Ep. 254: Why Dentists Are Losing the Hiring War
It's not that dentists don't want to pay their teams more—many simply can't. In this week's episode, Jeff explores the growing gap between rising practice expenses and stagnant insurance reimbursements, and what it means for the future of dentistry.
Free Fees & Plans Analysis - https://www.mgeonline.com/fees-and-plans
The Get Out of Network Blueprint Seminar - https://www.mgeonline.com/out-of-network-blueprint
Dental Business RX Episode 251 - https://www.dentalbusinessrx.com/episodes/ep251
Dental Business RX Episode 252 - https://www.dentalbusinessrx.com/episodes/ep252
Dental Business RX Episode 253 - https://www.dentalbusinessrx.com/episodes/ep253
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Questions From This Episode
What did the ADA Health Policy Institute find about dental office wages compared to the rest of healthcare and the broader economy?
Inflation adjusted, dental office wages actually declined between 2021 and 2026, dropping from $35.23 to $34.57 an hour, while physician office wages rose slightly, all healthcare wages rose slightly, and average private sector wages overall rose too. Dental is now the only category among those compared where real wages moved backward.
If patient spending on dentistry is actually up, why is take-home income for dentists down?
Dental spending from patients is up 8 percent since 2020, but reimbursement hasn't kept pace with rising costs for equipment, supplies, and technology. Average net income for a private practice dentist fell from about $230,000 between 2015 and 2019 to $200,000 between 2020 and 2024, a 13 percent drop, while cumulative inflation over those same two periods jumped from 10 percent to 22 percent, meaning that same doctor would need to be earning roughly $281,000 today just to match their old standard of living.
What's the real reason dentists can't simply raise wages to stay competitive for staff?
A practice that's heavily locked into insurance reimbursement doesn't control its own income the way virtually every other business does. A grocery store or restaurant can raise prices the moment a supplier raises theirs, a dentist who is 70 or 80 percent contracted into insurance fees can't touch the price of the majority of the work coming through the door, no matter what inflation does to the actual cost of running the practice.
Why doesn't simply seeing more patients solve the reimbursement problem?
Higher volume can offset weak reimbursement somewhat, but it doesn't fix the underlying math, a doctor with strong new patient flow and solid case acceptance is still collecting the same suppressed fee on every procedure, just at a higher volume, which usually just means significantly longer hours for a similar or only modestly better outcome, not a genuine long-term solution.
What's the actual first step Jeff recommends before jumping straight to get out of network?
Sit down, ideally with a spouse or close friend, and genuinely envision what the practice and the life around it would actually look like without the current constraints, without immediately dismissing it as impossible. Then compare that vision honestly against the current reality and identify specifically what would have to change, since the real barrier for most doctors isn't the mechanics of leaving a plan, it's the conditioned belief that leaving isn't possible in the first place.
Episode Transcript
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When was the last time you lost out on what you thought was going to be a great hire? You interview them and think, this person's perfect, they're going to fit right in and do a great job. You make the offer, and they take a position elsewhere. Or maybe it's worse than that, you hire them, patients love them, they're performing exceptionally, and a year or so in, they take another position, and it felt like there was nothing you could do about it. This is something I've been hearing a lot more about than I did five or six years ago. To be clear, the reasons behind losing out on employees or dealing with turnover could be many. But there's one issue I've heard about repeatedly, from multiple sources both inside and outside of MGE, at least anecdotally over the past year or so, that's just been confirmed by the ADA Health Policy Institute, and it's something pretty basic and potentially fixable. That's what I want to talk about in this week's episode. We're going to explore exactly what's going on and why it's happening, along with a simple, notice I didn't say easy, fix. My name is Jeff Blumberg, and I'm your host.
So what's the actual issue? Let me paint the picture, and I think you'll catch on quickly. Earlier last year, I was talking separately with Sabri, our Deputy Chief Operating Officer, whom you've heard on the show before, and Chris Menkhaus, our Director of Practical Implementation, who's also guested on the show. They work directly with our clients. We were discussing client staffing, specifically clients having trouble filling positions, and one of the issues that came up was how much these clients were actually paying, not enough. When I hear something like that, I usually want to dig deeper, since I've heard that complaint before and often found the person was actually paying reasonably well. So they showed me the numbers, and they were right. They're not going to assert something unless they genuinely know what they're talking about, and it was genuinely interesting, several clear instances of underpaying.
