What's Really Behind "We Don't Have Budget for Compliance"?
You've heard it in budget meetings. Maybe you've even said it yourself.
"We don't have budget for compliance right now."
It sounds reasonable. Practical even. You're protecting cash flow, being fiscally responsible, keeping expenses lean so you can invest in growth.
Here's what we've learned working with healthcare CEOs for nearly three decades: that sentence almost never means what it sounds like it means.
When executives tell us they don't have budget for compliance, what they're really saying is "we see this as a cost center, and we're hoping someone else can handle it." The CFO can do it, right? Or legal? Or operations?
We understand that instinct completely. When you see anything as pure expense, whether in business or personal life, you naturally look for ways to minimize it. The challenge is that compliance isn't actually an expense you can avoid. You're just choosing whether to pay for it upfront or pay ten times more later.
The Hidden Reality: You're Already Spending the Money
The reality most healthcare leaders discover too late: you're spending the money anyway. You just don't see it yet.
When a TPE (Targeted Probe and Educate) audit lands on your desk, you're hiring external consultants at premium rates to respond quickly. When you need to analyze potential Anti-Kickback Statute issues, you're engaging attorneys on short notice. When an acquisition closes without compliance due diligence, you're discovering liability that costs exponentially more than prevention would have required.
The Department of Justice recovered over $1.6 billion in healthcare fraud cases in 2024. Average False Claims Act settlements range from $1 million for smaller organizations to $40-50 million for larger ones. That's not money funding expanded services or competitive salaries. That's money you earned being returned because systems weren't in place to protect it.
In our experience, it takes ten times the resources to fix a compliance problem after it surfaces than it does to prevent it from happening. We see this pattern consistently across organizations of every size.
What Budget Resistance Actually Reveals
Let's be direct about what's happening when compliance gets positioned as "too expensive."
You're not really questioning whether compliance matters. You know it does. What you're questioning is whether it delivers enough value to justify the investment compared to other priorities competing for the same dollars.
That's a fair question. The answer lies in reframing what compliance actually protects and enables.
The Reframing Exercise That Changes Everything
Start with your annual revenue. Calculate the percentage that comes from government payers, because that's where regulatory risk concentrates. Medicare, Medicaid, TRICARE. For most healthcare organizations, that's 60-90% of total revenue.
Now ask yourself: how much of that are you willing to put at risk?
If you're a $10 million organization and 90% of your revenue comes from Medicare, that's $9 million. Are you comfortable risking even 10% of that? That's $900,000. Most executives we work with say no, they're not comfortable with that level of exposure.
And yet without proactive compliance systems, that's exactly the risk they're carrying.
The executives who've moved past budget resistance share a common realization: compliance isn't competing with growth priorities. It's enabling them. When you protect the revenue you've earned, you have more capital to invest in expansion. When you build systems that prevent problems, you create the foundation for sustainable growth.
Understanding the True Cost of Resistance
Budget resistance to compliance creates four distinct categories of costs that most executives don't recognize until they're facing them. These aren't theoretical risks. These are expenses organizations pay every year because they delayed or avoided compliance investment.
In our next post, we'll break down exactly what those four cost categories look like, with real examples from organizations we've worked with. You'll see why the question isn't whether you can afford compliance investment. The question is whether you can afford what happens without it.
You already understand that compliance matters. Now it's time to understand what resistance actually costs.