Orthodontic practices experienced a period of relative stability in production during 2025, yet many found their profitability under increasing pressure, according to the latest Orthodontic Products Levin Group Annual Practice Survey. The comprehensive survey, which analyzes practice performance and forecasts future trends, indicates that while top-line revenue remained largely flat, escalating overhead costs, persistent staffing challenges, and a reluctance to adjust fees are eroding net income for many orthodontists. Dr. Roger Levin, CEO and founder of Levin Group, emphasized that these underlying challenges, exacerbated by a volatile economic climate, demand immediate strategic adaptation from practice owners.
The 2025 Landscape: A Year of "Stability" Under Pressure
The 2025 survey data, meticulously collected in January 2026 from a nationally representative random sample of orthodontic practices, paints a picture of surface-level calm that belies deeper financial strains. Dr. Levin characterized 2025 as "the year of stability," with most key performance indicators, such as production and overhead, showing only marginal shifts of 1% to 2%. This stability, however, proved to be a double-edged sword. While it prevented significant downturns for many, it also masked a growing disconnect between gross production and net profitability.
Production Holds Steady, Profits Dwindle
Despite a slight increase in new patient flow, which might typically signal growth, many practices reported a decline in actual profit and income. The survey found that average production increased by a mere 1.1% in 2025. In contrast, overhead costs in many practices surged at a faster rate, often exceeding 4%. This disparity means that for every dollar gained in production, a larger portion was consumed by operational expenses, leading to a net reduction in the orthodontist’s take-home pay. Dr. Levin noted that orthodontic practice overhead inflation typically outpaces general economic inflation by at least 1.5%, driven by unique industry factors such as specialized technology, materials, and particularly, staffing costs. This trend, if unaddressed, could lead to a cumulative 15% income degradation over five years, significantly impacting long-term financial independence and retirement planning for practitioners.
The Lingering Staffing Crisis
A critical factor contributing to rising overhead and operational inefficiencies is the persistent staffing crisis. The survey highlighted that nearly 64% of orthodontic practices are actively seeking a team member, indicating widespread vacancies rather than merely growth-oriented hiring. This labor shortage has driven up compensation dramatically, with wages in the sector reportedly increasing by 15% to 18% over the past five years. While essential for attracting and retaining talent, these higher labor costs directly impact profitability. Dr. Levin cautioned that failing to adjust existing staff compensation when hiring new team members at higher rates could lead to internal unrest and further staff turnover, creating a "tsunami eruption" within practices. The implications extend beyond immediate financial outlays, affecting practice efficiency, patient experience, and the ability to invest in future growth.
Fee Stagnation Amid Rising Costs
Another significant finding from the survey was the minimal increase in orthodontic fees. Dr. Levin attributed this to a palpable "fear" among orthodontists to raise prices, stemming from heightened price sensitivity in the market. Unlike many other dental services, orthodontics is increasingly viewed by the public as a commodity, where treatment quality is perceived as similar across providers, making price a primary differentiator. The emergence of aggressive pricing strategies, with some practices offering treatments as low as $3,500-$4,000, and corporate entities like Aspen Dental providing aligners for $1,999, intensifies this competitive environment. This reluctance to raise fees in line with inflation and rising overhead directly contributes to the profitability squeeze, forcing practices to either absorb losses or seek higher patient volumes, which can strain resources.
Navigating a Shifting Economic Tide in 2026
The survey’s findings for 2025 serve as a crucial benchmark as the orthodontic industry enters 2026 amidst an environment of heightened economic uncertainty. Geopolitical events, fluctuating energy prices, and broader economic shifts are beginning to influence patient behavior, pricing strategies, and overall practice growth.
Economic Volatility and Consumer Behavior
Referring to insights from a former U.S. Treasury Secretary, Dr. Levin underscored that the current economic climate is characterized by more uncertainty than certainty, a trend expected to persist. Factors such as rising gas prices, even if temporary, can quickly impact household budgets and discretionary spending, including elective procedures like orthodontics. Historically, during economic downturns such as the 2007-2008 recession, orthodontic production dropped by 10-12%, with the full impact often lagging by 12 months as existing cases completed treatment. This historical context highlights the need for practices to proactively "protect" themselves against potential future economic headwinds rather than reacting after a negative event has occurred. Consumers are increasingly price-sensitive and engage in more comparison shopping, necessitating a strong value proposition from orthodontic practices.
The Rise of Competition and "Fee Wars"
Competition in the orthodontic sector is intensifying, not just from other private practices but also from Dental Support Organizations (DSOs) and Orthodontic Support Organizations (OSOs). These corporate entities often leverage collective marketing budgets and streamlined operations, posing a significant challenge to independent practices. Dr. Levin predicts an acceleration of "fee wars," where price becomes a central battleground for attracting patients. He stressed that a commodity is a product or service bought and sold at similar quality based on price. For many consumers, the perceived quality of orthodontic treatment is uniform, leading them to prioritize cost. This necessitates that orthodontists not only justify their fees but actively "sell value" in their consultations.