I heard the same thing from a few other sources over the following months, so my radar was up on it. Then I came across an article from the ADA Health Policy Institute titled We Have a Major Dental Hygienist Shortage, and It's Unlikely to Go Away Soon. That's what I initially thought it would cover, but it actually went further than hygienists specifically. Here's what it said, quoting directly: after adjusting for inflation, the average wage for dental office staff in the United States, including dental hygienists, is actually down from a few years ago. In comparison, wages for staff working in medical offices have increased slightly, while the average wage for all private workers in the United States has increased steadily. So dental office salaries are down, medical office salaries are up, and overall average private worker wages are up, and they backed this up with real numbers.
This data covers 2021 to 2026, inflation adjusted hourly earnings in 2026 dollars for non-supervisory positions. Offices of physicians: $43.08 in 2021, $43.61 in 2026, a fifty-three cent increase, not huge, but a real increase after adjusting for inflation. All healthcare: $35.75 to $36.68, less than a dollar increase. All private employment: $31.36 to $32.02. Offices of dentists: $35.23 down to $34.57, an actual decline. So across all of these categories, dental office wages are the one that actually went down. The Health Policy Institute's stated conclusion was that jobs in dental offices are becoming relatively less attractive from a purely wages perspective compared to jobs in the rest of the healthcare system and the US economy overall.
I know talking about paying people more, especially if you're already struggling, isn't going to make me very popular, but these are simply the numbers. That said, I'd imagine there's genuinely no one out there who wouldn't want to give a deserving employee a raise. So what's actually going on here? I don't think dentists collectively decided to stop giving raises or stopped paying attention to inflation when hiring, that's not the real problem.
Here's the Health Policy Institute's actual thesis, quoting again: revenues are down as practice expenses are up. And on why wages can't rise: prices for some of the biggest cost drivers in dental offices, equipment, supplies, technology, are rising at a faster rate than reimbursement for dental care services. Read that again. Prices for the biggest cost drivers in dental offices are rising faster than reimbursement for dental care services. It continues: trends of rising prices and stagnant reimbursement rates generate margin compression, and make it difficult for dental practice owners to increase staff wages. In plain terms, dentists are making the same or less while the cost of everything else keeps climbing.
I want you to notice the specific word the Health Policy Institute used: reimbursement. If I go to the grocery store and buy food, that's not called reimbursement, it's called paying for it. Reimbursement is a term used almost exclusively in dental and medical contexts specifically for insurance payments. And I think I've said something along these lines before, because we've genuinely been talking about this since 2022. I don't say that with any satisfied smirk, because what's happening now is simply confirming what we've been saying for years. If anything, I'm frustrated, we've been pointing at the iceberg and saying, folks, start turning. Some people listened and have real success to show for it, others haven't, and are now living through exactly what we warned about, which I wouldn't wish on anyone, and the national numbers are now catching up and proving it out.
Back in episode 248, our annual State of the Industry episode, I covered a large amount of information, but I want to revisit one specific point that applies directly here, dentist income and expenses. The ADA compared two periods, 2015 to 2019 and 2020 to 2024. Average net income for a dentist in private practice was $230,000 from 2015 to 2019. From 2020 to 2024, it dropped to $200,000, a 13 percent decrease. On its own, a 13 percent pay cut is already significant, but compare it against overall expenses. Combined inflation from 2015 to 2019 was 10 percent. Combined inflation from 2020 to 2024 was 22 percent. So someone earning $230,000 with 10 percent inflation over that first five year period is now earning $200,000 against 22 percent inflation over the second five year period. Bring those numbers forward, and a doctor earning $230,000 in 2018 would need to be earning $281,000 today just to maintain the same standard of living, yet net income has actually gone down.
Why is this happening? Did dentists suddenly become bad at managing their practices, or did patients stop wanting dentistry? Not really, as a matter of fact, dental spending from patients is actually up 8 percent since 2020. So what's causing the squeeze? I won't say it accounts for all of it, but a large portion can be attributed directly to reimbursement. By survey, 60 percent of doctors said their reimbursement rates hadn't gone up at all between 2021 and 2025, they're still getting paid the same amount for a given procedure from insurance companies. Twenty-five percent reported reimbursements actually going down, and only 7 percent reported an increase, roughly the outcome you'd expect given everything else.
