Reimbursement rates
Although several states have increased reimbursement rates for dental services, they are still not enough to keep up with the pace of inflation, according to data from the American Dental Association.
The ADA reported that reimbursement rates increased slightly in February. However, long-term trends show rates are not keeping pace with overall inflation or the rise in practice expenses. Reimbursement rates in most states fall below 50% of dentist charges and 60% of private insurance reimbursement, according to 2025 data from the ADA.
William Simon, DMD, the Owner of City Smiles in Chicago, told Becker’s stagnant reimbursement rates could lead practice owners to make tough sacrifices in other areas in order to remain financially sustainable.
“As the cost of providing quality care continues to rise, compromises must be made to sustain the dental practice,” he said. “This could be anything from lower quality materials to decreased appointment times and customer service to inability to implement new equipment and technology.”
Reimbursement rates are also a large reason why dentists are choosing to drop out of insurance networks. An October 2024 report from the ADA found that more than 26% of dentists had dropped out of some insurance networks since the start of the year. Nearly 100% of these dentists listed reimbursement rates as the reason why, followed by administrative burden.
Rising staffing costs
Rising staffing costs continue to burden practice owners. Nearly 70% of dentists described recruitment of dental assistants as “very” or “extremely challenging.” Additionally, more than 90% of dentists who have actively been recruiting dental hygienists over the past three months said it has been “very” or “extremely” challenging. The demand for high wages and benefits was among the many challenges dentists have described facing for both positions.
The ADA reported in April that hourly earnings for dental staff increased by 2% during the 12 month period ending in February.
Debra Bafia, office manager at Ethos Dental Group in Munster, Ind., told Becker’s she expects rising staff wages to be a dominating trend this year, due to rising education costs and the high cost of living.
“From an employer’s perspective, applicants are requesting higher wages to account for the increasing cost of living (as well as being able to pay back their student loans), which makes being competitive in this market that much more difficult,” she said. “I am optimistic that the right candidates will still find a way to their “dental home,” but I think the industry is going to have its fair share of struggles for quite some time.”
Increased supply costs
Prices for dental equipment and supplies increased 6% during the 12 month period ending in February, compared to a 2% inflation rate, according to data from the ADA.
Stan Kinder, founder of Everything DSO, recently told Becker’s that increased costs combined with flat reimbursements is creating additional barriers for dentists, and that these price hikes could also begin to affect patients.
“There is no question that inflation is putting pressure on profitability,” he said. “This is particularly challenging given that insurance reimbursements have remained flat or some instances even declining. I think there is also a growing concern that we may be approaching the point where it might begin to impact the dental consumer. The net effect short term is that many, if not most, dentists are working harder to earn less.”
In addition to overall inflation rates being up, practice owners are also seeing increased costs as a side effect of the ongoing Iran war.
“Oil, when you can get it, has increased to over $100 a barrel, and creates a cascade of effects on just about everything,” Barry Lyon, DDS, director of provider recruiting and onboarding at Dental Care Alliance, told Becker’s. “In particular, dental materials are heavily dependent on petrochemical resources and supplies. The costs of lab fees, composites and gloves, among many needed items, are rising. For DSOs already on thin margins, this news is bad.”
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