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Q: I am having a problem with determining which figures to use for a Break-Even Analysis in a non-profit organization. Fixed and Variable costs are not a problem. We need to figure out whether we should provide equipment services, or continue contracting the service out, and where the break-even point is. All of our costs are calculated on a per-patient-day basis. We bill only one amount to insurance or Medicare which is a per-patient-day figure. This covers all services, drugs, nursing, physicians, etc. Does anyone have any idea how to solve this problem?

A: Try calculating the break-even point for the service when you deliver it, to do this you will need to determine/apportion the component of your fee that relates to this service and apply the variable and fixed costs. If the contract fee is less than your breakeven then you should contract it out, if not do it in house. The Profit Contribution Breakdown https://bizpep.com/profitcontribution.html may be of interest as well as the Pricing and Breakeven Analysis https://bizpep.com/pricebreakevenanalysis.html .

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