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In this episode of the Dental Boardroom Podcast, host Wes Read, CPA and financial advisor at Practice CFO, and an AI co-host unpack the ADA Health Policy Institute’s Q3 2025 “State of the Dental Economy” report. The data paints a complex picture of a dental sector stuck in an uneasy holding pattern where rising costs, flat reimbursements, and persistent staffing shortages are squeezing practices nationwide.
Despite modest growth in consumer dental spending, many practices report being less busy than before, caught between financial pressure and patient affordability challenges. The discussion dives deep into the fiscal squeeze, workforce struggles (especially hygienists), and the strategic choices dental practices are making to adapt.
[00:00:00] Wes Read: Welcome everybody to another episode of the Dental Boardroom podcast. As you know, every quarter I do an update on the status of the dental industry using the a DA report that they put out to the public, and I'm using AI to summarize it, which will honestly just do a much better clear job than me on this.
[00:00:24] Wes Read: It's the one area where I do use AI for a full episode. Hope you enjoy.
[00:00:29] AI Agent Female: Welcome to the Deep Dive. Today we're digging into a really important economic snapshot. It's the Q3 2025. State of the US Dental Economy Report comes straight from the A DA Health Policy Institute.
[00:00:43] AI Agent Male: Yeah, and this is one you'll want to pay attention to.
[00:00:45] AI Agent Male: It blends what dentists are actually seeing on the ground day to day with those big federal economic stats.
[00:00:52] AI Agent Female: And the headline finding It sounds a bit. Stalled. They're calling the dental autonomy. A holding pattern.
[00:00:58] AI Agent Male: Exactly. A holding pattern. Sounds neutral maybe. But underneath, uh, there are some real contradictions bubbling up.
[00:01:06] AI Agent Female: That's what jumped out at me. How can consumer spending be going up while dentists are telling the a DA, they're less busy. It just doesn't quite add up on the surface.
[00:01:13] AI Agent Male: That's a core tension. You're right. And that's our mission today. Really we need to unpack the reports'. Four main parts. You've got economic confidence, consumer spending.
[00:01:23] AI Agent Male: Practice economics and then the jobs market.
[00:01:25] AI Agent Female: Okay.
[00:01:26] AI Agent Male: And try to figure out what's actually driving this. Well, this stagnation, we'll talk a lot about something called the fiscal squeeze,
[00:01:32] AI Agent Female: right? The fiscal squeeze.
[00:01:33] AI Agent Male: It's this, um, intense pressure where cost, supplies, staff, everything are rising way faster than what insurance public or private is paying out.
[00:01:43] AI Agent Female: Which forces some tough choices for practices, I imagine.
[00:01:46] AI Agent Male: Exactly. Painful choices, strategic choices. We'll see why some are dropping insurance plans, what tech they're investing in,
[00:01:53] AI Agent Female: and the hiring thing. Especially hygienists. Why has that been such a persistent headache?
[00:01:59] AI Agent Male: Yeah, it's a huge piece of the puzzle.
[00:02:01] AI Agent Male: Hmm. So let's look at this not just as numbers, but as you know, the reality for thousands of dental practices out there. Small businesses trying to navigate this. Okay,
[00:02:10] AI Agent Female: let's do it. Where do we start? Confidence levels.
[00:02:12] AI Agent Male: Yeah. Let's start with the mood. How are dentists feeling looking at Q3 2025? Confidence, sort of stabilized a bit, but uh, the overall feeling is still pretty cautious,
[00:02:22] AI Agent Female: stabilized, but from a lower point, right?
[00:02:24] AI Agent Female: Like things didn't get worse in Q3, but they weren't exactly great either.
[00:02:29] AI Agent Male: That's the perfect way to put it. We saw tiny little upticks confidence in the overall US economy. It nudged up, but still only about a third, 33.4% felt confident.
[00:02:39] AI Agent Female: Wow. Only a third
[00:02:40] AI Agent Male: confidence in their own practice did better. Uh, 67.5% and then confidence in the whole dental care sector was basically flat.
[00:02:47] AI Agent Male: 56.3%.
