The second quarter of 2025 delivered encouraging signs for the orthodontic industry, with fresh data revealing measured but steady gains in key performance metrics. Drawing from large national datasets, including insights from both Gage and OrthoFi, this summary outlines the financial landscape, evolving patient behavior, and opportunities for growth heading into the second half of the year.
Overall Performance Trends
According to Gage data, June 2025 marked the strongest month for orthodontic production since 2021:
- Production increased 7% year-over-year
- Collections rose 6%
- Starts climbed 5%
These gains lifted overall Q2 numbers, with production up 3%, collections just under 3%, and starts seeing modest improvement. Year-to-date, production is up nearly 4%, collections up about 3%, and starts up 2%. This is a sign of progress, although still below pre-pandemic benchmarks.
OrthoFi’s national dataset echoed these findings but emphasized that daily performance metrics paint a more tempered picture. Adjusted for more working days in 2025, starts per business day rose by approximately 2% year-over-year.
Case acceptance remains strong, surpassing 73% in June. However, the average down payment has declined, dropping from post-pandemic highs, indicating rising concerns around affordability. Delinquency rates are also climbing slowly, highlighting the ongoing economic pressure facing families.
Lead Management and Referral Trends
Patient behavior continues to reflect a mix of urgency and hesitation. Many practices report that a substantial percentage of starts are coming from patients who were previously marked as “pending.” This trend confirms the importance of consistent follow-up and strong internal lead management systems.
OrthoFi data reveals that nearly 28% of treatment starts now come from patients who initially delayed. While same-day start rates remain higher in terms of conversion efficiency, the majority of practice growth is still being driven by long-term outreach and retargeting.
Referral trends are also shifting positively. Both patient referrals and those from dental professionals are rebounding, reversing years of decline. In particular, virtual observation visits are gaining popularity, supporting the value of convenience and flexible communication.
Addressing the Discount Dilemma
Despite moderate fee increases of 2% to 4% across the industry, many practices are diluting these gains through aggressive discounting or excessive promotions.
Data suggests that offering value through customized payment plans, especially those extending beyond the treatment period, is a more sustainable way to address patient affordability. OrthoFi’s insights also show that discount-heavy plans can actually lead to higher delinquency rates and lower long-term revenue.
Another issue is that many practices are not adequately tracking in-network insurance write-offs, leading to underreported revenue impacts. Better fee benchmarking and transparency in financial reporting are crucial to protect profitability.
Stagnant Digital Treatment Adoption
Despite the advantages of digital treatment options, such as reduced in-office visits, shorter treatment durations, and higher patient satisfaction, adoption remains low. OrthoFi and Gage data suggest that only 25 to 30 percent of case starts involve digital tools like aligners, remote monitoring, or digital braces.
Several reasons for this slow uptake include:
- High upfront lab costs
- Disruption to established workflows
- Resistance to change within clinical teams
That said, practices that fully integrate digital solutions, rather than simply adding them on, tend to experience higher efficiency and improved staff satisfaction. Practices that have adapted operationally to support hybrid or remote models are also seeing increased retention, particularly among younger or more flexible team members.
New Cap on Dental School Loans
A new federal provision included in recent tax legislation places a $200,000 cap on federal dental school loans, removing access to the widely used Grad PLUS loan program. This may force future students to rely more on private lending, potentially discouraging specialty enrollment.
While some relief was provided in the form of restored eligibility for Public Service Loan Forgiveness (PSLF) for certain dental residencies, the long-term effects on orthodontic education and the talent pipeline remain unclear.
Key Strategic Recommendations for Q3
Industry data points toward several focus areas for practices looking to strengthen performance in Q3:
- Engage more adult patients. Adults are returning for treatment and represent a valuable segment for case growth.
- Audit your referral sources. Strengthen relationships with local dentists and encourage current patients to refer others.
- Avoid revenue leakage. Closely track write-offs and discounting behavior. Small errors can add up to significant losses.
- Refine your lead management. Ensure all incoming leads are followed up consistently, and staff are trained to convert inquiries effectively.
- Commit to digital. Instead of testing new tools at the margins, develop a comprehensive plan for workflow redesign when adopting digital treatment.
Conclusion
The second quarter of 2025 brought renewed optimism and measurable improvement across multiple orthodontic KPIs. Still, the road ahead demands careful attention to efficiency, financial planning, and patient behavior. As the industry continues to evolve, practices that stay agile and data-informed will be best positioned for long-term success.
Looking to improve your orthodontic practice’s performance? Leverage data and strategic insights to boost profitability and patient satisfaction. Stay tuned for future quarterly updates and best practices from Dental CPA.