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PA salary inconsistencies

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There's also market externalities, and it doesn't work the way you might think. It all has to do with leverage. Who has it?


In Milwaukee, there are a small number of health insurance carriers with relatively equal market share with the result being no dominant insurer, which should lower costs by increasing competition, right? Well, it doesn't, and because there is no dominant insurer on the landscape, physicians/practices charge more than other areas. In Chicago, there is really one dominant insurer, which forces physicians/practices to sign agreements and lower reimbursements. Additionally, Milwaukee has one dominant provider which is a vertically (but not yet horizontally) integrated network.....this allows the provider network to exert leverage over a the insurers, in contrast to what happens in Chicago..


Essentially, they pay more because they can bill more.....


A more dynamic market would consist of either


a. Multiple independent providers with multiple insurers OR


b. A vertically integrated network with a dominant insurer......


Either way, leverage has to be equal.....or if that is not possible, it would be better to err on the side of leverage with the insurers, as they have profit motivation to lower reimbursements and subsequently (at least theoretically) costs.


So, there's that hypothesis for you.

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I live in the Chicago area and have worked at a couple of the downtown hospitals (as a tech, not a PA).The Chicago numbers shown probably suffer from a small sample size. 60k seems a bit low. On the other hand, if you look at the estimates for the northern suburbs such as Lake Forest and Gurnee, 126K seems a bit high. My guess (from talking to the PAs I have worked with) is that the true number is closer to the national average of 90k.

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Can anyone tell me if the PA salary data on this website is legit? According to this site the average PA salary in the Chicago area is $59,339, whereas 90 miles to the north in Milwaukee the average salary is $90,742. What is the explanation for this?





There is something weird about the data there. Looking at the AAPA 2010 salary report its even worse.


The big issue at least in the AAPA salary survey is the 10th and 25th percentile. Its $25 and $30k which is half of what it is in the rest of the state. I don't know why this is. The other weird thing is that the Chicago wages do not carry over to the state average. I would expect Chicago to be the majority of the salaries there. If it was it would drag the rest of the state down. It doesn't. I'm guessing that the Chicago sample size is not very big and skewed by a bigger percentage either partially retired or working in semi volunteer positions.

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