If there’s one topic that consistently comes up in conversations with dentists today, it’s this:
“Insurance just isn’t what it used to be.”
That sentiment isn’t anecdotal—it’s backed by data.
While practice costs continue to rise, insurance reimbursement has not kept pace, creating increasing pressure on dental practices .
And that pressure is doing more than just affecting margins.
It’s reshaping how practices operate, how they are valued, and how transactions are structured.
The Core Problem: A Growing Gap
At a high level, the issue is simple:
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The cost of delivering care is increasing
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The amount paid for that care—especially through insurance—is not
Over time, this creates a widening gap between:
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What it costs to run a practice
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What the practice earns per procedure
That gap is one of the main drivers behind the “fiscal squeeze” we discussed last week.
Why This Is Becoming a Bigger Issue
This dynamic isn’t new—but it’s becoming more pronounced.
1. Fee Schedules Are Largely Static
Many insurance fee schedules:
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Have seen minimal increases over time
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Do not adjust meaningfully for inflation
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Vary widely between carriers
As a result:
The same procedure often generates less real income today than it did years ago.
2. Administrative Burden Is Increasing
It’s not just about reimbursement levels.
Practices are also dealing with:
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Pre-authorizations
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Claim denials and resubmissions
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Longer payment cycles
These factors increase the cost of collecting revenue, not just delivering care.
3. Patient Sensitivity to Cost Is Rising
Patients are becoming more aware of:
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Out-of-pocket expenses
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Coverage limitations
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Alternative treatment options
This can lead to:
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Lower case acceptance
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More treatment deferrals
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Pressure on treatment planning
How Dentists Are Responding
Dentists are not standing still—they’re adapting.
Recent trends show that many are:
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Dropping out of certain insurance networks
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Becoming more selective with participation
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Focusing on higher-value procedures and services
Others are:
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Investing in patient experience
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Enhancing marketing to attract better-fit patients
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Reevaluating fee structures
In short:
Practices are becoming more strategic about how they generate revenue.
How This Is Changing the Market
These shifts are having a direct impact on practice transitions.
1. Insurance Mix Matters More Than Ever
Buyers are taking a closer look at:
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PPO vs FFS composition
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Concentration within specific plans
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Fee schedule structures
A practice heavily dependent on low-reimbursing plans may face:
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Increased scrutiny
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Adjusted valuation expectations
2. Profitability Is Driving Value
Historically, collections were a primary benchmark.
Today:
Profitability and sustainability carry more weight.
Two practices with identical collections can have very different values depending on:
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Insurance participation
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Fee structures
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Cost control
3. Strategic Positioning Is Critical
Practices that have:
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Thoughtfully managed their insurance relationships
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Built a strong patient base
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Maintained pricing discipline
are often better positioned in today’s market.
What This Means for Sellers
If you’re considering selling, your insurance profile is part of your story.
Buyers will want to understand:
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Which plans you participate in
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How those plans impact revenue
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Whether there is flexibility to make changes
This doesn’t mean you need to overhaul your model before selling—but it does mean:
You should be prepared to explain it clearly.
What This Means for Buyers
For buyers, this is one of the most important areas to evaluate.
A practice’s insurance mix can:
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Limit profitability
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Create opportunity for improvement
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Affect long-term sustainability
In some cases, a practice with a challenging insurance mix may still be a great opportunity—if:
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There is a clear path to optimization
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The patient base supports adjustments
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The buyer is comfortable making strategic changes
The Bigger Insight
Insurance isn’t just a billing mechanism—it’s a strategic lever.
And in today’s market:
How a practice engages with insurance can be just as important as how many patients it sees.
Looking Ahead
Next week, we’ll build on this and explore a question many dentists are starting to ask:
> Are practices becoming less profitable—even when they’re busy?
If you’re evaluating a practice—or thinking about positioning your own for sale—understanding the role of insurance in your financial model is critical.
That’s an area where thoughtful analysis can make a significant difference.