Strategies for Orthodontic Practice Resilience and Growth
To thrive in this evolving landscape, Dr. Levin outlined several critical strategies for orthodontic practices, emphasizing a shift from viewing a practice as a mere extension of personal life to a strategically managed business.
Building a Robust Referral Ecosystem
Referral marketing remains the single most critical factor for an orthodontic practice’s success. Dr. Levin advocated for a multi-pronged approach, encompassing five key areas: patients, parents, social media, referring general dentists, and the broader community. He highlighted the significant untapped potential in general dentist referrals, noting that $3.6 billion worth of orthodontic cases are referred annually from general practices. Many general dentists either refer out most cases or none at all, presenting a substantial opportunity for orthodontists who actively cultivate these relationships. Strong referral programs provide a consistent influx of new patients, acting as a buffer against economic fluctuations and increased competition.
Optimizing the Patient Journey: From First Call to Case Acceptance
The patient journey, particularly the initial contact and consultation, is paramount. Dr. Levin stressed the importance of tracking and converting new patient phone calls, as many practices lose opportunities before a consultation even occurs. The role of the Treatment Coordinator (TC) has evolved, requiring them to be "value coordinators" who excel at building relationships and communicating the unique benefits of the practice. With only an hour to build rapport and convince parents or patients, TCs need comprehensive sales training, moving beyond mere administrative duties to effectively convey the long-term value of orthodontic treatment. This includes offering flexible financial options and patient financing to overcome affordability barriers, especially for down payments and monthly installments.
Cultivating an Exceptional Practice Culture
Staff retention and productivity are foundational to profitability. Beyond competitive compensation, practices must cultivate an "amazing culture" that fosters loyalty and high performance. This involves regular recognition, unexpected perks (e.g., surprise lunches, gift certificates), and a genuine demonstration of care for team members. Crucially, practices need to implement robust customer service principles, akin to those found in world-class service organizations like the Ritz-Carlton or Disney. A systematized approach to "wowing every patient" creates a memorable experience, enhancing patient satisfaction and indirectly driving referrals. Efficient staff, including well-trained assistants and front desk personnel, directly contribute to the practice’s capacity and profitability. Addressing inefficiencies, such as overdue debonds which represent 100% overhead, is also vital for financial health.
Addressing Overhead and Embracing Technology
While lowering overhead is a finite process, increasing adjusted production is the primary long-term solution to rising costs. This requires practices to be highly organized and systematized, focusing on "six important things" rather than numerous smaller tasks. The strategic adoption of technology also plays a role. While modern orthodontic technology offers exciting possibilities, its cost must be carefully weighed against potential returns. Furthermore, practices must actively manage insurance reimbursements, as stagnation in these rates effectively acts as a profit reduction due to inflation.
The Evolving Landscape of Orthodontic Practice Models
The survey also touched upon the landscape of DSOs and OSOs, noting that while the number of orthodontists reporting direct affiliation remained low, their competitive influence is significant.
Corporate Consolidation and Private Practice Agility
The DSO/OSO segment continues to grow, albeit at a slightly slower pace recently due to higher interest rates impacting private equity investments. Some OSOs have faced financial challenges, leading to debt-based acquisitions and situations where retired orthodontists have returned to work due to devalued equity. However, the long-term trend points towards continued consolidation, with Dr. Levin reiterating his prediction of a 50/50 split between corporate and private practices in the future. DSOs/OSOs benefit from collective marketing and streamlined operations, posing a formidable competitive force. Private practices, however, maintain the advantage of flexibility and the ability to implement agile, patient-centric strategies to differentiate themselves.
The Measured Pace of Remote Monitoring Adoption
Remote monitoring and teledentistry are gradually gaining traction, with 30% of orthodontists reporting its use, primarily for retainer checks and emergency assessments. While promising, its widespread adoption for active treatment monitoring has been slower than anticipated. Dr. Levin attributes this to the significant upfront subscription costs and the challenge of integrating it into existing workflows. Practices must achieve a substantial volume of patients utilizing remote monitoring to offset the subscription fees. Furthermore, running distinct traditional and remote monitoring business models under one roof can create operational complexities. While it offers benefits like increased chair time for new patients, its slow "slugfest" growth mirrors the adoption curves of other dental technologies like digital radiography and intraoral cameras, which took years to become mainstream.
Conclusion: A Call for Strategic Business Acumen
As the orthodontic industry navigates the complexities of 2026 and beyond, Dr. Levin’s overarching message is clear: orthodontists must transition from viewing their practice solely as an extension of their personal life to treating it as a dynamic business requiring continuous strategic improvement. The top priorities for the coming year are a dual focus on raising fees by at least 5% annually to combat inflation, coupled with a radical enhancement of customer service to justify that value. Practices that invest in robust referral marketing, optimize the patient journey, cultivate an exceptional team culture, manage overhead effectively, and strategically adopt technology will be best positioned to thrive amidst economic uncertainty and intensifying competition, ensuring long-term financial health and professional satisfaction.