[00:02:49] AI Agent Female: Okay. But the key takeaway here, the thing to really focus on is that all three, the US economy, their own practice, the dental sector. They're all still down compared to the beginning of 2025. Q1 was more optimistic.
[00:03:02] AI Agent Male: Absolutely. It's like a very slight bounce in Q3, but the trend for the year is. Well, it's eroded optimism.
[00:03:08] AI Agent Female: So why, what are the specific worries driving this caution, especially about the broader economy?
[00:03:14] AI Agent Male: Well, it connects the dental office to like global headlines. Mm-hmm. When dentists are skeptical about the national economy, the top things they mention are concerns about tariffs. Just general uncertainty, you know?
[00:03:25] AI Agent Male: Mm-hmm. Domestic, political or social unrest comes up too. And uh, geopolitical turmoil, basically e external shocks, they can't control.
[00:03:32] AI Agent Female: That makes sense. Fear of the unknown really. But not everyone was pessimistic. Right? Some felt confident,
[00:03:37] AI Agent Male: right? It's definitely a split view. The more optimistic dentists pointed to, um.
[00:03:42] AI Agent Male: A belief in the fundamental strength and resiliency of the US economy. And some mentioned being okay with current trade and tax policies.
[00:03:49] AI Agent Female: Okay, so that's the big picture view. What about when they look specifically at the dental sector? Does the skepticism change focus?
[00:03:55] AI Agent Male: Oh, absolutely. It gets much more specific, much more.
[00:03:58] AI Agent Male: Well operational, and this is where that fiscal squeeze really starts to show its teeth.
[00:04:03] AI Agent Female: Ah, okay. So what are the top dental specific worries?
[00:04:07] AI Agent Male: Number one, by far, low insurance reimbursement rates that came up again and again. Also the general state of the US economy impacting patients. And then critically.
[00:04:18] AI Agent Male: Patient inability to pay for care,
[00:04:20] AI Agent Female: patient affordability,
[00:04:21] AI Agent Male: and even patients maybe not prioritizing dental care as much right now.
[00:04:25] AI Agent Female: There were some quotes in the report that really hit this home, weren't there? Yeah,
[00:04:28] AI Agent Male: really powerful ones. One dentist said something like the cost of running a practice. Has far outpaced reimbursement rates and then added whether from third party payers or the ability of patients to self-pay.
[00:04:39] AI Agent Female: Oof. So they feel squeezed from both sides. Insurers aren't paying enough and patients are struggling too.
[00:04:45] AI Agent Male: Exactly. And another quote pointed to patient behavior changing, saying, people quote, see dentistry as not important and are cutting back on discretionary spending.
[00:04:55] AI Agent Female: That perception that dentistry is discretionary, that's gotta hurt and it links right back to the busyness question we need to tackle later.
[00:05:03] AI Agent Male: It absolutely does. Yeah. But you know, even with all this caution, there is some optimism specifically about the dental field.
[00:05:10] AI Agent Female: Okay. What's driving that?
[00:05:11] AI Agent Male: It seems rooted in the long view, a fundamental belief that, well, people will always need dental care. You know, teeth need cleaning, cavities need filling, basic resiliency.
[00:05:21] AI Agent Female: Sure. Demand is somewhat constant.
[00:05:23] AI Agent Male: And interestingly, some look ahead and see opportunity. There's a quote about boomer dentists retiring and difficult to replace, suggesting that this will actually increase the patient pool for those who remain.
[00:05:33] AI Agent Female: Ah, so a potential future supply and demand shift working in their favor.
[00:05:38] AI Agent Female: Interesting. So immediate cost pressures now versus maybe. Maybe more patients down the road. Given that tension, what are they doing right now? Are they investing, pulling back?
[00:05:50] AI Agent Male: Well, the report shows they're largely sticking to their 2025 plans, especially for major investments. They seem to be trying to adapt.
[00:05:56] AI Agent Female: Okay. Like what
[00:05:57] AI Agent Male: The two areas with the biggest follow through compared to plans made back in late 2024 we're, uh, number one. Investing in new software, but 41% did that.
[00:06:07] AI Agent Female: Trying to boost efficiency maybe.
