In 2024, over 270 million medical records were compromised. This startling figure demonstrates the growing threat that cyberattacks present to the healthcare industry. Despite this, the sector as a whole still consistently fails to prioritize data security – leaving patients vulnerable. This is a dangerous choice that can lead to drastic consequences. With the average healthcare data breach cost rising each year, and attacks becoming more common than ever, the reality is that cybersecurity needs to be a priority – not an afterthought.
But what actually is the average cost of a data breach? Are they really as devastating as news headlines suggest? And what can healthcare organizations do to prevent them without stretching the budget to breaking point?
Why Healthcare Organizations Neglect Cybersecurity
Despite the high cost of healthcare data breaches, and the strict regulations involved, many organizations still lag behind other industries’ tight security measures. There are typically many valid reasons for this:
- Cost Concerns: Healthcare budgets are often incredibly tight, preventing security from being prioritized.
- Staffing Issues: Many providers are working with small or non-existent IT teams, limiting their ability to effectively implement security solutions. Any existing staff are usually focused on other issues that have taken top priority.
- Legacy Infrastructure: The healthcare industry is rife with outdated legacy systems that do not integrate smoothly with modern technology. This makes it significantly more difficult to properly implement advanced security solutions.
While these reasons make sense, it is important to understand that all of them can be far outweighed by the potential cost of a data breach.
How Much Do Data Breaches Cost?
Global Trends
What is the average cost of a data breach? According to the 2024 IMB Cost of a Data Breach Report, it is now an estimated $4.88 million. This highlights a disturbing trend: in 2023, they reported only $4.45 million. Just one year has seen a significant increase. If this trend continues, the expected cost of a data breach in 2025 could be well over $5 million. There is a lesson healthcare providers should learn from this: threat actors are not only striking more often, but are doing far more damage with each attack.
Direct Costs
The first and most obvious cost of a data breach is usually downtime. Cyber threats can bring essential operations to a complete halt, either intentionally (such as during a ransomware attack) or as a side effect. If the victim is unprepared, this downtime may continue for hours – and when each minute can cost thousands of dollars (depending on the organization’s size, IT infrastructure, and the nature of the breach, this quickly adds up.
There are also the costs associated with short-term recovery. Organizations with no in-house team may need to hire a third-party security expert to identify and remove the threat, or to perform a forensic analysis. A severe breach will also typically require an overhaul of current security measures, costing even more in staff training and software solutions. When driven by the emotion of having recently experienced an attack, these measures may not correctly address the organization’s needs, resulting in budgetary waste.
Hidden Costs
While the direct costs may be harmful enough, the expenses organizations don’t see right away are often the most consequential. These may include:
- Reputational Damage: The healthcare industry requires absolute trust at all times. When this faith is broken, it can be almost impossible to repair. Organizations that experience a data breach often notice that patients start to go elsewhere, lowering long-term profits.
- Legal Penalties: Providers are subject to incredibly strict data security laws, such as the Health Insurance Portability and Accessibility Act (HIPAA). If these regulations are violated and a breach occurs as a result, the organization responsible could face severe fines.
- Lawsuits: Some patients may choose to seek compensation for any hardships incurred by the breach. Healthcare providers who have historically failed to prioritize security will not be in a good position to fight these claims.
In short, the ripple effect of a single breach may follow an organization for years to come.
Read more: Application Integration vs Data Integration: What’s the Difference?
Why the Cost of Healthcare Data Breaches is Too High to Risk: A Case Study
A recent example that demonstrates the terrifying consequences of a cyberattack is the Change Healthcare breach. In 2024, a ransomware group known as BlackCat successfully stole patient data and encrypted essential files in a devastating ransomware attack. Unfortunately, UnitedHealth (Change Healthcare’s parent company) did choose to pay the $22 million ransom. As is often the case, this did not result in the safe return of their compromised data – instead, they were forced to pay extensive recovery and restoration costs on top of the initial ransom. It is estimated that the total cost may have been as high as $3 billion.
In the aftermath, the longer term consequences have quickly made themselves apparent. This breach is now believed to have impacted up to 190 million individuals, and trust in Change Healthcare has drastically lowered as a result. This incident has become very well-known in the healthcare community, showing exactly what can happen to organizations that don’t take security seriously.
Data Breach Prevention Strategies
The enormous costs of a data breach should be a wake-up call for healthcare providers everywhere to start prioritizing security. While implementing new solutions may incur unwanted expenses, prevention is far cheaper than the alternative. Fortunately, data security does not have to be expensive. There are a variety of low-cost, high-impact strategies organizations can leverage:
- Implement Multi-Factor Authentication (MFA): MFA ensures that stolen credentials on their own are not enough to grant threat actors access to sensitive data.
- Encrypt Sensitive Data: Encrypt sensitive information both at rest and in transit. This makes it useless to threat actors, mitigating damage and reducing the likelihood of future attacks.
- Train Employees: Human error is one of the biggest reasons data breaches happen. Organizations can significantly lower risk by providing some basic training on common cyber threats and secure data handling.
- Create an Incident Response Plan: If a breach does occur, the organization’s level of preparation will determine how much damage occurs. An incident response plan outlines protocols, responsibilities, and timelines during a cybersecurity emergency, streamlining the response and recovery process.
- Stay Informed: Knowledge is power – and is usually free of charge. There are a variety of resources and reports available that can help healthcare providers stay on top of modern cybersecurity trends.
- Outsource: A managed service provider (MSP) can take care of security for organizations with limited IT staff, eliminating the need to waste funds on additional workers.
- Leverage Cloud Solutions: The cloud offers secure and accessible cloud storage, allowing providers to more effectively manage and protect data without incurring sky-high costs.
Don’t Find Out the Cost of a Data Breach the Hard Way - Strong Security is Worth the Price Tag
The real cost of a data breach in healthcare is measured in far more than initial downtime. The question is not whether healthcare providers can afford to invest in cybersecurity – it’s whether they can afford not to. When planning their budgets, decision-markers must look beyond the short term and consider what is truly best for their patients, staff, and future success.
If you’re trying to improve data security, but have no idea how, ION247 can help. As cybersecurity experts with years of experience serving the healthcare sector, we can teach you everything you need to know. For example, discover how you can customize Microsoft 365 to improve data security.
