BMS Professional & Financial Services Director, Phil Murphy, discusses how significant data protection is to the healthcare industry:
Healthcare providers face rising costs and pressures from politicians to cut budgets, while at the same time they are waking up to the significant cost a data breach can have on their business and reputation.
The healthcare industry currently collects and stores massive amounts of private data, from a wide range of individuals, including credit card numbers and social security numbers. This can include details belonging to government officials, politicians and celebrities. This data is easily lost or stolen by individuals seeking to gain financial advancement through the use of this data. This means the healthcare industry now sees this as an additional exposure that needs to be considered when looking at an insurance programme.
It is very much a growing problem. After a few high-profile incidents of breaches publicised in the media and the resultant cost of those profile breaches to the healthcare industry – has had a massive impact on bottom line revenues.
Hospitals are places where data is often at risk. The physicians within the hospital systems generally use laptops or handheld data palm readers which store a lot of data. They are very easy to lose, and sadly with the laws in the US, once you have lost something like this, you have to then involve the regulators and everyone else in making sure that the data breaches are communicated to the public and that credit monitoring and various steps are put in place to ensure that the data is protected and that affected individuals are recompensed for it.
With the HITECH law that has just been introduced, there are very severe regulatory sanctions and penalties that can be imposed for loss of data. They can fine you up to $25,000 per patient record, plus an additional $100 per day for every individual affected that it goes unreported.
On top of that, there is the reputational risk and harm that you can do to your own goodwill by the loss of data. The attendant crisis management costs associated with that can be quite staggering.
Overall, the need for the insurance industry to offer protection to the healthcare industry in case of a data breach or loss has never been more prominent and it takes the right kind of broker to provide tailored products that will amply cover all areas of potential loss.
Click here to access the full BMS Intangible Asset Protection site and Phil Murphy’s Video discussing Data Protection & the Healthcare Industry.