How to Set Your Prices as a New Dental Practice
Learn how to set dental fees with a step-by-step guide, including cost analysis, market research, and insurance considerations for new practices.
Setting prices for a new dental practice is one of the most critical decisions you’ll make. Charge too much and you scare off patients; charge too little and you can’t cover costs. The goal is to find a balance that covers your expenses, attracts patients, and builds a sustainable business. This guide walks you through a concrete, data-driven approach to pricing, from calculating your costs to adjusting for your market.
Step 1: Calculate Your True Costs
Before you set any fee, you need to know what it costs to run your practice. Start by listing all monthly expenses:
- Fixed costs: rent, utilities, insurance, salaries, equipment leases, software subscriptions (e.g., practice management, imaging), and loan payments.
- Variable costs: supplies (gloves, masks, composites, impression materials), lab fees, and sterilization costs.
- Hidden costs: marketing, continuing education, and unexpected repairs.
Add these up to get your total monthly overhead. Then estimate how many patient visits you expect per month. Divide overhead by visits to get your cost per visit. For example, if your overhead is $40,000 per month and you see 200 patients, your cost per visit is $200. That’s your break-even point for each visit, before profit.
Action step: Create a simple spreadsheet listing all expenses. Use realistic numbers from your business plan or actual quotes. Update it quarterly.
Step 2: Research Your Local Market
Your fees must be competitive within your geographic area. Patients often compare prices, especially for common procedures. Here’s how to research:
- Call local practices: Ask for their fee schedule for common procedures like exams, cleanings, and fillings. Be transparent that you’re a new practice doing market research.
- Check insurance fee schedules: If you plan to accept insurance, contact major carriers (Delta Dental, Cigna, Aetna) for their allowed amounts in your region. These are often lower than your cash fees.
- Use online resources: Dental fee databases like FAIR Health or ADA’s Dental Fees Survey provide regional averages. Expect to pay $200-$500 for a report.
Typical fee ranges (2026): For a new practice in a mid-sized city, common cash fees might be:
| Procedure | Low | High |
|---|---|---|
| New patient exam | $50 | $100 |
| Adult cleaning (prophy) | $75 | $120 |
| Composite filling (one surface) | $150 | $250 |
| Crown (porcelain-fused-to-metal) | $900 | $1,400 |
| Root canal (molar) | $800 | $1,200 |
These are ballpark figures. Adjust based on your local cost of living and competition.
Step 3: Decide on Insurance and PPO Participation
Your pricing strategy depends heavily on whether you accept insurance. Here are your options:
- In-network with PPOs: You agree to contracted rates, which are typically 20%-40% lower than your cash fees. You get a larger patient pool but lower profit per procedure.
- Out-of-network: You set your own fees, but patients may have higher out-of-pocket costs. You’ll need to handle claims for patients.
- Fee-for-service (no insurance): You set your fees freely, but you must attract patients who can pay out of pocket. This often requires a strong value proposition and maybe a membership plan.
Action step: If you’re new, consider starting with one or two PPO contracts to build volume, then gradually shift to a more profitable mix. Many practices start with 50%-70% of patients on PPOs.
Step 4: Set Your Fees Using a Markup Strategy
Once you know your costs and market rates, set your fees. A common approach is to use a markup on your costs. For example, if a composite filling costs you $30 in materials and lab fees, you might charge $200, which is a 567% markup. That sounds high, but it covers your overhead per visit.
Alternatively, use the “cost-plus” method: add your desired profit margin to your cost per visit. If your cost per visit is $200 and you want a 20% profit, your average revenue per visit should be $240. Then set individual fees to achieve that average.
Action step: Create a fee schedule with columns for procedure, cost, market rate, and your proposed fee. Aim to be within 10%-15% of the market average for your area.
Step 5: Consider Value-Based Pricing for Certain Services
For elective or high-value services like teeth whitening, veneers, or implants, you can price based on perceived value rather than cost. Patients often compare these less, and they’re willing to pay for quality and convenience. For example, a single dental implant might cost you $1,500 in materials and lab fees, but you could charge $3,500-$5,000, depending on your market.
Action step: Identify 3-5 services where you can differentiate (e.g., same-day crowns, sedation dentistry) and set premium fees for those.
Step 6: Test and Adjust
Your initial fee schedule isn’t set in stone. Monitor your performance monthly:
- Track your average revenue per patient visit.
- Track your collection rate (what you actually collect vs. what you bill).
- Ask patients for feedback on pricing during exit interviews or surveys.
If you’re not hitting your break-even, consider raising fees on less price-sensitive services or reducing overhead. If you’re turning away patients due to cost, consider a discount plan or a membership model.
Action step: Set a quarterly review date to analyze your fees and adjust as needed.
FAQ
Q: Should I set my fees lower than competitors to attract patients? A: It can work short-term, but it’s risky. Lower fees mean lower profit per visit, so you need more volume to break even. Instead, consider offering a new patient special (e.g., exam and X-rays for $99) while keeping your regular fees at market rate.
Q: How do I handle patients who say my prices are too high? A: Be prepared to explain your fees. Show the value you provide, such as advanced technology, same-day service, or extended hours. Offer payment plans through third-party financing like CareCredit.
Q: What if I don’t accept insurance? A: You can still succeed, but you’ll need a strong cash-pay model. Consider offering a membership plan (e.g., $300/year for exams and cleanings) to make care predictable for patients.
Q: How often should I review my fees? A: At least annually, but ideally quarterly. Factor in inflation, new equipment costs, and changes in your market.
The Bottom Line
Setting prices for your new dental practice is a balancing act between covering costs, staying competitive, and building a patient base. Start by calculating your true costs, research local rates, decide on your insurance strategy, and set fees that reflect your value. Then test and adjust regularly. With a data-driven approach, you’ll find a pricing model that sustains your practice and supports growth.
Remember, pricing is not static. As your practice matures, you’ll refine your fees based on real data. The key is to start with a solid foundation and stay flexible.