Cybersecurity is a constant, serious threat to the healthcare industry. Unfortunately, however, the risks to cybersecurity and data security in healthcare are only one part of the larger risk management puzzle for healthcare organizations. Infections, alarm fatigue, telemedicine, and a lack of emergency preparedness also pose severe threats in healthcare.

To minimize exposure, healthcare organizations require a comprehensive risk management program. With risk management initiatives, organizations can:

  • Identify and address existing and emerging risks;
  • Meet business objectives and strategic goals;
  • Maintain legal and regulatory compliance;
  • Lower the chances of debilitating losses while enhancing their ability to deliver quality care.

Read on to explore the key risks affecting the healthcare industry and some risk management strategies they can leverage to avoid undue risk exposure.

The 5 Critical Risks in the Healthcare Industry

Healthcare organizations are constantly tested by risks that affect their ability to achieve business objectives. Changes to the Affordable Care Act and the Health Insurance Portability and Accountability Act (HIPAA), for example (plus other healthcare reforms), all add pressure and make the future even more uncertain.

If these risks are not appropriately managed and mitigated, they can result in many unwanted outcomes, including:

  • Financial losses;
  • Fines and penalties;
  • Reputational damage;
  • Increase in medical malpractice suits and claims for workers’ compensation.

Let’s delve into five critical risks affecting healthcare facilities.

1. Cyber Risks

In 2020, data breaches against healthcare firms increased by 55.1 percent from 2019. According to the Department of Health and Human Services (HHS) Office for Civil Rights, nearly two healthcare data breaches were reported each day. The average cost of a breach was $7.13 million, the highest among all industries; and such incidents cost healthcare companies $6 trillion by the end of the year.

2021 was even worse. According to one cybersecurity report, breaches hit an all-time high in 2021 and exposed a record amount of patients’ protected health information (PHI). They impacted a whopping 45 million people. Worse yet, the average cost of a data breach rose to $9.41 million.

The healthcare sector is a prime target for all kinds of cybercriminals due to the vast amounts of PHI and electronic health records generated. Attackers can earn staggering profits by selling this data, since a single medical record is valued at up to $250 on the black market.

Moreover, care organizations are vulnerable to all types of cyber threats. Malware, ransomware, viruses, phishing, and credential harvesting all help attackers to disrupt healthcare operations, monetize PHI, and prevent medical staff from delivering patient care.

Such attacks may harm the organization’s business continuity, damage its reputation, and endanger patients’ lives. They may also result in lawsuits or fines due to the firm’s inability to comply with the privacy and security requirements stipulated under laws such as HIPAA.

The healthcare industry also has a high cybersecurity risk because:

  • Organizations have many connected devices that are often not patched properly;
  • Medical professionals use insecure devices to remotely access patient data, leaving the door open for bad actors;
  • Healthcare workers are often not trained on how to prevent or deal with cyberattacks;
  • Absent or inoperative security controls enable bad actors to access sensitive patient information.

Cyber Risk Management Strategies

Healthcare organizations must have a proper risk management strategy in place to boost the cybersecurity of healthcare information and avoid the costs of a cyberattack. The strategy should guide the organization’s investments in cybersecurity tools like firewalls, antimalware and antivirus, endpoint detection and response (EDR) systems, and so forth.

Cyber liability insurance can provide financial protection by transferring the risks and associated costs to the insurance provider. That said, premiums can become prohibitive if the organization fails to implement proper controls to prevent attacks. That’s why risk management and security controls are always vital.

2. Healthcare-Associated Infections

According to the Centers for Disease Control, 1 in 31 patients at a hospital facility has a healthcare-associated infection (HAI). HAIs cost hospitals $28.4 billion each year. They also cost society $12.4 billion due to early deaths and lost productivity.

The risk of HAIs is exceptionally high in healthcare organizations where any of the following factors exist:

  • Increased frequency and variety of invasive procedures;
  • Severely ill patients;
  • Overuse or improper use of antibiotics;
  • Failure to adhere to best practices for preventing HAIs.

HAI Risk Management Strategies

It’s impossible to eliminate the risk of HAIs completely. They can, however, be prevented to a large extent by assuring that all sanitation systems are operational and up-to-date.

