Insurance pays less. Your costs go up. The gap is widening every quarter.
59% of dental insurance plans lowered reimbursements this year. Not adjusted for inflation. Not held flat. Lowered. The dollar amount they pay you for the same procedure went down.
Meanwhile, your hygienist wants a raise (and deserves it — the labor market is brutal). Your supply costs are up. Your rent went up. Your malpractice insurance went up. Equipment maintenance, lab fees, technology subscriptions — all up.
The gap between what insurance pays and what it costs you to deliver care is getting wider every quarter. And if you're like most practices, you're seeing more patients to compensate — which means more overhead, more burnout, and more of the same.
The squeeze in real dollars
Here's what the reimbursement squeeze looks like on a typical general practice:
You do a crown. Your all-in cost to deliver that crown — chair time, lab fee, supplies, assistant time, overhead allocation — is $850. Insurance reimburses $720. You're doing the procedure at a $130 loss before the patient's copay.
If the copay is $200, you net $70 on an $850 cost. That's an 8% margin on a procedure that should generate 25–35%.
Now multiply that across every insurance-dependent procedure in your practice. If 60% of your revenue comes from insured patients and reimbursements dropped 3–5% across plans, you just lost $45,000–$100,000 in annual margin without seeing a single fewer patient.
Only 46% of small employer firms were profitable in 2024
That's the Federal Reserve number. And dental practices are not exempt.
The practices that are profitable have one thing in common: they know their true cost to deliver every procedure. They can look at an insurance fee schedule and immediately see which procedures are profitable and which ones they're losing money on.
The practices that are struggling are the ones guessing. They set fees based on "usual and customary" without knowing their actual costs. They accept every insurance plan without calculating whether the reimbursement covers the cost of care.
Why "just see more patients" doesn't work
The instinctive response to falling reimbursements is to increase volume. See more patients. Add more hygiene days. Extend hours.
But volume without margin is a treadmill. Every additional patient comes with additional cost — staff time, supplies, wear on equipment, risk of burnout. If the margin per patient is thin or negative, more patients means more work for the same (or less) profit.
63% of small business owners report burnout. In dental, that number feels low. You're already working 4.5 clinical days and half a day on admin. Where exactly would you fit more patients — and would your team stay if you did?
The practices navigating this successfully
Practices that improved profitability despite the reimbursement squeeze share three characteristics:
They know their chair cost per hour. Every practice should know this number. What does it cost to operate one operatory for one hour? Doctor time, assistant time, hygiene time (if applicable), rent, utilities, equipment, supplies, overhead. That number is the floor. Any procedure reimbursed below that floor is a loss.
They evaluate every insurance plan financially. Not all plans are worth participating in. Some plans reimburse below your cost to deliver. Dropping a plan that pays 30% below your chair cost isn't losing patients — it's stopping subsidizing an insurance company with your labor.
They built fee-for-service revenue. Whitening, cosmetic work, implants, orthodontics — services where you set the price based on your cost and value, not an insurance company's spreadsheet.
See where the squeeze is hitting your practice hardest
We pull your practice management data and calculate your true cost per procedure. We show you which insurance plans are profitable and which ones are costing you money. We quantify the gap.
Not theory. Your numbers.
Call (507) 577-5982 or book a discovery call.
15 minutes. Free. No pitch.
See how we work with dental practices, or learn about our full process.