Trends in Dentistry: Solutions to Challenges Facing Practitioners in 2025

Staffing costs and shortages.

The challenge: Staffing, particularly in roles requiring formal education and training such as hygienists and dental assistants, has been a persistent pain point for practice owners. Wage growth for hygienists surged by 26.6% between 2018 and 2023, driven by labor shortages exacerbated during the pandemic. While hiring challenges have begun to ease slightly, wage pressures remain, and turnover continues to strain practices. In a 2024 Q2 economic outlook update by the ADA’s HPI, of the 52% of respondents who identified adding staff heading into 2024, 38.4% had done so thus far.

Actionable strategies:

• Invest in culture and leadership. Hygienists leaving the workforce frequently cite poor leadership, lack of growth opportunities, and feeling overworked as primary reasons for their departure. Creating a team-oriented environment and fostering open communication can improve retention.
• Offer career development. Consider supporting continuing education for expanded-function roles, accompanied by workback agreements to ensure practice benefits.
• Promote employee benefits. Introduce or enhance qualified retirement plans and educate employees on their value. Tie these benefits to vesting schedules to encourage long-term commitment.
• Focus on marginal profitability. Want to maintain a profitable hygiene department? According to the“rule of thirds,” hygiene should account for one-third of production while costing one-third of collections.

With thoughtful management, practices can mitigate staffing challenges while maintaining patient satisfaction and profitability.

Low insurance reimbursement rates.

The challenge: Stagnant and declining insurance reimbursements continue to squeeze practice profitability. Collections loss can reach as high as 25% to 35% of production, making it one of the largest hidden costs for dentists. Many practices are exploring whether to drop low-reimbursement networks entirely. In the 2024 Q2 economic outlook update by the ADA’s HPI, of the 42.5% of respondents who identified dropping out of some insurance networks in 2024, 24.8% had done so in their practice.

Actionable strategies:

• Differentiate your practice. Practices offering premium patient experiences can justify higher fees, akin to fine dining versus fast food. A strong reputation and focus on quality care are critical for successfully transitioning to out-of-network or fee-for-service models.
• Analyze competitors' moves. Learn from nearby practices dropping insurance providers. Being strategic about timing — whether as a first mover or the last provider standing — can help define your patient retention strategy.
• Prepare staff for transition. Equip your front office team with clear, empathetic communication strategies to guide patients through changes in insurance policies, ensuring smooth transitions and high retention rates.
• Advocate for industry change. Support initiatives like dental loss ratio legislation and maintain fees that align with inflation to push back against inadequate reimbursement rates.

Strategic planning and excellent patient communication are vital when managing the risks and opportunities of insurance network changes.

Rising overhead costs.

The challenge: Overhead costs, which had been relatively stable, increased in all major cost categories over the past few years. The “State of the Dental Economy - Q3 2022 Update” indicated practices saw an increase in major cost categories. As inflation moderates, the impact of these higher costs still lingers.

Actionable strategies:

• Optimize marginal profitability. Understand fixed versus variable costs and prioritize maximizing production within your current capacity. For instance, increasing production by $100,000 without needing additional staff, capital expenditures, or expanding hours can significantly boost profitability.
• Make smart investments. Evaluate equipment purchases focused on cash flow rather than solely on ROI. Choose investments that generate positive cash flow after financing costs, thereby enhancing practice value and profitability.
• Negotiate lending terms. With borrowing costs high, focus on securing loans with minimal prepayment penalties or options for rate resets. As rates decline, refinancing will allow for long-term cost savings.
• Control variable costs. Actively manage lab fees and supply costs, ensuring efficient use without sacrificing quality of care.

Proactive financial management and strategic investment decisions are crucial to navigating today’s elevated cost environment.

While the challenges of staffing shortages, insurance reimbursement rates, and overhead costs may seem daunting, practice owners have the tools to navigate these trends. By fostering strong team cultures, building patient loyalty, and maintaining financial discipline, owners can not only overcome current challenges but also position their practices for long-term success.

Dentistry remains a rewarding profession with the potential for both personal and financial fulfillment. By staying informed and strategic, practice owners can chart a path to growth and profitability in a changing landscape. If you would like to explore how these trends may impact your practice and discover strategies to mitigate them, our team would love to help! Schedule a conversation with a practice integration advisor today! 

For informational and educational purposes only and should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third party data and may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of this information.