Healthcare Data Breaches Will Cost $4 Billion by Year's End
According to new research, 96 percent of IT professionals agreed that data attackers are outpacing their medical enterprises, holding providers at a disadvantage in responding to vulnerabilities.
Black Book Market Research LLC surveyed over 2,876 security professionals from 733 provider organizations to identify gaps, vulnerabilities and deficiencies that persist in keeping hospitals and physicians proverbial sitting ducks for data breaches and cyberattacks. A fragmented mix of 415 vendors offering data security services, core products and solutions, software, consulting and outsourcing received user feedback including large IT companies, mid and small security vendors and start-ups in the polling period Q4 2018 to Q3 2019.
Thus far in 2019, healthcare providers continued to be the most targeted organizations for industry cybersecurity breaches with nearly 4 out of 5 breaches, whereas successful attacks on health insurers and plans maintained with more sophisticated information security solutions with little change year to year. Over half (53 percent) of all provider breaches were caused by external hacking according to respondents.
Over 93 percent of healthcare organizations have experienced a data breach since Q3 2016 and 57 percent have had more than five data breaches during the same timeframe. Not only has the number of attacks increased; more than 300 million records have been stolen since 2015, affecting about one in every 10 healthcare consumers.
According to 90 percent of hospital representatives surveyed, IT security budgets have remained level since 2016. As a percentage of IT health systems and hospital organizational budgets, cybersecurity has increased to about six percent of the total annual IT spend for CY 2020, however, physician organizations and groups report a decrease in actual cybersecurity expense allocated, with less than one percent of their IT budgets earmarked for cybersecurity in 2020.
A third of hospital executives that purchased cybersecurity solutions between 2016 and 2018 report they did so blindly without much vision or discernment. 92 percent of the data security product or service decisions since 2016 were made at the C level and failed to include any users or affected department managers in the cybersecurity purchasing decision. Only four percent of organizations had a steering committee to evaluate the impact of the cybersecurity investment.
Last year’s Black Book cybersecurity survey revealed 84 percent of hospitals were operating without a dedicated security executive. As a solution to unsuccessfully recruiting a qualified healthcare chief information security officer, 21 percent of organizations opted for security outsourcing to partners and consultants or selected security-as-a-service options as a stop-gap measure.
Additional findings include:
- 21 percent of hospitals surveyed report having a dedicated security executive, although only six percent identified that individual as a Chief Information Security Officer or CISO. Only 1.5 percent of physician groups with over ten clinicians in the practice report having a dedicated CISO.
- The estimated cost of a data breach by the respondent hospital organizations with actual breaches in 2019 averaged $423 per record.
- In a separate Q3 2019 survey of 58 health system marketing leaders with organizational breaches in the past 18 months report expending between 51k and 100k dollars of unbudgeted marketing expense to fight any negative impressions on the hospital brand cast from data breaches and theft. Still, no marketing executive surveyed reported allocating 2020 budget funds to combat the consequences of patient privacy or record breaches.
- That shortage of healthcare cybersecurity professionals increased 40 percent from last year.
- The ability of non-CISO executives in healthcare organizations is not improving either: 70 percent of IT management respondents report their operations are not aware of the full variety of cybersecurity solution sets that exist, particularly mobile security environments, intrusion detection, attack prevention, forensics and testing. Last year 57 percent reported not having a good understanding of the cybersecurity product and service landscape.
- 58 percent of hospitals did not select their current security vendor in advance of a cybersecurity incident. 94 percent have not augmented their cybersecurity protections since their last breach: 35 percent of healthcare organizations did not scan for vulnerabilities before an attack.
- 20 percent of healthcare organizations reported they felt intimidated by a vendor to retain services when the vendor identified a vulnerability or security flaw.
- 41 percent of healthcare enterprises have not formally identified specific security objectives and requirements in a strategic and tactical plan, improving from 60 percent in 2018.
- 87 percent of healthcare organizations have not had a cybersecurity drill with an incident response process, despite the skyrocketing cases of data breaches in the healthcare industry, and as of Q3 2019, 84 percent of hospitals and 65 percent of payer organizations did not have full-time cybersecurity employees.
- 27 percent of hospitals (up from 12 percent in 2018) believe that a Q3 2020 assessment of their cybersecurity will show improvement. 29 percent of hospital leaders believe their cybersecurity position will worsen and 79 percent of physician groups foresee increased cyber-attacks, as compared to four percent in other industries.
- 40 percent of providers surveyed still do not carry out measurable assessments of their cybersecurity status. Of those that did, 19 percent used an objective third-party service to benchmark their cybersecurity status, seven percent used an objective software solution to benchmark their cybersecurity status and 73 percent self-assessed with their own criteria.
- 26 percent of hospital respondents and 93 percent of physician organizations currently report they do not have an adequate solution to instantly detect and respond to an organizational attack.
- 60 percent of surveyed CIOs did not evaluate the total cost of ownership (TCO) before making a commitment to sign their current cybersecurity solution or service contract. 91 percent reported they bought their cybersecurity solution to be compliant, not necessarily to reduce risk when the IT decision was made.