Is Dental Insurance the DoorDash of Dentistry? What PPOs Really Cost Your Practice
Walk into almost any restaurant today and there is another dining room you cannot see. It lives inside smartphones. DoorDash and Uber Eats bring restaurants customers who may never walk through the front door. In exchange, restaurants surrender part of the economics of the meal and some control over the customer relationship. Dentistry has been living with a remarkably similar model for decades.
A dental PPO aggregates patients and directs them toward a network of participating dentists. The dentist receives access to that population in exchange for accepting a contracted fee schedule and the rules governing participation. A restaurant effectively says, “I will surrender some margin because your platform brings me customers.” A PPO dentist makes a similar calculation. “I will accept your allowable fees because your network brings me patients.”
The analogy is not perfect. Dental insurance is far more complicated than food delivery, and patients receive real financial benefits from dental plans. But looking at PPOs through the lens of the restaurant delivery business exposes something important about the economics of modern dental practice. The question is not whether PPOs are good or bad. The question is whether the patients they deliver are worth what the practice gives up to get them.
The Price of Access
Third party delivery exploded during the past decade because it solved a genuine consumer problem. People wanted restaurant food without going to the restaurant. Delivery platforms aggregated enormous numbers of consumers and made ordering almost frictionless. Restaurants gained access to those customers, but access came at a price. Delivery fees and commissions can consume a meaningful portion of an order, while restaurants still bear the costs of food, labor, rent, utilities, credit card processing, and operations.
Those costs matter because restaurants have little margin to begin with. According to the National Restaurant Association, before the pandemic a typical restaurant might spend roughly 33 cents of every sales dollar on food and another 33 cents on labor. Other expenses consumed approximately another 29 cents, leaving only about 5 cents in pretax profit.
Since 2019, restaurant economics have become even harder. The Association estimates that average restaurant expenses increased approximately 36 percent between 2019 and 2026. Restaurant employee hourly earnings increased 41 percent, wholesale food prices rose 35 percent, and numerous other operating expenses climbed as well. Forty two percent of restaurant operators reported that their businesses were not profitable in 2025.
DoorDash did not cause those problems. Neither did Uber Eats. But when margins are already thin, surrendering additional economics to an intermediary becomes increasingly painful. Dentists should recognize the landscape.
Dental practices have faced rising wages, hygiene shortages, supplies, equipment, technology, rent, financing, credit card fees, and other overhead. At the same time, the ADA reports continuing concern among dentists that reimbursement has not kept pace with inflation and practice expenses. A PPO may still bring enormous value to a practice. But that value is not free.
The PPO Is More Than a Fee Schedule
The ADA defines a PPO as a network in which participating dentists contract to provide services according to agreed terms and generally accept the plan’s maximum allowable fees. That makes PPO dentistry particularly comparable with delivery platforms. Both aggregate customers and use their networks to steer demand toward participating businesses. But dentists frequently underestimate the full cost of that relationship.
Suppose your normal fee for a procedure is $1,000 and your PPO allows $700. The obvious difference is the $300 contractual adjustment. Yet the economic cost of participation does not stop there. Someone in your office verifies eligibility and benefits. Someone submits the claim. Someone attaches radiographs or narratives. Someone monitors unpaid claims, interprets explanations of benefits, posts payments, investigates underpayments, appeals denials, answers patient questions, collects balances, and reconciles accounts. That labor costs money.
The ADA has devoted an Administrative Efficiencies Initiative specifically to reducing these burdens through electronic eligibility verification, electronic claims, electronic funds transfer, standardized explanations of benefits, and other improvements. The existence of these efforts underscores an important reality. Insurance administration is overhead.
Even getting paid can carry another cost. The ADA warns that some virtual credit card payment arrangements can impose transaction costs of approximately 2 to 5 percent. Some contracts contain recoupment provisions, automatic renewals, affiliated carrier provisions, network leasing arrangements, patient steering provisions, or requirements to comply with provider manuals that may change over time. A PPO contract is therefore not simply a price list. It is an operating agreement that can influence your fees, cash flow, administrative workload, collection risk, patient flow, and ultimately profitability.
Who Has the Bargaining Power?
This becomes more important as intermediaries grow. The ADA recently cited a Government Accountability Office analysis showing that the three largest stand alone dental insurers represented between 38 percent and 97 percent of the group dental insurance market depending on the state. In 11 states, the three largest insurers represented at least 80 percent.
Market concentration alone does not prove misconduct or anticompetitive behavior. Large networks can create genuine efficiencies for employers, patients, and dental practices. But concentration changes bargaining power.