[00:06:09] AI Agent Male: Seems likely. Yeah. And number two, adding staff. Yeah. Almost half, 47.5% acted on plans to hire.
[00:06:15] AI Agent Female: Okay. So they're trying to streamline with software and potentially increase capacity with staff, even with all this economic uncertainty swirling around.
[00:06:21] AI Agent Male: Yeah. It suggests they're trying to control what they can control inside the practice walls.
[00:06:25] AI Agent Female: Right. Let's get to that paradox. The money versus the busyness. What are the hard numbers on consumer spending?
[00:06:31] AI Agent Male: Okay, so looking at the money first, it's definitely up. Consumer spending on dental care as of August 20, 25 was up 4% just for this year.
[00:06:39] AI Agent Male: So far,
[00:06:40] AI Agent Female: 4% this year. Okay.
[00:06:42] AI Agent Male: And. Maybe more importantly compared to before the pandemic January, 2020, it's up a solid 10%. Yeah. And that's adjusted for inflation.
[00:06:50] AI Agent Female: Wait, hang on. 10% more inflation adjusted spending on dental now than pre pandemic. That that sounds like things should be booming. Right? How are dentists not busy?
[00:06:59] AI Agent Male: Well see that's where the context matters. 10% sounds good and it is growth, but wait. But it's lagging, badly lagging behind the rest of healthcare spending. Overall health spending is up 20% since January, 2020. Physician services. Up 21%.
[00:07:15] AI Agent Female: Uh, so dental's, 10% growth is only half the pace of doctor's offices and overall health spending.
[00:07:20] AI Agent Female: It's losing ground relatively
[00:07:22] AI Agent Male: precisely. It's playing catch up and not very successfully compared to other sectors.
[00:07:26] AI Agent Female: Okay, that provides some perspective, but still 10% real growth. You'd think that would fill some empty appointment slots, yet the report says the share of dentists reporting, they're not busy enough.
[00:07:35] AI Agent Female: Actually surged in Q3,
[00:07:37] AI Agent Male: it really did jumped significantly. It went from about one quarter, maybe 25% in Q2. Feeling not busy enough up to more than one third, 35%. In Q3,
[00:07:46] AI Agent Female: I jumped from 25% to 35% in one quarter. That's a big shift in sentiment.
[00:07:51] AI Agent Male: It is, and it shows that this modest spending growth, it's just not translating into packed waiting rooms.
[00:07:59] AI Agent Male: The capacity seems to be easily handling it,
[00:08:01] AI Agent Female: and we can see that in the wait times too. Right? That's usually a good indicator of how slammed practices are.
[00:08:06] AI Agent Male: Exactly. Appointment wait times for new patients. They've dropped for the second quarter in a row. How
[00:08:12] AI Agent Female: low are they? They
[00:08:12] AI Agent Male: hit a three year low. The average weight is now just over 12 days.
[00:08:16] AI Agent Female: 12 days in many places. You could probably call today and get in next week. That's. That's really not long.
[00:08:21] AI Agent Male: No, it's not. And it confirms the picture. Whatever spending growth is happening, it's being easily absorbed by the current system. Capacity practices aren't stretched thin at all. There's no backlog building up like we saw maybe a year or two ago when things were hotter.
[00:08:35] AI Agent Female: So more money flowing overall, but it's not leading to more patient visits, or at least not enough to make dentists feel busy. Maybe it's concentrated on higher cost treatments for fewer people, or maybe, maybe there's just too much chair time available right now relative to demand.
[00:08:50] AI Agent Male: It could be a mix of both.
[00:08:52] AI Agent Male: It's a really complex picture.
[00:08:53] AI Agent Female: Okay. Let's dive deeper into that fiscal squeeze, because it feels like this is the engine driving. A lot of these contradictions costs up, but busyness down, right? Something's gotta give.
[00:09:03] AI Agent Male: Absolutely. And the cost side is, well, it's relentless. Let's break it down first, just the basic inputs, dental equipment, supplies.
[00:09:12] AI Agent Male: Prices for that stuff are up 5% just since the start of 2025.
[00:09:17] AI Agent Female: 5% in about eight months. Okay?
