Let’s say you went in to work today, just like any other day. However, it is not just like any other day. On this day you are asked to see your immediate supervisor concerning your employment status. Things this day are changing. You are still employed; however, your salary is being cut by 25%. That’s it. You get to keep your job but at a salary of 75% of what it was. So how would you manage this?
Do you simply accept the lower salary and try to live on it? Are you willing to change your way of living to accommodate the decreased salary?
Let’s say you want to make up for the lost salary within your job. What will you do to make up for it? Will you work overtime? In a sales position would you feel more pressure to sell? Would you over-sell or up-sell clients? Would you sell them something they may not really need? Would you pressure clients more to buy?
If you were in a manufacturing position would you try to make more product in the same amount of time? Would your quality of product decrease with the faster production?
What would you do with the decrease in salary?
This exercise you encountered is the same exercise a preferred dentist provider encounters when he/she signs a contract with a PPO, a DMO, or whatever managed dental insurance company. In these cases the dentist actually volunteers to accept a lower fee schedule that very well may decrease their fees by up to 25% or more. In exchange for the decreased fees the dentists enjoys the marketing of their practices within the employer and insurance company listings of preferred providers.
Why would a dentist do this? It may sound great for patients, but really, why would a dentist decrease their fees?
For me to do this, I would have to be experiencing a problem with the growth of my practice, I would perhaps be starting a new practice, or I am concerned about the future growth of my practice. You in some way considered what you would do if you experienced a 25% salary cut. What do dentists do as a result of their fees being cut by up to 25% or more, as a preferred provider?