An individual dentist may theoretically be free to reject an unfavorable PPO contract. Economically, that decision becomes harder when the insurer represents a substantial portion of employers and patients in the dentist’s community. Restaurants face a similar dilemma. Once consumers begin opening a delivery app before deciding where to eat, restaurants are no longer evaluating only a delivery service. They are evaluating access to a marketplace. Dentists should think about PPO networks the same way.
Capacity Changes Everything
Here is where the usual dental insurance debate goes wrong. Imagine that your usual fee for a crown is $1,000 and a PPO allows $700. It is tempting to conclude that the PPO cost you $300. Not necessarily. If the operatory would otherwise have been empty, the relevant comparison may be closer to $700 versus zero, less the variable clinical and administrative costs associated with treating that patient. A lower fee can still generate attractive incremental profit when unused capacity exists. Now change one fact. Your practice is operating near capacity, and that same chair hour could have been occupied by a patient willing to pay $1,000. The economics are completely different.
Restaurants understand this intuitively. A kitchen sitting idle at 3 p.m. may happily prepare a lower margin delivery order because employees and equipment are already there. At 7 p.m., when the kitchen is overwhelmed and every table is full, replacing a higher margin direct customer with a lower margin delivery order may make little economic sense.
Dentistry works the same way. An empty chair is perishable inventory. Once Tuesday at 10 a.m. passes, you can never sell that hour again. That means a PPO that is highly valuable to a young practice with open chairs may become considerably less attractive to a mature practice operating near capacity. The contract did not change. The economics of the practice did.
Stop Asking Whether You Should Drop Insurance
This is why the industry’s favorite question, “Should I drop PPOs?” is the wrong question. There is no universal answer. The correct unit of analysis is the individual payer inside the individual practice. For each PPO, determine how much revenue it produces, its effective contractual write offs, collections, administrative burden, payment costs, new patients generated, hygiene utilization, restorative treatment generated, cancellations, retention, and contribution margin per clinical hour. Then ask the question that matters most. What would happen to those patients and those chair hours if you left the network? That last variable is critical.
If most of those patients would remain with your practice and pay out of network, the PPO may have considerably less economic value than you assumed. If most would leave and your chairs would sit empty, the network may be creating enormous value despite reimbursement rates you dislike. The weakest PPO is therefore not necessarily the one with the lowest fee schedule. It is the one producing the poorest economic return after considering reimbursement, administrative expense, patient acquisition, retention, capacity, and opportunity cost.
Dental Insurance Is Not DoorDash
There is an important limit to the analogy. DoorDash primarily provides a marketplace, ordering system, logistics, and convenience. Dental benefits perform additional functions. Employers may purchase coverage for employees. Insurers may assume financial risk. Third party administrators may administer self funded plans without bearing that risk. Plans process claims, establish benefits, negotiate networks, and reduce patients’ out of pocket expenses. The company whose logo appears on a patient’s insurance card may therefore be an insurer, an administrator, a network operator, or some combination of these roles.
Nor should dentists assume that every dollar an insurance plan does not pay becomes insurer profit. In a self funded employer plan, the employer may ultimately bear the cost of claims while an insurer or third party administrator merely administers the plan. Those distinctions matter because a useful analogy becomes propaganda when its limitations are ignored.
Still, the underlying economic structure remains strikingly similar. Both systems place an intermediary between the consumer and the business. Both aggregate demand. Both can steer customers. Both impose rules for participating in their networks. Both can become increasingly difficult for individual businesses to walk away from as their market penetration grows. And both can be extraordinarily valuable.
Measure the Value, Not the Frustration
Dentists understandably become frustrated when reimbursement falls behind expenses, claims are denied, staff members spend hours resolving insurance problems, or contracts contain provisions they did not fully appreciate when they signed them. But frustration is not a financial metric. The insurer has an economic incentive to operate its business successfully. The dentist has exactly the same responsibility. That means the smartest response is not automatically dropping insurance, nor is it blindly remaining in every network. It is measuring each relationship.
Your practice management system should tell you more than gross production by PPO. You should understand the contribution margin generated by each payer and, ideally, by clinical hour. Review the procedures that represent most of your production. Examine contractual adjustments. Measure collections. Estimate administrative costs. Understand your contracts. Determine how full your schedule actually is. Then identify which plans deserve negotiation, which remain valuable, and which may no longer make economic sense.
The ADA itself encourages dentists to periodically review payer contracts, analyze reimbursement and write offs, negotiate when appropriate, and consider terminating participation when a plan no longer meets the practice’s financial and operational needs. That is business management, not insurance bashing.
The restaurant owner looking at a delivery order and the dentist looking at a PPO patient ultimately face the same question. An intermediary has delivered a customer to the door. The intermediary wants something in return. The number that matters is not simply how much the intermediary takes. It is how much profitable business would disappear if the intermediary disappeared.
So, do you know which PPOs are actually making your practice money?
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