Running a dental practice in 2026 means absorbing pressure from every direction. Insurance reimbursements remain flat while costs keep climbing.
According to the ADA Health Policy Institute's Q4 2025 State of the Dental Economy report, equipment and supply expenses have risen 5% since the start of 2025, while spending on dental services has increased by just 9%, far behind overall healthcare. Non-DSO dentists most frequently cited insurance (55%), staffing (54%), and overhead costs (42%) as their top concerns heading into this year.
You can't single-handedly fix reimbursement rates or resolve the hygienist shortage. But there are real levers you can pull, and supply spending is one of the most actionable of all.
What healthy overhead actually looks like
According to ADA Health Policy Institute benchmarks compiled by Dental Practice Insider, total dental practice overhead should run 58% to 65% of gross collections. Anything above 68% signals financial strain that compounds quickly.
Break it down by category:
- Staff costs: 25% to 28% of collections
- Dental supplies: 5% to 7% of collections
- Lab fees: 6% to 8% of collections
- Rent and facility: 5% to 7% of collections
- Marketing: 2% to 4% of collections
As Dental Practice Insider's 2026 profitability guide notes, the difference between operating at 55% overhead versus 70% equals $150,000 in additional profit on a practice collecting $1 million annually.
The categories you can actually move
Not all overhead responds equally to change. Rent, loan payments, and base salaries are largely fixed. Supply costs are different.
Fragmented ordering across multiple vendors inflates costs through duplicate SKUs, rushed shipments, and administrative time. Practices that consolidate to a single trusted supplier and set consistent par levels can meaningfully reduce supply spend without changing what they buy or compromising quality.
Supply waste is also a silent budget drain. Expired composites, overstocked disposables, and duplicate products sitting on a shelf represent real dollars. A monthly inventory review goes a long way.
Habits that make a measurable difference
- Assign ownership. One person handles ordering. Shared responsibility leads to duplicate purchases and missed restocks.
- Order on a fixed cadence. Weekly or biweekly consolidated orders reduce rush shipping costs and make spend easier to track.
- Track against your benchmark. If supply spend is creeping above 7% of collections, that's your signal to audit, not just reorder.
Frequently asked questions
What is a good overhead percentage for a dental practice? According to ADA Health Policy Institute benchmarks compiled by Dental Practice Insider, total overhead should run 58% to 65% of gross collections, excluding doctor compensation. High-performing practices aim for the lower end of that range. Practices running above 68% are experiencing margin pressure that warrants a category-by-category audit.
How much should a dental practice spend on supplies? Dental supply costs should fall between 5% and 7% of gross collections. As Dental Economics notes, the ADA recommends allocating up to 6% of the prior month's collections to supplies. If you're above that range, the most common causes are fragmented vendor ordering, supply waste, and no par levels in place.
What is the easiest overhead cost to reduce in a dental practice? Supply costs are widely considered the most immediately actionable category. Dental Practice Insider's 2026 overhead guide notes that supplies and lab fees are one of the most controllable categories in a dental practice, and that consolidating vendors and improving inventory management can meaningfully reduce spend without changing what you buy or compromising quality.
How do independent dental practices compete with DSO purchasing power? Supplies and lab fees are among the most controllable overhead categories for any practice size. Working with a dental-specific supplier that offers a broad catalog, free shipping, and consistent availability closes much of the purchasing gap. Standardizing a product formulary and reducing vendor fragmentation contribute to bringing costs in line with what larger groups achieve through volume.
