Why Your Organization Must Be Concerned With Healthcare Data Security and Privacy

If you run an organization in the healthcare field, you know that healthcare data security and privacy are important, but just how important are they? What sort of consequences could you face if you suffer a security breach? This healthcare logistics company wants to make sure you’re prepared, so here are 7 reasons why your organization must be concerned with healthcare data security and privacy.

Customer Retention

Nearly half of all patients in a 2017 study said they would look for another medical provider if they found out that their medical records had been stolen. That’s a lot of lost revenue. All told, that could cost healthcare providers more than $300 billion dollars in patient lifetime revenue.

You probably spend a lot of money on initiatives to retain your patients, so don’t shoot yourself in the foot by leaving your organization open to a privacy or security breach that could scare away your customers.


A breach of privacy in your healthcare organization can get you slapped with potentially hefty fines for breaking Health Insurance Portability and Accountability Act (HIPAA) regulations. According to the American Medical Association, fines for breaches of HIPAA regulations can be as low as $100 per violation when an individual didn’t know they were breaking the law all the way up to $50,000 per violation (up to $1.5 million per year) for willful neglect. Certain violations can even include time in prison.

It is likely worth investing in a program to train all your employees about HIPAA regulations, especially new hires who may leak private information without understanding the consequences.

Data Breach Costs

Apart from fines for HIPAA violations, there are other costs with fixing a data breach. The average cost of a data breach is nearly $4 million, and the cost of lost business after a breach is estimated at more than $1.5 million.

What do the costs of a security breach go toward? Here are a few examples:

  • Notification
  • Remediation
  • Credit repair and monitoring
  • Investigations


Insurance companies have been especially hard hit by class action lawsuits after data breaches. Anthem, the second largest insurer in the United States, recently agreed to a $16 million settlement of a class action lawsuit revolving around a massive data breach in 2015 that affected almost 79 million people. Hackers accessed patients’ birth dates, names, Social Security numbers, home addresses, and more during the attack.

While lawsuits are a common part of America’s healthcare system today, there are steps you can take to reduce your risk of being sued, like spending more on your data security and privacy.

Patient Trust

More than one in five patients (21%) are so concerned about data breaches that they withhold information from their doctors, a practice that can be detrimental to their health. You should have the most advanced data security and privacy you can afford to reassure your patients or customers that their information is safe with you. Otherwise, a patient who was too afraid to disclose a certain medication they were taking could pass away after being prescribed a medication that’s contraindicated with the one they didn’t disclose.

Quality of Care

Wearable technology like a FitBit can help doctors get more information about their patients’ lifestyles, but 86% of people are concerned that this technology could make them more susceptible to security breaches. Wearable technology benefits neither the patient nor the doctor if the patient is afraid to use it due to privacy concerns. Therefore, investing in your cybersecurity can help improve the quality of care you offer patients if they don’t have to worry as much about their information being stolen.

Medical Identity Theft

One-quarter of all people affected by a healthcare security or privacy breach will become victims of medical identity theft, with the resulting out of pocket costs to the roughly 4 million people affected totaling nearly $56 billion dollars over the next five years. Billing is complicated enough when you’re sending bills to the right patients – don’t risk making billing worse by doing things that can lead to medical identity theft.

As you can see, you shouldn’t just care about healthcare data security and privacy because you’re “supposed to” – there are a variety of real and serious implications that could threaten your organization if you have any breaches. Are you prepared to ward off any attacks on your organization’s data security and privacy? Are you sure?

Melissa Thompson
Melissa Thompson writes about a wide range of topics, revealing interesting things we didn't know before. She is a freelance USA Today producer, and a Technorati contributor.