Inflation or Not, It’s a Good Time for a Mid-Year Financial Checkup

Richard Huot, DDS


Depending on which economists you listen to, inflation is about to rear its ugly head like it did in the late 1970s, or it will resolve on its own once supply chains come back to normal.

Regardless of who’s right, as we reach the middle of 2021, now is the time to sit with your financial advisors and plot out your strategy for the remainder of the year, while paying attention to what you can do with your office policies to finish out the first full year since the COVID-19 outbreak.

Increasing Costs

Chances are your practice is feeling the immediate effects of inflation in terms of the costs of personal protective equipment (PPE) that you have purchased since March of 2020, when the closings of dental offices began.

Some of the supply chains for PPE have improved, but the cost of these items will likely never revert to their pre-pandemic prices. Most dentists have responded by raising fees to offset the increased cost of providing dental care.

Also, salaries of dental assistants and dental hygienists have increased throughout the country. Despite salary gains in both those job descriptions, shortages of both can be found in many areas nationwide.

The rising cost of all insurances related to running a dental office will start rising as well. Health and malpractice coverage have seen significant change, along with all business-related insurances.

Fees and Loans

If you haven’t taken a good look at your dental procedure fee schedule, now is the time to consult with your financial advisors about what type of fee increases are appropriate for your zip code, since most insurance companies base their payment schedules on the area that you practice in.

If you belong to any PPO or insurance networks, there is usually a time period that limits the frequency of dental fee increases (two years is common), so that calculation should be based on what you predict will be the overall inflation trend two years forward.

A rise in inflation could affect the commercial loan default rate, forcing many banks to raise rates. A review of your current business loans would then be in order, including “locking in” with a fixed rate loan, if you don’t have one already.

Lending rates are controlled by the Federal Reserve, which at this time has shown constraint in its policy, but it could raise rates in the very near future.

Finally, most young dentists have student loan debt upon graduation. An uptick in inflation with a corresponding rise in rates would have a significant impact on their current loans, if they have chosen to refinance the loans at a variable rate.

What’s Next?

The US economy is showing signs of recovery, as more people get vaccinated and are free to travel and enter into a different work environment than the one they left in March of 2020.

How that will impact the overall inflation rate is yet to be known. But having a plan for your dental office is a smart way to be ready for what effects it will have on your financial well-being.

Dr. Huot is the founder of Beachside Dental Consultants. He has lectured on topics such as leadership issues, transitioning to an insurance-free practice, common sense office design, proper insurance coding, financial planning, and buying and selling dental practices. His articles have been featured in Dentistry Today, ADA News, and other dental journals. He retired from the US Air Force Reserve Dental Corps after 30 years of military duty. He also served on active duty from 1982 to 1985. He was a private practice owner from 1985 to 2008 and still practices clinical dentistry. Also, he has been a member of multiple dental organizations, serving in many leadership positions, including vice president of the ADA. Dr. Huot is a Fellow in the American College of Dentists, the International College of Dentists, the Academy of General Dentistry, and the Pierre Fauchard Academy as well. He can be reached at

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