- General Dentistry
- 1 Dentist
- 2.5 Hygienists
- 1,875 Active Patients
- $1.59M Production
The Fosston, MN Clinic is a good example of the opposite side of payer strategy.
In some clinics, the right recommendation is to wait, strengthen patient acquisition, and reduce risk before making a network change. In this clinic, the facts pointed in a different direction. The question was not whether reimbursement would improve. The question was whether the practice could absorb the transition with confidence and still come out ahead. That is the same decision framework we use in every study: not just upside, but timing, demand, and downside protection.
Here, the answer was yes.
This clinic already had several things working in its favor:
- A large existing fee-for-service patient base
- Meaningful patient volume above provider-constrained capacity
- A reimbursement mix that was still leaving real money on the table
- Stress testing that stayed positive in nearly every scenario the clinic would reasonably expect to face
That combination matters. It meant this was not a clinic trying to force a risky move from a fragile starting point. It was a clinic with enough demand, enough cushion, and enough upside to make a full transition a very reasonable recommendation.
At the time of the study, the clinic looked like this:
- Annual gross production: $1.59M
- Annual net revenue: $1.20M
- Annual write-offs: $391.9K
- Weighted average reimbursement rate: 75.4%
- Estimated current profit: $480K
- Estimated expense base: $720K using a 60% expense assumption
The patient base was even more important than the income statement.
The clinic had:
- Actual patient base: 1,875
- Provider-constrained capacity: 1,500
- Excess patient volume above capacity: 375
- Existing fee-for-service patients: 898
That last point is what made this case stand out.
The clinic was not starting from scratch. It already had a meaningful cash-pay foundation. That changes the risk profile substantially. A practice with very little fee-for-service volume often needs to prove demand or build acquisition first. A practice that already has a large self-pay base and more patients than provider capacity can support is in a very different position.
When we modeled a complete move out of network, the financial upside was substantial.
- Projected revenue: $1.59M
- Revenue increase: +$391.9K
- Revenue increase percentage: +32.7%
- Projected profit: $871.9K
- Profit increase percentage: +81.6%
- WARR: 100.0%
- Write-offs: $0
That is a meaningful improvement. This was not a situation where the clinic was taking on major risk for a marginal gain. The increase in collections was large enough to matter, and the profit lift was even more compelling.
Just as important, the patient-base math supported the move.
Using a planned attrition assumption of 30%, the model showed:
- Patients expected to leave after the drop: 293
- Patients expected to stay and convert to cash: 684
- Projected total post-transition patient base: 1,582
Even after attrition, the clinic still projected above provider-constrained capacity. That is a very different setup from a clinic that would fall into a large shortfall and need to scramble to replace lost demand.
This is where the story becomes straightforward.
We did not recommend a phased move because the clinic did not need one.
A phased strategy is useful when a clinic needs time to learn, time to build confidence, or time to prove that demand can be replaced. Here, the clinic already had the patient base and the fee-for-service footing to make a full move viable from the start. The model was not asking the clinic to bet on perfect execution just to survive. It showed a business that could withstand substantial disruption and still remain ahead.
That is what gave us confidence in the recommendation.
The clinic’s success did not depend on best-case assumptions. It depended on a patient base that was already large, already strong, and already more favorable to a cash-pay transition than many clinics ever reach.
This was not a recommendation based only on a baseline case.
The real confidence came from the stress testing.
- The move remained financially positive through about 54% attrition
- It only turned negative at about 55% attrition
That is a very wide cushion. In most real-world transitions, if a clinic can stay positive even after more than half of the affected patient base leaves, the decision begins to look much less speculative and much more durable.
- The move remained positive through about a 24% reduction in reimbursement or production
- It only turned negative at roughly a 25% decline
That is another unusually strong result. A clinic does not need perfect retention or perfect execution for the transition to make sense. The model allowed for a very meaningful decline before the economics stopped working.
- Even when attrition and production pressure were layered together, the model remained positive across nearly the entire tested range
- The transition only became unattractive in extreme scenarios, where multiple downside factors were compounding at once beyond what most clinics would reasonably expect
That is the key point. The recommendation was not based on optimism. It was based on resilience.
For other owners, this is the most important lesson.
Not every clinic should move out of network right away. Some should not. Some need to first prove acquisition channels, reduce churn, improve new patient access, or build stronger cash-pay demand. But that was not this clinic’s story.
The Fosston, MN Clinic already had:
- A strong enough existing fee-for-service base
- More patient volume than provider-constrained capacity required
- A large enough revenue lift to justify the change
- Broad downside protection in the stress testing
That is why this case ended differently.
The recommendation was not to delay. It was not to move in phases. It was not to first build a bigger acquisition engine and revisit the decision later.
The recommendation was to move fully out of network.
This case is useful because it shows what a strong candidate actually looks like.
A strong candidate is not just underpaid. Many clinics are underpaid.
A strong candidate has:
- Real fee-for-service footing already in place
- Enough patient-base strength to absorb attrition
- Enough upside for the move to matter
- Enough downside protection that success does not depend on perfect conditions
That is what the Fosston, MN Clinic had.
The value of the study was not simply showing that collections would improve. It was showing that the clinic had a high likelihood of success even if the transition was messy, even if attrition ran higher than hoped, and even if production softened. That is a much better standard for decision-making than looking at a baseline case alone.
For this clinic, the answer was clear. The economics improved meaningfully, the patient base remained strong, and the multivariable analysis suggested that only extreme scenarios would make the move unsuccessful.
That is why the recommendation was a full exit. Not because the idea sounded bold, but because the numbers showed the clinic had earned the right to make it.
