The Strategic Imperative for Comprehensive Third-Party Risk Management
Current approaches to risk management are failing to adequately prevent or mitigate the severity of third-party data breaches.
The assumptions that healthcare businesses had about technology risk five years ago have fundamentally changed. Though third-party vendors are an essential component to a functional and successful healthcare organization, they can pose a variety of significant cybersecurity threats with steep financial implications. The first step to implementing a comprehensive third-party risk management protocol is to identify and remediate areas for improvement in organizational approaches to vendor risk management.
The Current State of Healthcare Third-Party Risk Management
Current expectations from patients and healthcare providers alike include cutting edge technological platforms and software integrated within treatment plans. Since many of those technologically advanced aspects are provided only by third-party vendors, they will need to be given access to healthcare networks to adequately render the services. Though this medical advancement has improved patient care in the past five years, it has also dramatically increased a variety of significant cybersecurity threats for healthcare businesses. On average, most large-scale businesses will work with upwards of 1,300 unique vendors, each of which have their own security measures and processes that may or may not align with a healthcare provider’s policies. In organizations like hospitals, where thousands of patients’ protected health information (PHI) is becoming increasingly digitized and connected these vulnerable third-party risk management scenarios can mean low-hanging fruit for hackers and other digital hazards.
Legacy Tools Could Hinder Workflow and Increase Liability
It is now standard to issue prospective partners a self-evaluative risk questionnaire, but the type of risk assessment a hospital business utilizes and the manner in which it is deployed can significantly impact the degree to which an organization has analyzed a potential risk. Vendor risk assessments should be thought of as the first line of defense against data breaches and should be carefully crafted to remediate holes and blindspots. Beyond the lack of questionnaire standardization that is problematic for some healthcare providers, the manner in which the data is captured and analyzed can also present a variety of complications. Due to financial and bandwidth constraints, many hospital businesses operate their vendor risk management systems using legacy tools. While technically still functional, these antiquated tools often rely on ad-hoc reporting, are time-consuming, inefficient, and expensive. Businesses that use outdated systems and processes to verify potential third-party vendors, could be exposing their organization to cyberattacks, along with financial losses and hefty levied fines as a result of HIPAA non-compliance in the case of stolen patient data.
Vendors Can Circumvent Risk Assessment Processes
In fast-paced environments like hospitals, speed and timeliness are quintessential when it comes to vetting and onboarding vendors that offer indispensable, lifesaving products or services. In some cases, the desire to take on a valuable third-party vendor and bypass lengthy assessment procedures can take precedence over protecting from cybersecurity threats, causing members of a business to circumvent processes and agree to partnerships before collecting all of the necessary information for a comprehensive risk assessment. This can result in unsecure systems and costly data breaches. It is essential to place cybersecurity at the forefront of conversations and business dealings with vendors to establish expectations before any data has the chance to become compromised.
Upholding Vendor Contractual Obligations to Cybersecurity
When entering into a working relationship, healthcare providers and third-party vendors mutually benefit from prioritizing data security as a measure to protect both businesses. What happens if a key vendor has a service outage or what if they go out of business? How will this impact an organization’s day-to-day functionality and what opportunities could these complications present to data hackers? Vendors need to provide evidence that they will not introduce risk into healthcare systems. As a result, clarity, concision, and transparency are key when it comes to creating effective contractual obligations to protect PHI and healthcare networks.
Risk Assessments Lack Continuous Monitoring Abilities
According to new information collected by Black Book Market Research LLC, 96 percent of IT professionals agree that medical enterprises are at a disadvantage when it comes to staying ahead of vulnerabilities, with data attackers far outpacing the efforts of security teams. Most standard processes dictate that once a vendor has been assessed and cleared based on their anticipated level of risk, an organization will not reexamine that particular vendor again for at least one year, if not longer. Over the course of just a few years, individual vendors might undergo major changes to the company’s technology or structure, add or lose employees, and face serious cybersecurity threats of their own. By relying on the single snapshot of a third-party vendor at one moment in time, organizations are exposed to more hazards as a vendor’s individual security posture is liable to change over time.
Vendor Risk Management Processes Are Not Automated or Repeatable
As a hospital takes on more and more third-party vendors to complete essential tasks, it becomes infeasible to assess every single vendor with the same degree of scrutiny with current processes and tools. As a result, many organizations approach the problem by stratifying vendors by their perceived level of risk, focusing most of their assessment efforts on the critical and high-risk vendors. This opens the hospital to potential threats from vendors that might be categorized as low-risk, while in actuality they might present a significant amount of risk. Additionally, the legacy tools and manual processes used in older systems rely on instances of one-to-one interactions, which are not scalable or repeatable. Shortcomings in communication concerning vendor risk posture statuses and progress can lead to strained business relationships between healthcare providers and key stakeholders. Ultimately, the lack of automated workflows and static processes are insufficient for ensuring thorough, reliable cybersecurity that is transparent for IT security teams and clinical business owners.
Identifying and Mitigating Risk for Efficient Cybersecurity Processes on Cloud-Based Platforms
It is essential for hospitals to be able to keep up with technological trends and advancements, such as the shift to more cloud-based and connected devices, to provide the best tools, education, and medical equipment to properly care for patients, all while staying ahead of evolving cybersecurity threats. According to data released by McAfee, the average healthcare organization uploads 6.8 TB of data to the cloud each month, but only 7% of cloud-based services meet industry security and compliance requirements. Traditional vendor risk management tools and strategies are simply not enough to protect the sensitive data housed on cloud-based networks and a myriad of other locations when third-party involvement is considered.
Current approaches to risk management are failing to adequately prevent or mitigate the severity of third-party data breaches. Lapses in cybersecurity can threaten the level and quality of care patients receive and compromise the integrity of a hospital business, but they can also be incredibly expensive. Download the report released by the Ponemon Institute to learn more about the hidden costs associated with third-party vendor risks facing healthcare providers.
Click here to download the “Ponemon Research Report: The Economic Impact of Third-Party Risk Management in Healthcare.”censinet.com
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