A new report from the American Dental Association’s Health Policy Institute suggests that while dentists are becoming more optimistic about the economy, the financial pressures facing dental practices have not eased.
The State of the U.S. Dental Economy – Q2 2026 report found that reimbursement rates continue to lag behind both inflation and rising practice costs.
Confidence in sector remains strong
However, dentists are busier, consumer dental spending is up by 1% over the last 12 months, and dentists reported increased confidence in their own practices, the dental care sector and the U.S. economy. Confidence in the dental care sector rose to 50.2%.
The top five reasons for confidence are:
1. Dentistry is always needed (39.6%)
2. Strong demand, practice busyness (22.6%)
3. Positive economic outlook in general (17.0%)
4. Patient demand exceeds supply of dentists in the area (8.0%)
5. Patient awareness/value of oral health (8.0%)
In contrast, only 25.2% of dentists were skeptical about the dental care sector.
Inflation
Since January 2021, prices for dental equipment and supplies and staff wages have each increased approximately 23%, while average reimbursement across all payer types has increased only 19%. Overall inflation during that period reached 27%. The report concludes that the “fiscal squeeze” on dental practices continues.
Low reimbursement, insurance pressures
Those findings mirror concerns TDMR has heard repeatedly from Texas Medicaid providers. While the ADA report is national in scope and does not specifically examine Medicaid, dentists identified low reimbursement and insurance pressures as their number one concern about the future of the profession, ahead of rising costs and the broader economy.
AI use growing
The survey also found that artificial intelligence is gaining traction in dental offices, particularly for administrative functions such as insurance verification, charting, billing, and claims submission. Dentists remain far more cautious about using AI to make treatment recommendations, emphasizing that clinical judgment should remain in the hands of the practitioner.
For Texas Medicaid providers, the report reinforces a familiar theme: despite steady patient demand, the economic challenges of delivering care continue to intensify as reimbursement struggles to keep pace with the cost of operating a modern dental practice.
Here is a copy of the report.