Healthcare management should train staff on the proper use of these systems and basic infection control techniques to keep patients safe. Accountability and reporting to the appropriate healthcare authorities can also help prevent HAIs on a broader public health scale.

3. Telemedicine

According to the American Hospital Association, 76 percent of U.S. hospitals connect remotely with patients and practitioners through video and other new technologies. Remote care allows practitioners to increase the scope and reach of their care.

Telemedicine also, however, creates several risks for healthcare organizations. In addition to the risk of cyberattacks due to insecure devices, telemedicine may also result in allegations of negligence, especially if healthcare providers are not adequately trained or lack the proper experience and credentials.

Telemedicine Risk Management Strategies

Since there’s no federal clinical standard to guide how healthcare organizations deliver telemedicine, they must set their own standards and implement their own controls for telemedicine.

They must assure that all providers have the right capabilities and credentials, and follow appropriate standards of care. Healthcare professionals should also be trained on regulatory requirements for patient privacy and data security to know how to avoid non-compliance.

Another critical risk mitigation strategy is to implement a robust peer-review process, staff bylaws, and processes to adhere to the Centers for Medicare and Medicaid Services (CMS) guidelines.

4. Emergency Preparedness and Patient Safety

Pandemics and other disasters can strike an organization at any time. Healthcare organizations that are not prepared for such events cannot care for their patients; nor can they protect their staff from injury, illness, burnout, and mental health problems.

In addition, organizations may not be able to meet the requirements of the CMS Conditions of Participation. This could result in termination from the CMS program, which affects their ability to meet HIPAA requirements, protect patient privacy, and prevent fraud in the healthcare system.

Emergency Preparedness Risk Management Strategies

To avoid such adverse circumstances, all healthcare organizations must implement an emergency incident response plan based on:

  • A thorough and ongoing risk assessment;
  • Supporting policies and procedures;
  • A communication plan to coordinate with federal, state, and local health departments;
  • A training and testing program with provisions to conduct regular emergency drills.

The plan should be reviewed and updated regularly. Organizational leadership should be involved in the planning process to assure that the organization can continue to deliver care while protecting staff from being exposed to additional risks.

5. Alarm Fatigue

In healthcare settings, alarms are designed to draw the attention of professionals to a potential problem. Since they are so common, however, overwhelmed nurses and doctors experience alarm fatigue and become desensitized to these warnings.

Consequently, they often tune them out. By ignoring an alarm, however, providers may fail to respond to a situation as they should, reducing the quality of care. In some cases, alarm fatigue can be fatal.

Alarm Fatigue Risk Management Strategies

Healthcare organizations can reduce the risk of patient harm from alarm fatigue by implementing precautionary measures. One is an effective process for safe alarm management and response in high-risk areas. Other critical steps to manage this risk are:

  • Perform baseline alarm risk assessments to understand the current conditions contributing to alarm fatigue;
  • Identify the default alarm settings and the limits appropriate for each alarm-equipped medical device in each care area;
  • Identify the situations when alarm signals are not clinically necessary.

Challenges of Risk Management in Healthcare

To mitigate the critical risks explored here, healthcare organizations must adopt comprehensive risk management programs. Unfortunately, risk management can be a challenging prospect for several reasons.

As reimbursement moves away from a fee-for-service model to a value-based model, it may affect the financial performance of healthcare organizations. Moreover, higher pay-for-performance penalties may be imposed if the organization fails to provide quality care. These changes make it harder to balance risk management with quality care.

Under-reporting of errors or problems also affects risk management. A lack of data makes it harder to find solutions that can reduce the organization’s risk exposure. ON the other hand, too much data is also a challenge because it can overwhelm your analysis and hinder your decision-making to minimize losses.

Improve Risk Management with Reciprocity ZenRisk

For effective healthcare risk management, visibility, evaluations, monitoring, and automation are all crucial. ZenRisk brings all these capabilities in one comprehensive platform.

ZenRisk is an all-in-one platform for risk management, compliance, policy management, and governance. It shows the risk areas and changes in a healthcare organization so they can act fast to stay ahead of ever-evolving threats.

To see ZenRisk in action, schedule a demo.