Healthcare Continues to be the Most Expensive Industry for Data Breaches

According to the IBM report, which studied over 550 organizations that encountered data breaches between March 2022 and 2023, the healthcare sector experienced “significantly higher” average data breach costs following the COVID-19 pandemic.

A Moody’s report indicated that the industry became more susceptible to attacks due to the pandemic-induced wave of burnout and staff shortages.

A Healthcare Dive analysis reveals that healthcare data breaches have witnessed a consistent rise almost every year since 2009. Hacking incidents have surged significantly, with hospitals being lucrative targets for ransomware attacks, where criminals demand payment in exchange for restoring access to vital data.

Last year, Chicago-based CommonSpirit Health fell victim to a ransomware attack, jeopardizing the protected health information of nearly 624,000 patients. The attack also disrupted access to electronic health records and resulted in delayed care. In their May earnings report, the health system disclosed that the losses incurred due to the breach have escalated to over $160 million.

The increasing frequency of hospital data breaches has led to legal disputes. Baltimore-based Johns Hopkins Health System is currently facing a class action lawsuit after uncovering a third-party breach during the spring season.

Other critical infrastructure industries are also witnessing an escalation in costs, including financial services, the public sector, energy, transportation, education, and communication. On average, data breach expenses were almost 29% higher for critical infrastructure companies in comparison to other industries, with costs increasing by nearly 5% from 2022.

The FBI Internet Crime Complaint Center identified these industries as prime targets for ransomware attacks last year. However, determining the exact number of ransomware incidents remains challenging due to underreporting to law enforcement.

The IBM report’s researchers emphasized the potential mistake in not involving law enforcement, as organizations that collaborated with law enforcement managed to save an average of $470,000 in breach costs. Surprisingly, 37% of the victims covered in the report refrained from contacting law enforcement despite the potential benefits.

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