[00:09:19] AI Agent Male: And then there's labor. While overall hiring is flat. Right now, the cost of labor isn't over the longer term. Hourly pay for dental office staff has consistently crept up slightly faster than general inflation. So your team costs more, your supplies cost more.
[00:09:33] AI Agent Female: Everything costs more. So how are practices responding? They can't just absorb that forever.
[00:09:37] AI Agent Male: They're not. If they're raising their prices. The data is really clear here. Two thirds of dentists that 65.8% reported increasing their fees this year, 2025.
[00:09:45] AI Agent Female: Two thirds raise fees by how much on average?
[00:09:48] AI Agent Male: The average reported increase across their whole fee schedule was 6.7%.
[00:09:53] AI Agent Female: Wow. Nearly 7%. That's, that's a significant hike for patients to potentially face.
[00:09:59] AI Agent Male: It is. But you have to see it as a defensive move. This ties directly back to the confidence section and those reimbursement woes,
[00:10:06] AI Agent Female: right? Because insurance payments aren't keeping up,
[00:10:08] AI Agent Male: not even close provider reimbursement rates.
[00:10:11] AI Agent Male: PPO rates, public insurance rates. They're not keeping pace with that 5% plus cost inflation, let alone overall inflation. There's essentially flat while everything else gets more expensive,
[00:10:21] AI Agent Female: and that gap costs rising, fast payments staying flat. That's the fiscal squeeze in action.
[00:10:26] AI Agent Male: That is the definition of it.
[00:10:27] AI Agent Male: Yes, it forces that 6.7% fee increase just to try and maintain margins,
[00:10:33] AI Agent Female: which then of course, circles right back to the patient affordability problem that dentists were citing as a reason for pessimism.
[00:10:39] AI Agent Male: Exactly. It's a vicious cycle, isn't it? They raise fees because costs and low reimbursements give them no choice, but doing so might make care less affordable.
[00:10:48] AI Agent Male: Potentially suppressing demand and contributing to that. Not busy enough feeling.
[00:10:52] AI Agent Female: Man, that is a tough spot. So what's the strategic escape hatch? If raising fees has its own downsides, what else are they doing?
[00:11:02] AI Agent Male: Well, the report highlights a pretty drastic step. Some are taking this fiscal squeeze is directly pushing practices to start dropping out of certain insurance networks altogether.
[00:11:10] AI Agent Female: Really just refusing to accept specific PPO plans anymore.
[00:11:15] AI Agent Male: Yeah, it's a way to regain control over their pricing. They're essentially saying to those insurers, look, your reimbursement rate is below our cost to provide the service. We can't afford to accept it anymore. We'll charge our full fee instead.
[00:11:27] AI Agent Female: That's a huge decision. It could mean losing patients who have that insurance.
[00:11:32] AI Agent Male: Absolutely. It's high stakes.
[00:11:33] AI Agent Female: Yeah. Yeah. But
[00:11:34] AI Agent Male: for some practices, it might feel like the only way to stay financially viable to avoid actually losing money on insured patients.
[00:11:40] AI Agent Female: Okay. Let's switch to the last piece. The jobs market, it connects to the cost squeeze through labor expenses, but there's this whole other riddle happening here too, right?
[00:11:50] AI Agent Male: Yeah. The labor situation is unique. First, the big picture. Hiring was basically flat in Q3 2025. That's true for the overall US economy and specifically for the dental care sector too.
[00:12:03] AI Agent Female: Collect growth.
[00:12:04] AI Agent Male: Yeah. Looking back over the past year, dental sector employment is only up by a tiny amount, like 0.5%, half a percent.
[00:12:11] AI Agent Female: And are the people who are employed working fewer hours?
[00:12:14] AI Agent Male: Slightly. Yeah. There's a small downward trend in the average weekly hours for dental staff down to about 0.4 hours compared to a year ago. So flat employment. Slightly fewer hours on average.
[00:12:25] AI Agent Female: Okay, so you hear flat employment, fewer hours, and you might think, okay, so demand for workers must be low.
[00:12:30] AI Agent Female: That's not the case here, is it?
[00:12:32] AI Agent Male: Not at all. That's the riddle. Despite the stagnant growth numbers, the need for staff, their recruitment activity is actually really high.
