« Cases

Determining Compensation Fair Market Value for Highly Compensated Cardiac Surgeons


A teaching hospital in a competitive suburban market


To structure and develop a compensation arrangement that would meet the needs of several highly compensated private practice cardiac surgeons as they transition into an employment arrangement with the hospital.


Veralon worked with hospital senior management and legal counsel to develop a compensation model for clinical and administrative services. The model included components for productivity, quality and program growth as well as provisions for severance.

The physicians’ productivity and compensation were both extremely high, in excess of the 90th percentile benchmark. Veralon analyzed this compensation and performance against a number of benchmarks. Veralon also assessed the additional call burden that the group was taking on under the employment arrangement.


Following rigorous analysis, and using national survey data as well as Veralon’s proprietary regional data, we provided a fair market value opinion letter that not only justified a level of compensation that met the needs of the physicians, but was received positively by management and legal counsel as well. All of the physicians signed employment agreements with the hospital.