Total Artificial Heart Program Break-Even At $467K Monthly Revenue

Fixed costs $225.5K/mo Overhead base

Contribution margin 79.5% Year 1 net

Break-even revenue $284K/mo Monthly target

Break-even timing Month 1 Launch month

Break-even calculator

Test whether monthly revenue covers variable expenses and fixed monthly costs for a total artificial heart program.

Lean Base Full

Monthly revenue Revenue is the cash the program brings in each month before direct costs and overhead. $ Low sales High sales Variable expenses These are the direct device, supply, referral, and logistics costs that rise with volume. $ Lean costs Heavy costs

Money available to cover fixed costs $3,026,616 $3,686,500 revenue - $659,884 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the contribution margin has to cover. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which total artificial heart program expenses are fixed, and which move with sales?

Cost classification

Break-even only works if device, referral, and logistics spend move with revenue while lease and insurance stay fixed. Treat staffed coverage as fully variable and the model will overstate margin coverage.

Expense	Cost	Break-Even Treatment	Common Mistake
TAH Device and Surgical Kits	Variable	Model as 120% of revenue in the first year, falling to 100% by the fifth year.	Treating device inventory like a fixed monthly supply budget.
Specialized Surgical Consumables	Variable	Apply 30% of revenue in the first year, improving to 22% by the fifth year.	Using one flat dollar amount per month despite case volume changes.
Referral Partner Commissions	Variable	Use 40% of revenue in the first year, declining to 20% by the fifth year.	Leaving commissions in overhead instead of reducing contribution margin.
Patient Transportation and Logistics	Variable	Apply 15% of revenue in the first year, falling to 10% by the fifth year.	Ignoring transport spend when patient volume rises.
Specialized Facility Lease	Fixed	Include $120,000 per month before calculating break-even contribution.	Dividing lease into each case and calling it variable.
Medical Malpractice Insurance	Fixed	Include $45,000 per month as baseline operating coverage.	Assuming insurance disappears in low-volume months.
Utilities and Biohazard Management	Semi-fixed	Start with the $12,000 monthly baseline, then review step-ups as operating scale expands.	Spreading the full baseline across every treatment as variable spend.
Clinical Care Coordinator and Billing Staff	Semi-variable	Hold salaries within each staffing band, then increase as FTEs rise with program scale.	Treating staffed coverage as fully variable.

How does break-even change from a lean launch to base and full operating scale?

Scenario table

As the program scales, variable cost load falls from 20.5% to 15.2% while fixed overhead rises only modestly, so the break-even cushion gets wider. The lean case clears break-even, but the full case has the strongest safety margin.

Planning assumptions only; actual break-even can shift with case mix, referral flow, and staffing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch profile	$1.08M	$220.7k	$370.9k	79.5%	$485.0k	Clears break-even, but the cushion is thinest here.
Base referral scale	$3.69M	$659.9k	$393.0k	82.1%	$2.63M	Strong break-even cushion as referrals stabilize.
Full mature capacity	$6.61M	$1.00M	$415.1k	84.8%	$5.19M	Largest cushion; fixed cost drag is well covered.

What breaks the break-even plan if case volume slips or costs rise?

Stress test

At about $1.077M of monthly revenue, the first-year plan clears break-even by roughly $610k of cushion before excluded items. That cushion tightens fast if referrals slow, ICU stays run long, or device and staffing costs creep up.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; monthly revenue stays about $1.077M and variable expenses stay near 20.5%.	$466,940	$609,643 cushion	Strong cushion, but the fixed base is heavy.
Revenue shortfall	Monthly revenue falls 20% to about $861k.	$466,940	$394,326 cushion	A referral dip cuts cushion fast.
Fixed-cost increase	Fixed overhead rises 15% to about $427k per month.	$536,981	$539,602 cushion	Extra overhead eats into surplus right away.
Margin pressure	Variable expenses rise 5 points to 25.5% of revenue.	$497,881	$578,702 cushion	A small cost creep pushes break-even up.
Combined pressure	Revenue falls 20%, fixed overhead rises 15%, and variable expenses rise to 25.5%.	$572,890	$288,376 cushion	Stacked hits still leave cushion, but it shrinks hard.

Can this total artificial heart program clear break-even before you lock the lease and add staff?

Founder checklist

Before you sign the lease and add staff, prove the referral flow, reimbursement, and operating room capacity can support about $1.08M a month in Year 1. The cash test is the hard stop: capex totals $8.7M and minimum cash drops to -$3.387M in Month 6.

1Referral Flow$1.08M/mo

Verify tracked referrals can support about $1.08M a month in Year 1, and do not raise outreach spend until referral-to-implant conversion is visible.

2Fixed Burn$371K/mo

Check the lease, malpractice, compliance, licensing, utilities, and outreach stack before signing, because the model carries about $371K a month of fixed cost before device or transport spend.

3Implant Cadence2/mo

Verify the center can sustain 2 surgeon-led implants a month, since that cadence is what backs the cardiac surgeon revenue assumption.

4Claims Desk1 FTE

Test billing and coding at 1 FTE in Year 1, then confirm the path to 3 FTE by Year 5 so claims do not back up as volume rises.

5Coverage Plan2/3/4/12/2

Confirm operating room and cardiac ICU capacity before hiring deeper, and make sure Year 1 coverage exists for 2 cardiac surgeons, 3 heart failure cardiologists, 4 perfusionists, 12 critical care nurses, and 2 device technicians.

6Cash Cushion$8.7M

Verify device-kit and consumable supply agreements at 150% of Year 1 revenue, and hold cash for $8.7M of capex plus the Month 6 trough at -$3.387M before you scale outreach.