Dental economics in 2025: How rising supply costs and stagnant insurance reimbursements are squeezing practices after tariffs

Every year, dental practices face new challenges. Fee changes and growing costs require practices to rethink their structures to sustain a business. In addition, there are other issues of great importance for 2025: tariffs and new import costs for the United States. This forces us to move and rethink the dental industry on several levels.

Caught between rising costs and flatlined reimbursement rates, the pressure on margins has never been greater. While patient demand is stable, labor shortages and the impact of new trade taxes on dental supplies are outpacing growth. This raises several situations related to:

• Supplies and materials for dentistry.
• Labor costs and human capital.
• Reimbursements and new costs for practices.

I want to explore what’s happening in our industry. I’ll explain the economic headwinds you might already be feeling and share a practical solution that hundreds of practices use to maintain profitability in this challenging climate.

The impact of tariffs on dental practices for 2025

In early 2025, newly enacted federal policies introduced a series of tariff increases that are already affecting the dental industry in multiple ways. However, one thing that has caught the attention of many (especially on the economic side) is tariffs.

Tariffs, which are taxes applied to imported goods, have significantly increased the cost of essential materials and equipment used in dental practices. As a result, many offices are now facing:

• Higher costs for importing dental tools and equipment
• Upward pricing pressure on certain patient procedures
• Limited availability of specific medical-grade supplies used in treatment
• Reduced margins and the potential for lower take-home earnings throughout the year

An executive order will establish a 10% baseline tax on imports from all countries by the first days of April 2025, with the potential to increase depending on the country from which these goods are imported. Considering this scenario, the American Dental Association (ADA) urges medical and dental supplies to be exempt from tariffs.

As a consequence, in addition to the problems in import costs and changes in the prices that our patients have to pay (who are also the main ones affected by these measures), dental practices in the United States will face other problems:

• This could impede the improvement of treatment outcomes.
• The impossibility of fostering innovation in the short term.
• Meeting the growing needs of patient populations.  

Institutions such as the Dental Trade Alliance (DTA), the American Dental Association (ADA), and the National Association of Dental Laboratories (NADL), in an open letter to President Donald Trump, clearly support the U.S. economy's growth policies. However, they warn in this document that tariffs can only “jeopardize the availability of key dental and other medical devices.”

These entities have some products that must be used by dental practices, affecting business and, respectively, profits. These include raw materials, tools, and equipment used in dental practices because they are subject to the existing China Section 301 duties. The imposed percentage of duties on Chinese-origin merchandise impacts how dental health care is practiced in the country.

The cost of doing dentistry is going up

1. Supplies and materials: new tariffs, new challenges

One of the biggest concerns for dental practices in 2025 is federal policies regarding imported products. Even in the face of imported goods from China or any other exporting country, there will be an impact on a business's cost of services. This can impact revenue.

Let’s get into numbers. Some key drivers:

• The United States Trade Representative reinstated Section 301 medical and dental equipment tariffs in 2024. Compared to the import tariffs already in place last year, which ranged from 7.5% to 25%, the current scenario worsens import costs.
• Lab costs are being hit with international shipping delays and higher duties, which are impacted by trade laws. ADA has expressed opposition to this situation. It joins a coalition opposing widespread tariffs on dental products, ranging from 10 to 25% tariffs from Mexico and Canada, with a potential increase from other countries or a policy change.

These increases are often passed directly to the practice and add up quickly, especially for offices that rely heavily on restorative or cosmetic procedures. While dental practices initially cover the cost of importing products, the patient suffers the impact of these fees. As a result, this type of measure can only hurt dental practices' profits.

2. Labor costs are ballooning

The American Dental Association's 2025 Economic Outlook Survey shows that the average compensation for dental front office staff has increased by 16%. Hygienists and dental assistants command higher salaries and more flexible schedules, forcing owners to match demands to retain their core teams.

Highlights from ADA and DentalPost.net:

• 30% of dental team members are considering changing jobs this year.
• Dental office managers now make an average of $73,670 and $92,598, up from $62,000 just two years ago.
• Over 89% of practices offer employment benefits (up from 70% in 2022), including PTO and healthcare.
• Yet, the added compensation isn’t translating to retention. DentalPost said job satisfaction related to pay declined to 17.85% in 2024.

Although it looks like isolated data, it shows discomfort symptoms in the current state of the dental industry in the United States. The cost of hiring and retaining front desk teams is very high, coupled with the expected high fees.

Labor costs are among the leading expenses that office managers and dental specialists face. To alleviate the costs of a dental practice, an alternative can be considered. Reach offers an alternative: Virtual Assistants. They can complement your front desk team and streamline processes, improving dental practice efficiency while paying less.

3. Insurance reimbursements are stagnating

While costs continue to rise, the revenue side of the equation remains stubbornly static. Most major insurers have flat or slightly reduced reimbursement rates for specific high-cost procedures. 

This mismatch creates a widening gap: higher expenses, but no increase in income. For the average U.S. dental practice operating on already slim margins, that’s a recipe for financial strain. ADA has some data since 2022, considering the issues that the dental industry has been facing for years:

• Most of the roughly 1,200 practicing dentists claimed price increases across all expense categories, including supplies, staff wages, and lab fees. 
• 31% of dentists indicated that protective equipment prices have increased by more than 20%. 
• 26% of dentists indicated that supplies and materials prices increased by at least 20% from 2022.
• According to the August poll results, nearly 60% of dentists responded that rates have remained stagnant. 25% claim their rates have decreased, and only 7% reported getting an increase in insurance reimbursement since 2021.