[00:12:39] AI Agent Female: How high?
[00:12:40] AI Agent Male: About one in three dentists were actively trying to hire. In Q3 specifically, 37.5% were recruiting dental assistants and 32.5% were recruiting hygienists.
[00:12:50] AI Agent Female: So a third of practices are looking for people, but overall employment isn't growing. That means they're just not finding them or not finding them fast enough.
[00:12:58] AI Agent Male: Exactly. The market isn't flat because demand is low. It seems to be flat because the hiring process itself is incredibly difficult, especially for one key role.
[00:13:07] AI Agent Female: Let me guess, hygienists.
[00:13:09] AI Agent Male: I know dental hygienists, it remains the single hardest position to fill in a dental office. Period.
[00:13:15] AI Agent Female: How hard are we talking?
[00:13:16] AI Agent Male: The number is just staggering. 90%, nine zero, 90% of dentists who were recruiting for a hygienist rated the process as very or extremely challenging.
[00:13:28] AI Agent Female: 90%.
[00:13:29] AI Agent Female: That's. That's basically everyone finding it incredibly difficult and has it always been this bad?
[00:13:35] AI Agent Male: That's the other alarming part, that 90% figure it's been virtually unchanged for the last three years. This isn't some temporary blip. Yeah, it's a deep structural problem in the dental workforce pipeline.
[00:13:44] AI Agent Female: A three year crisis in hiring hygienists.
[00:13:47] AI Agent Female: Wow. Does this difficulty show up in the actual success rates? Are they managing to fill these roles? Eventually,
[00:13:53] AI Agent Male: you can see the struggle clearly in the hiring outcomes. Compare hygienists to assistants practices. Recruiting for dental assistants. Nearly two thirds, 62.3% managed to fill the open position.
[00:14:04] AI Agent Female: Okay, so still challenging maybe, but doable for most.
[00:14:07] AI Agent Male: Right? But for hygienists only about two out of 5, 42 0.8% successfully fill their open position. That's a massive difference in success. Rates
[00:14:16] AI Agent Female: less than half are succeeding in hiring a hygienist they're looking for,
[00:14:20] AI Agent Male: which means many practices are operating short staffed in a really critical revenue generating role.
[00:14:26] AI Agent Female: Even when they do finally hire someone, how long did that take? I remember seeing something about that.
[00:14:31] AI Agent Male: Yeah. The time to hire data really underscores the struggle for the hygienist positions that were successfully filled. One fifth of them, 21.5% had been open for more than six months,
[00:14:42] AI Agent Female: six months. Half a year trying to fill one crucial position.
[00:14:46] AI Agent Female: Think of the lost production, the scheduling headaches
[00:14:48] AI Agent Male: exactly half a year of deferred patient care, potentially lost revenue and extra stress on the rest of the team. It puts a hard cap on the practice's ability to grow or even just handle the existing, albeit modest demand effectively.
[00:15:02] AI Agent Female: So the fiscal squeeze is hitting costs.
[00:15:04] AI Agent Female: Reimbursement isn't keeping up, forcing fee hikes, and then the inability to hire key staff like hygienists means they can't even fully capitalize on any potential patient volume to offset those rising costs. What a tangle.
[00:15:19] AI Agent Male: It's a real tangle. Every piece seems connected in this uneasy holding pattern.
[00:15:23] AI Agent Male: Hashtag tag tags al to chuck down.
[00:15:25] AI Agent Female: Okay, so wrapping up this deep dive into the Q3 2025 dental economy. The picture is definitely one of, uh, like you said, an uneasy holding pattern.
[00:15:35] AI Agent Male: Yeah, I think that's the right term. We've seen how the high costs for supplies and staff combined with flat insurance reimbursements really create that intense fiscal squeeze,
[00:15:44] AI Agent Female: right?
[00:15:44] AI Agent Female: And that squeezes forcing difficult decisions.
[00:15:47] AI Agent Male: It forces those nearly 7% fee increases, which then bumps up against patient affordability concerns. Something dentists themselves are worried about.
[00:15:53] AI Agent Female: Which might explain at least partly why busyness is down and wait times are shrinking, even though overall consumer spending is technically up a bit from pre pandemic levels.
