefits work, and offer an in-house plan as an alternative.

If you're: Employed

If you're considering buying a PPO-heavy practice, this shows the upside of reducing PPO dependence over time. But plan to do it gradually after the transition, not right away.

Before you drop a plan

Know your numbers by plan. Your practice software can show collections and write-offs for each PPO.

Check your schedule. A busy practice with a waiting list is in a much better position than one with open time.

Communicate early and clearly. Send letters, train your team on what to say, and help patients understand their out-of-network benefits.

Offer alternatives. A membership plan or payment options keep some patients who would otherwise leave.

Watch the results. Track patient retention and collections monthly for the first year.

The hidden benefit: time

Fewer patients at full fees often means more time per patient, less rushing and less stress for the team. If you can fill some of that time with new fee-for-service patients, enter that in the refill field and watch the result improve.

Next, model a replacement with the membership plan revenue calculator, check what new patients are worth, and keep an eye on billing with the collections and A/R calculator.