How does it affect the bottom line?

Economic pressure from multiple angles compresses margins even for practices with substantial patient volume.

Why does this matter? Because many practices have already cut down on what they can. They streamlined supply orders, renegotiated lab fees, and reduced marketing budgets. However, without a significant rise in reimbursement rates or patient volume, the margin squeeze leads to a more serious issue: financial bottlenecks that affect everything from payroll to growth plans.

• According to PwC, it projected an 8% year-on-year medical cost trend in 2025 for the Group market and 7.5% for the Individual market, driven by inflationary pressure, prescription drug spending, and behavioral health utilization.
• According to Planet DDS's 2025 Dental Industry Outlook, many hiring companies are particular about their requirements. The majority want candidates to be local, not remote. However, a lack of innovation and adaptability to new hiring scenarios in dental practices can affect the performance of your dental practice. Our value proposition starts from here.

This scenario forces practice owners to make difficult decisions. Do they reduce hours? Delay technology investments? Postpone hiring? These short-term trade-offs can impact long-term competitiveness and patient satisfaction.

In many cases, the practices that survive and thrive are the ones that make smarter, not harder, financial decisions. That begins with identifying where inefficiencies are quietly eating away at profitability.

The hidden cost of inefficiency

The problems generated by tariffs only add to the dental industry's administrative and economic management issues. Inefficiency is often invisible. It doesn't appear as a line item but drains your resources daily. And in 2025, that hidden cost will be more expensive than ever.

Let’s break it down:

• Missed calls: 32% of inbound calls to dental offices remain unanswered during business hours. For many practices, these aren't just missed calls; they're missed new patient opportunities.
• Overdue patients: Several dental patients are overdue for appointments. Most of these patients are not being followed up with regularly. Why? Because front desk teams are already overwhelmed with incoming calls, walk-ins, check-ins, and insurance verification.
• Insurance delays: Contacting insurance companies to verify data can be time-consuming and create several management and payment processing problems. A lack of real-time insurance verification and follow-ups on claims can stretch receivables beyond 45 or even 60 days. That bottleneck adds pressure to cash flow and delays reinvestment into the business.

Every day, your team reacts instead of planning. Some of your patients leave without scheduling, and voicemails go unanswered. And in today’s economic environment, with tariffs on the horizon, practices simply can’t afford to let that inefficiency continue.

The good news is that solving these problems doesn’t require doubling your payroll or working longer hours. It just needs a more innovative approach to staffing and delegation.

The solution: more innovative staffing through Virtual Assistants

Where can you save if you can't raise fees, reduce supply, or insurance costs? The answer is Virtual Assistants.

Virtual Assistants have become one of the most effective strategies for addressing inefficiency and protecting margins. At Reach, we provide full-time and part-time Virtual Assistants who integrate seamlessly into your practice, working exclusively for your office and supporting your front desk like in-house employees.

Our Virtual Assistants are prepared for dental workflows, are HIPAA-compliant, and are selected through a rigorous hiring process to ensure an operational fit. They provide consistent, high-quality support in areas where most practices are stretched thin:

• Phone calls and patient recalls.
• Insurance verification.
• Appointment scheduling.
• Billing follow-ups.

What makes them truly powerful is their flexibility. They adjust to your practice’s schedule and systems, ensuring continuity and professionalism with every patient interaction.

Cost comparison (real data)

An average front desk salary impacts your bottom line. We at Reach offer alternatives for your ROI. They work as follows:

• $3,840/month (including wages, taxes, PTO, and benefits)
• $1,950/month (Reach Virtual Assistant for a full-time mode).

That’s a savings of nearly $2,000 per month per team member, without sacrificing quality.

The return on investment (ROI) isn’t just theoretical, as our Virtual Assistant starts recovering missed revenue and freeing up in-office staff to focus on higher-value tasks like treatment acceptance and patient engagement.

Virtual Assistants are not a luxury anymore. In 2025, they are a strategic necessity for practices that want to grow without adding overhead.

Final thoughts

As 2025 progresses, dental practices face an increasingly complex financial environment. Operational inefficiencies such as missed phone calls, overdue patient follow-ups, and unscheduled treatments already cost practices hundreds of thousands of dollars in lost revenue annually. These internal challenges are now further intensified by growing external financial pressures.

Employee wages, benefits, rent, potential tariffs, and supply costs continue to rise at a rate that exceeds revenue growth. At the same time, most dental insurance reimbursement rates remain flat or are even declining in specific categories. This widening gap between increasing expenses and stagnant income forces practice owners to scrutinize every aspect of their operations more closely than ever.

Operational efficiency is no longer optional. It has become a financial imperative. Practices that fail to confront these hidden costs risk falling even further behind in an increasingly competitive market. Whether through optimizing workflows, improving scheduling processes, or strengthening financial management, reducing operational waste must be a top priority for any dental practice seeking long-term sustainability and profitability in the years ahead.

Reach, an alternative for dental practices to rising prices

Our goal at Reach is to offer dental practices an innovative alternative. We provide a virtual remote assistance service. There are creative ways to navigate your challenges for 2025, such as integrating a Virtual Assistant.

A change in your company's structure can help you master the economic adversity that lies ahead in 2025, with tariffs and the changing dental industry. Rethinking how your team operates can improve margins, reduce stress, and build a more resilient business.

Let’s not wait for insurance companies to catch up. Let’s outsmart the overhead curve together.

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Despite the economic squeeze, we'll show you how practices like yours thrive in 2025.

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