Your Price List Was Set Once. Your Costs Were Not.
The Billable Hour | Issue 3 | The economics of a one-owner firm
The average general dentist in private practice billed $965,660 in gross production in 2025. Average net income for the same dentist: $215,320. Both numbers come from the ADA’s own Survey of Dental Practice, and the distance between them is the subject of this issue.
The first subtraction
Write-offs for participating PPO providers average 30 to 40 percent of gross production (ADA Dental Fees Survey). A crown posted at $1,200 collects $720 to $840. The owner set the posted fee once, at credentialing. The payer has been setting the collected one ever since.
That arrangement is aging badly. Dental equipment and supply prices rose 5 percent through 2025 while reimbursement rates failed to keep up (ADA Health Policy Institute, Q4 2025). The ADA calls it the fiscal squeeze. Insurance is now the most cited concern among private-practice owners, named by 55 percent, and a third of the profession says it intends to drop at least one network. Legislatures noticed before most owners did: 37 dental insurance reform laws passed across 18 states in 2025, the largest single-year shift since the PPO model became dominant.
So the $965,660 becomes something near $600,000 to $680,000 in collections, and the terms were set by the other side of the contract.
The second subtraction
Overhead takes 60 to 65 percent of collections at a solo general practice, staff wages the largest line at 25 to 30 percent (ADA HPI and Dental Economics benchmark data). Rent, lab, supplies, and payroll do not adjust downward when a payer downcodes a claim or a patient’s history runs an appointment twenty minutes long. The practice absorbs those events at full cost and collects them at contract rates.
Run both subtractions and the ADA’s $215,320 is what remains. Twenty-two cents on the produced dollar.
The number still missing
Neither ADA figure has a denominator. Divide the $215,320 by the owner’s clinical hours and the result is contribution per owner hour: what an hour of the owner’s own time actually earned, after collection, after cost.
That number is invisible in the practice software and it is the only one that can rank the schedule. Two crowns with the same code, one in network at $780 and one out of network at $1,100, occupy identical lines on the production report and identical chair time. Per owner hour they are different procedures. A full book of the first can pay less than a lighter book of the second, and the production report will score the fuller book higher.
Where the owner runs hygienists or multiple operatories, the constrained resource can shift to chair hour or operatory day, and the same division runs on that denominator instead. Finding the binding one is the work.
The guardrail zone
Somewhere in every payer mix there is a line between a plan whose volume covers its own cost to serve and a plan whose adjustment exceeds the overhead its patients generate. A third of the profession intends to act on that line this year. Which network, and at what volume risk, is a threshold question, and thresholds are set from reconciled numbers, not from memory. This issue names the zone and stops.
The finding
A dental practice has never billed an hour. The production report is a fee total, silent on the owner hours underneath it, and everything the owner is paid from happens two subtractions and one division after the number it displays.
The fee schedule is memorized. The margin isn’t.
This is a general structural observation about the economics of owner-operated dental practices. It is not legal advice and not the practice of law. It is not accounting advice and not a substitute for the practice’s accountant. The figures are national averages and published benchmarks, stated as ranges where the source provides them, and drawn from no identifiable practice.
Sources: ADA Health Policy Institute, Survey of Dental Practice, 2025 (gross billings and net income). ADA Survey of Dental Fees (PPO write-off range). ADA Health Policy Institute, Q4 2025 State of the U.S. Dental Economy (reimbursement trends, owner concerns, network intentions). ADA News, January 2026 (2025 insurance reform legislation). ADA HPI and Dental Economics overhead benchmarks.