So essentially, you've got rising costs paired with flat or declining reimbursement, and if you're heavily in network, that reimbursement makes up a large portion of your business model, which is exactly where the money goes, and exactly why net income keeps dropping. Not to rehash it if you've listened to the podcast for a while, but the profit formula is simply income minus expenses equals profit. Income is what you actually do, the procedures you perform and get paid for, assuming you actually collect that money. You control expenses by spending less in various areas, within reason, since you can't lower the quality of what you're delivering. But when it comes to income, if you can't control what you're actually charging in the face of economic change, you're at a genuine disadvantage, effectively trapped.
Step outside your own practice for a moment and look at every other business around you, your accountant, the auto repair shop, a restaurant, the dry cleaner, the convenience store, the grocery store. Every one of them can control what they charge for their own services. If their supply costs go up, they pass that cost straight on to the consumer, instantaneously. If it costs the supermarket more to stock a head of lettuce, the consumer pays more for that head of lettuce immediately. Some businesses have even experimented with dynamic pricing, certain fast food chains tried pricing items higher during peak hours versus non-peak hours, similar to what Target reportedly tested with digital price displays, because that flexibility is simply how a business survives. But if 70 or 80 percent of your business runs on a fee you're contractually not allowed to change, you have no real control over your own income.
The usual reaction when a dentist finds themselves in this position is simply to do more. Let's break that down. You could find yourself in one of three basic scenarios. First, you're out of network entirely and running independently. Second, you're in network and running things poorly, weak new patient flow, struggling case acceptance, in which case that, combined with poor reimbursement, makes life genuinely difficult. Or third, you're actually decent at closing cases with solid case acceptance and strong new patient flow, so you're running high volume, but the reimbursement rate is still going to create financial strain, maybe not as severe as the doctor who can't get new patients or close cases, but a real problem regardless, simply from basic economics.
So the real answer is being able to control your own income, specifically your own prices. This is exactly what we've been pointing toward all along, dentistry is drifting in two clear directions. Some doctors are stuck in a position, especially with umbrella networks becoming more common now, where they simply cannot adjust their fees regardless of what's happening economically. Others are fee for service. To be clear, fee for service doesn't mean refusing insurance entirely, you can still file claims and accept assignment for patients who have it, you're simply charging your normal private fee for the work you do. If you're in that position rather than the one where your fees are locked, you have real control over your income, and you genuinely cannot volume your way out of the alternative, since that's usually the instinctive reaction. If the underlying issue is being paid so little that you're forced to work 80 hours a week, what future is actually in that? Realistically, none, long term.
Step back and look at the last five to ten years. If you're heavily dependent on insurance, look honestly at how that's actually played out. Do you think that's suddenly going to reverse, or is it more likely to keep stagnating or drifting downward over time? Maybe things feel okay right now, not great, but okay. Where will that same situation be five years from now? I would personally have a real problem being in a position where I couldn't touch my own fees, since I've genuinely had to adjust fees here at MGE myself. The average administrative position we were hiring for back in 2016, 2017, or 2018, I could bring on a starting employee, just to see if they'd work out, for $12 or $13 an hour. Today that same starting role runs $18 to $20 an hour if I actually want to hire someone, because that's simply what the market demands now. If I couldn't stay agile in that way and adjust my own income accordingly, how would I be able to control my own business?
So here's my challenge to you. I don't want this episode to turn purely into another get out of your plans pitch, I've covered that extensively, in fact I just finished a three part series on exactly how to do it, the last three episodes. But here's my actual challenge: rather than simply saying get out of your plans, I want you to take a few minutes, maybe sit down with your spouse, a significant other, or a close friend, you could do it alone too, or call us if you'd like, and genuinely envision the type of practice you'd actually want to have, and what your life would look like if you had it. Don't jump straight to that would never work. Just genuinely sit with what it would actually look like, how it should look, setting aside the reasons it supposedly can't happen for a moment.
