The Cost of a Security Breach for Healthcare

May 9th, 2023 | Cyber Threats, Cybersecurity, Healthcare

You know who loves sensitive patient data? Cybercriminals. And unfortunately, healthcare businesses are like their favorite store to shoplift from. Because Healthcare businesses possess sensitive patient data, it makes them a prime target. Regulatory fines on top of direct repair costs make, security breaches especially damaging to healthcare businesses. In this blog, we will discuss the potential costs of a security breach for a healthcare business, as well as steps that can be taken to reduce the risk of such a breach occurring. 

The Cost of a Security Breach for a Healthcare Business 

The cost of a security breach for a healthcare business can be broken down into direct and indirect costs.  

Direct costs  

Direct costs are the expenses that are immediately incurred in response to a specific event or activity. In the case of a security breach, direct costs refer to the financial expenses associated with responding to and mitigating the breach. These costs can include a variety of expenses, such as forensic investigations to determine the extent of the breach, notifying affected patients, offering credit monitoring services, and taking steps to improve security measures to prevent future breaches. An often-overlooked direct cost is business downtime and disruption. How much are your daily labor and operating costs? If you’re completely down for 2 days and experience significant disruption over the next couple weeks – how much would that cost? Direct costs are a critical component of the overall cost of a security breach, as they can add up quickly and have a significant impact on a healthcare business’s financial performance.  

Indirect costs  

Indirect costs are the expenses that are not immediately associated with a specific event or activity, but instead represent the longer-term impact of the event or activity. In the case of a security breach, indirect costs can include expenses such as loss of business, damage to reputation, and loss of patient trust. These costs can be difficult to quantify and can have a significant impact on a healthcare business’s financial performance over time. For example, if patients lose trust in a healthcare business after a security breach, they may be less likely to seek care from that business in the future, leading to a loss of revenue over time.  

Mitigating the Risk of a Security Breach 

Cyber threats are evolving, and they can be devastating to a company’s reputation, bottom line, and even existence. To mitigate the risk of a security breach, use these four essential steps to protect your business from cyber-attacks.  

Step 1: Have a Plan 

Having a plan in place is the initial step towards safeguarding your business against cyber-attacks. The plan should include a comprehensive outline of the measures your company will adopt to prevent and handle any cyber-attacks that may occur. 

Step 2: Build Resilience 

Once a plan is in place, the next step towards securing your business from cyber-attacks is to establish resilience by focusing on the fundamentals of security tools. This involves incorporating basic security tools like Managed Detection and Response (MDR), E-mail threat detection, Multi-Factor Authentication (MFA), and other related tools into your security framework. 

 

Source: NIST/Cyber Framework 

Step 3: Inventory Your IT Assets 

The third crucial step towards safeguarding your business from cyber-attacks is to conduct an inventory of your IT assets before threat actors have the chance to do so. This process entails identifying all the hardware and software components present in your network and assessing their level of security to identify potential vulnerabilities. 

Step 4: Create an Incident Response Plan 

The ultimate step in securing your business from cyber-attacks is to devise and establish an initial incident response plan. This plan should lay out the actions that your business will take if a security incident occurs, including measures to contain the incident, steps to recover from it, and a clear communication plan with stakeholders. 

To see the 4 essential steps to protecting your business in more depth, take a look at | 4 Steps to Protect Your Business [BLOG] 

The cost of a security breach for a healthcare business can be significant, including direct expenses like forensics investigations and indirect costs like reputational damage and legal fees. Healthcare businesses should take steps to mitigate the risk of a breach, including conducting regular risk assessments, employee training, robust access controls, encryption and data protection, and incident response planning. By investing in cybersecurity measures, healthcare businesses can help protect their patients’ data, maintain their reputation, and avoid the significant costs of a security breach. 

Start Controlling Your Risk 

Take a look at our IT Security page to see how you can start controlling your risk today.