Insufficient cybersecurity puts healthcare organizations in peril

In today’s digital age, smart use of technology is necessary for healthcare organizations to manage patient data, streamline operations and deliver quality care. Along with these massive efficiency improvements comes a growing healthcare cybersecurity risk. Staffing challenges in recruiting, training and retaining cybersecurity professionals may mean threats are overlooked.   

Cybercriminals know that your organization may not be as attentive to the risks as you should be, which makes the healthcare industry a prime target for attacks. The cost of not addressing cybersecurity can be staggering, both financially and operationally. Here’s an analysis of how complacency puts healthcare organizations in peril.  

Financial impact of data breaches

1. Direct costs: Data breaches in healthcare are among the most expensive across all industries. According to IBM’s 2024 report, the global average cost of a data breach reached an all-time high of $4.88 million last year. For healthcare organizations, this figure can be even higher due to the sensitive nature of the data involved. The costs include immediate expenses such as forensic investigations, legal fees and regulatory fines applied through the Department of Health and Human Services.
2. Indirect costs: Beyond the direct financial impact, data breaches also incur significant indirect costs. These include loss of patient trust, damage to the organization’s reputation and the potential for decreased patient volumes. The Verizon 2024 DBIR highlights that breaches involving healthcare data often lead to long-term reputational damage, which can be difficult to quantify but is nonetheless substantial.
3. Operational disruptions: Cyberattacks can severely disrupt healthcare operations. Ransomware attacks, for example, can lock healthcare providers out of critical systems, delaying patient care and potentially leading to adverse health outcomes. The operational downtime and the resources required to restore systems can add to the overall cost of a breach.

Benefits of robust cybersecurity measures

1. Cost savings: Investing in cybersecurity can significantly reduce the cost of data breaches. IBM’s report indicates that organizations using security AI and automation extensively saved an average of $2.22 million per breach compared to those that did not. These savings stem from faster detection and response times, which can limit the extent of the breach and reduce recovery costs.
2. Insurance premium reductions: Healthcare organizations with robust cybersecurity measures in place can also benefit from lower insurance premiums. Cyber insurance providers often offer up to 30% discounts to organizations that demonstrate strong security practices, such as regular security audits, employee training programs, and the implementation of advanced security technologies. As an example, a $100-million revenue hospital system with $5 million in limits and poor cybersecurity hygiene, might pay between $300,000 and $350,000 in premiums and could save approximately $100,000 with strong cyber hygiene and proper governance.
3. Enhanced patient trust: Maintaining robust cybersecurity measures helps protect patient data, which is crucial for maintaining patient trust. Patients are more likely to choose and remain with healthcare providers that they believe can safeguard their personal information. This trust translates into sustained patient volumes and can positively impact the organization’s bottom line.

How Wipfli can help

Failure to adequately address cybersecurity needs may expose healthcare organizations to immeasurable risk, including direct financial losses, operational disruptions and long-term reputational damage. Contact Wipfli to learn more about how our specialized team of cybersecurity professionals can help you prioritize measures to protect patients, operations and your organization’s financial health.