Then compare that vision honestly against what you actually have right now, and give yourself a genuinely honest assessment of what would need to change. It's time to confront reality, however difficult or seemingly impossible it might feel, because I promise you, it isn't impossible. If that means moving your practice to fee for service, which I'd genuinely bet on for most people reading this, then that's what it means. There are plenty of specific things involved in actually doing this, our whole business model certainly isn't only about getting people out of insurance plans, but it's become an increasingly central focus over the last three to five years specifically because, economically, staying heavily dependent on these plans simply stops making sense.
If you do move toward being out of network, you need genuinely excellent customer service. You need to be able to present treatment effectively and get patients to actually accept it. You need to know how to market your business, because these plans do provide a certain sense of security, a bit of a security blanket. You're at least getting something, even if it amounts to starvation rations, it feels like something rather than nothing. If you're not going to depend on insurance companies, you have to be able to genuinely fend for yourself. It's absolutely doable, and honestly a lot easier than most people assume, because think about why people actually stay in these arrangements in the first place. It usually comes down to being convinced that without it, they'd have no patients at all. I could dismantle that specific belief in about five minutes, since I can point to plenty of doctors who are entirely out of network and have a full, thriving patient base. That's not really the point though, the real issue is that you've been conditioned to believe this is simply how it is, and that there's nothing to be done about it.
You might look at all this and think, sure Jeff, but it's just not possible for me. Fine, that's your call, but then you remain stuck in the squeeze, the margin compression the ADA specifically referenced. I don't believe that compression is going to ease up or reverse on its own. I don't see prices coming down, or insurance companies materially raising reimbursement, over the coming years. So stepping back, this isn't a pleasant situation to confront, and unpleasant things are never fun to face directly, but that doesn't change the fact that it's the actual situation. The real question is simply whether you view it as genuinely impossible, or as something worth actually changing.
If you decide it is worth changing, this isn't something worth waiting on, start the process today. I'd recommend listening to the last three episodes if you haven't already, and here's my shameless plug: we offer a free consultation called the Fees and Plans Analysis, where we walk through what's actually happening in your specific practice, gather some basic data, and give you a real sense of what it would take to transition toward fee for service. We also run a seminar with a full money back guarantee, $500, called the Get Out of Network Blueprint, that walks you through the actual process step by step. There's no shortage of ways to actually do this, the real common denominator is you, whether you're genuinely ready to take action.
You might picture it being genuinely great to take action, but picturing it isn't the same as actually doing it, and I don't see this underlying situation improving on its own. It's essentially Newton's first law of motion, the scene stays in motion, and it's getting somewhat worse every year between inflation and stagnant reimbursement. The sooner you actually take action, the sooner you start seeing real benefit. For some of you, given how deeply involved you already are in these plans, getting out may genuinely take a couple of years. The clock is already running, better to start now than to keep waiting.
I'll leave you with that, one more appeal, though probably not my last, to actually do something about this. The way out is simple, though I want to be clear, simple isn't the same as easy, and it's definitely not something you'll reach by continuing to do exactly what you've already been doing. A genuinely great future is entirely possible here. Picture looking back one day, after all the real work, and knowing you secured something that let you, your family, and your team genuinely flourish while still delivering great care, in a fee for service environment. That would be a pretty great outcome, wouldn't it? Getting there means actually taking it out of the realm of, wouldn't it be nice if, since we all do this, we imagine how great something could be, and then never actually act on it, instead getting swept back into the daily grind of just handling life as it comes, rather than making a real decision and following through on it.
So the key is taking this out of the purely theoretical and turning it into an actual plan. Start doing something. If you need guidance, we're genuinely here to help, I'll have links on the episode webpage to both the Fees and Plans Analysis and the Get Out of Network Blueprint I mentioned. You could also start simply by listening to the last three episodes, where I walked through exactly how to get out of network. But you have to start somewhere, and the one thing I genuinely wouldn't recommend is doing nothing at all. We're always here to help, you can email me directly at jeffb@mgeonline.com, and I'll have those links available on the episode webpage as well.
I know this was a slightly different kind of episode, not as much of a concrete do this now checklist, aside from the challenge I gave you to genuinely envision what you actually want. But this could be the real difference between having exactly what you want five, six, or ten years from now, or simply having more of what you already have today, which, if you're not genuinely happy with where you currently stand, probably isn't a great outcome. I hope this helps. If you'd like to learn more about MGE, you can find us online at mgeonline.com, or call us at (800) 640-1140. Folks, have a great week, and I'll see you at the next episode.