[00:16:02] AI Agent Male: Exactly. And layered on top of all that economic pressure is the persistent, really acute difficulty in hiring dental hygienists that acts like a governor on the. Limiting the practice's ability to actually deliver care and generate revenue, even if demand were stronger.
[00:16:19] AI Agent Female: So the system seems kind of stuck.
[00:16:22] AI Agent Female: Costs go up, fees go up, potentially pushing some patients away or making them delay care while the inability to staff properly prevents practices from efficiently handling the patients they do have.
[00:16:32] AI Agent Male: It's a tough balancing act right now.
[00:16:34] AI Agent Female: So thinking about all this, here's something for you, our listener to consider.
[00:16:38] AI Agent Female: If two thirds of dentists are raising fees significantly because of this, squeeze and affordability is a top concern, what happens next? Beyond just dropping insurance plans, what other maybe more fundamental changes might the dental sector need to embrace?
[00:16:53] AI Agent Male: Yeah. What immediate shifts in technology, maybe in how care is delivered, maybe in the workforce model itself are needed to break this cycle?
[00:17:00] AI Agent Male: To balance the rising cost of providing care with the very real limits on staffing
[00:17:05] AI Agent Female: before this holding pattern, maybe tips into something worse, like a real headwind for the sector.
[00:17:10] AI Agent Male: It's a critical question. Lots to think about there regarding efficiency, workforce development, and the future shape of dental practice.
[00:17:17] AI Agent Female: Definitely something to mull over. That's all the time we have for this deep dive. Thanks for joining us. [00:17:22] AI Agent Male: Thanks everyone.
Wes knows what's best for dental practices. He's been doing this for a long time and he sees lots of practices. He can tell me how our practice is doing, and what we can do to increase our productivity. With past CPA's, there were no ideas. It was all coming from me, saying "I think I can do better, but I don't know how." I come in to meet with Wes and he says "You CAN do better, and I know how."
PracticeCFO is in hundreds of dental offices around the country. They know what numbers should look like. They know what percentages of payroll, rent and supplies should be, and they will hold you accountable to those numbers, which will really help you stick to your plan and your path of growth and savings. That is invaluable
Whenever something comes up, whether it's building or practice related and we weren't sure where the numbers would go, PracticeCFO has been instrumental in helping us figure that out. I can't say enough of how important that is - that it goes beyond that initial partnership. They make sure this business marriage works.
When I go home from work, I don't spend a whole lot of time stressing about what my books look like, or how much I owe in taxes. By using PracticeCFO, the burden of keeping track of a lot of the big financial numbers and metrics are taken off my plate.
PracticeCFO helped me develop a plan for the future. I have colleagues that work with other accountants that don't have a plan - they just look at the numbers of the practice and that's it. There's no plan for 10, 20 years from now. But with PracticeCFO, you get that. PracticeCFO makes you feel like you're they're only client.
(In reference to his practice sale) What could've been super stressful, wasn't! When picking John and Wes, it was from word of mouth recommendations and other people's experiences from the past that really did it for me. And it turns out that those recommendations were right on the line.
Wes knows the business side of dentistry. His comprehensive plan will organize your personal and professional finances so you can focus on taking care of patients. Massive ROI.
I can’t say enough good things about everyone at PracticeCFO. Everyone on the team is professional, organized, knowledgeable, helpful and kind. They also respond to emails and phone calls immediately and are always happy to help. They have helped me navigate year-to-year as a business owner. PracticeCFO gives me peace of mind that my business is in good hands.
I love Practice CFO! They have helped me obtain a practice and maintain a practice. They are incredible people who are on top of everything and make owning and running the business portion of a practice easy. They couldn’t be better for my business and my sanity. They have every detail of the business and taxes taken care of where all I have to do is show up and follow their easy steps to success!
Practice CFO has the best tools I’ve seen for personal tax and financial planning in addition to top-tier corporate tax and accounting services. I have been very pleased with the level of quality service. They manage my monthly bookkeeping and accounts payable. It is a great system and saves me a ton of time, and it allows us to have monthly financial statements within a week of month end.
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