How Data Breaches Impact the Healthcare Industry as a Whole

An overview of how data breaches are taking a toll on the healthcare industry.

As with all other industries, the modern technological revolution has completely transformed the healthcare industry as we know it.  The development and use of new technology have helped to improve clinical outcomes as well as the development of treatments and the administration of care.  However, this new tech also opens up the healthcare industry to considerable cyber risk.  Because healthcare is a store of patients’ personal information, the industry is a popular target for cyber criminals.  To make matters cyber security measures and regulations have often lagged behind, leaving healthcare providers and facilities vulnerable to attack.  Here’s a look at how data breaches are taking a toll on the healthcare industry.

According to a study published in the American Journal of Managed Care, hospital data breaches accounted for approximately 30% of major security incidents recorded from 2009 and 2016.  The study also revealed that hospital breaches impacted more individuals than cyber security attacks in any other sector.

While news of a data breach always damages a business’s reputation, the impact on healthcare providers is generally more extreme.  Because patients have no choice but to trust medical professionals and make themselves vulnerable in order to receive treatment, violation of this trust draws an intense negative reaction.  Healthcare providers who are victims of data breach not only suffer ruined reputations, but they also face major (and hugely expensive) lawsuits from the patients affected by the breach.

In an attempt to ensure that healthcare providers are taking the necessary steps to protect their patients’ sensitive information, HIPPA set new regulations that required healthcare providers to identify potential security weaknesses and make the necessary system upgrades to safeguard private data.  Unfortunately, few healthcare organizations have actually complied with the standards laid out in the 2003 HIPPA Privacy Rule.  Currently, the Office of Civil Rights is aggressively seeking out and fining the organizations who are found in violation of HIPPA.  During OCR audits, healthcare organizations are checked for front and back-office compliance, log-in monitoring, malware protection, data-critical analysis, and so on.

This is a look at how data breaches are taking a toll on the healthcare industry.  Want to secure the protection that your healthcare facility needs?  Then make sure you have the right business insurance in place.  For assistance with all your commercial coverage needs, contact the team at PMC Insurance Group today.

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