The Compliance Advantage

How a Compliance Program Raises Your Valuation (with Jerry Chang)

Ross Ronan Season 6 Episode 8

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0:00 | 38:16

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Most healthcare executives treat compliance as a cost line. Jerry Chang, Managing Director and Partner at Stout, sees it differently from the valuation seat. On this episode of The Compliance Advantage, host Ross Ronan and Jerry walk through how a strong compliance program changes what a business is actually worth.

Jerry has spent about 30 years valuing hospitals, health systems, medical groups, surgery centers, and dialysis centers, and he has testified roughly 20 times as an expert witness. He breaks compliance value into three jobs a valuation does: measuring value, protecting value, and recovering value. The throughline is risk perception. When a buyer sees a weak compliance program, that perception shows up as a higher discount rate or a lower multiple, which pulls the price down.

Ross and Jerry trade real diligence stories, including a dialysis center sale where undisclosed compliance issues triggered a claim that the buyer overpaid, and a deal that nearly collapsed when an Anti-Kickback problem surfaced at the last stage. They cover fair market value and commercial reasonableness, why a 10-year-old valuation sitting in a file cabinet is a red flag, and why sell-side compliance diligence pays off before a buyer ever asks. Jerry's rule sums it up: go slow to go fast.


Jerry Chang is Managing Director and Partner at Stout, based in the firm's Atlanta office.

He has spent about 30 years in healthcare valuation and financial advisory, valuing hospitals, health systems, medical groups, surgery centers, and dialysis centers, and he has testified roughly 20 times as an expert witness in federal court, state court, and arbitration.

On this episode, Jerry shows Ross how compliance moves real numbers in a deal, from fair market value and commercial reasonableness to the diligence findings that change a multiple.

https://www.linkedin.com/in/jerrymchang/

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