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Payments


CYBERSECURITY IN HEALTHCARE – PROTECTING DATA AND FIGHTING FRAUD

November 27, 2023

Digitization is creating unprecedented volumes of sensitive data in healthcare,
which requires advanced cybersecurity practices.

   
 * Introduction
 * Digital innovation and risk
 * Security considerations specific to healthcare
 * Globalization, innovation, and regulation
 * In summary

IntroductionDigital innovation and riskSecurity considerations specific to
healthcareGlobalization, innovation, and regulationIn summary

Overview

   
 * Introduction
 * Digital innovation and risk
 * Security considerations specific to healthcare
 * Globalization, innovation, and regulation
 * In summary

 * 
 * 
 * 
 * 
 * 


KEY TAKEAWAYS

 * A patchwork of global healthcare regulation makes it more difficult for
   companies in the sector to innovate while remaining compliant. This is
   increasing the likelihood of data breaches and cyberattacks like phishing,
   malware, DDoS and ransomware.
 * Partnerships with external service providers are critical for healthcare
   organizations to navigate this complex landscape of digital opportunities and
   regulatory frameworks.
 * Thwarting hackers, cyber-criminals and other threat actors takes a
   coordinated approach covering technology, processes and people.


QUICK LINKS

 * How healthcare organizations can thrive amid uncertainty

 * Healthcare Payments Solutions

 * The future of healthcare payments: Innovation, inclusion and interconnected
   healthcare


QUICKLINKS

 * How healthcare organizations can thrive amid uncertainty

 * Healthcare Payments Solutions

 * The future of healthcare payments: Innovation, inclusion and interconnected
   healthcare

1/3



INTRODUCTION

The healthcare sector is changing dramatically thanks to the rise of
digitalization. More information than ever is migrating from paper to electronic
form, driven by process automation, artificial intelligence, telehealth and the
remote monitoring of medical devices.

This rapid evolution has created a torrent of data. According to the World
Economic Forum, hospitals produce 50 petabytes of data each year.

As in other sectors, digitization in healthcare brings both opportunities and
challenges. Larger volumes of digitally stored data—much of which is highly
sensitive—can make cyberattacks more likely. The U.S. Department of Health and
Human Services (HHS) documented 5,150 reported healthcare data breaches of over
500 records between 2009 and 2022, with more occurring in 2021 than ever before.

According to Claroty’s survey of 1,100 cybersecurity, engineering, IT, and
networking professionals who work full-time at healthcare organizations, 77% of
European healthcare professionals reported at least one cybersecurity incident
between June 2022 and June 2023, while 29% said that personal identifiable
information (PII) was affected. In APAC, 69% reported at least one breach, with
26% reporting an impact on PII. In South America, 87% report at least one
incident, with PII exposed in 24% of cases.

Globally, the situation was similar. Check Point Research saw a 74% increase in
global healthcare attacks during 2022, with an average of 1,463 attacks per
organization in the sector each week.

This data's sensitivity creates an acute information security risk for
healthcare companies and their patients. It attracts numerous threats from
criminal actors, including data theft and cyberattacks that can disrupt
administrative systems and affect healthcare operations.

Fraud is also a big concern. Funds stolen through unauthorized system access
affect the working capital needed to provide healthcare services. Malware and
ransomware can cost millions by shutting down critical IT systems.

These risks represent big costs for hospitals. According to the 2023 Cost of a
Data Breach report from IBM and the Ponemon Institute, the average cost of a
healthcare data breach was $10.93m, compared to a cross-sector average of
$4.45m. The cost of healthcare data breaches has increased 53.3% over the past
three years.

With so much at stake, the risk of cyberattacks places more pressure on
treasurers across the healthcare ecosystem to put cybersecurity and fraud
prevention at the heart of their digitization and payments strategies.

These practices should follow the principles that already underpin mature
cybersecurity efforts. This uses multiple levels of protection, spanning three
key domains:

 * Technology: Technology protections include network intrusion detection and
   prevention, identity and access management, and multi-factor authentication.
 * Process: All processes should be tailored with security in mind. These
   include change management requests, least-privilege management, and the
   regular application of security patches.
 * People: Effective cybersecurity relies on an engaged workforce. All users,
   including employees and contractors, should be aware of digital threats and
   the importance of cyber hygiene, especially surrounding threats like
   phishing, which attempt to trick users into revealing sensitive information.


DIGITAL INNOVATION AND RISK

Security concerns aren’t limited to the boundaries of a particular provider or
manufacturer. The healthcare system is increasingly interconnected, which
requires the extension of cybersecurity protections to partners such as vendors,
clients, and suppliers. Large interconnected networks can increase an
organization’s vulnerability and make them more likely to become a victim of
cybercrime. Audits, controls, and risk management play a key part in
inter-organization cybersecurity. Security must be consistent and dependent at
all points along the way to protect the data that flows between these
organizations.

Digitization in healthcare also involves more connected medical devices. The
internet of medical things has evolved to incorporate many different
technologies that support better patient outcomes. These include everything from
automated insulin delivery systems to wearable devices that gather data on
patient vitals, enabling hospitals to release patients for home care. All of
these systems are ripe for cyberattack.

Digital payments are also increasingly common in healthcare, both for consumers
through contactless payment options and in B2B payment scenarios. The complexity
of the healthcare system expands the number of potential payment points, each of
which creates another attack vector.


SECURITY CONSIDERATIONS SPECIFIC TO HEALTHCARE

Healthcare organizations, including insurers, face sector-specific cybersecurity
challenges, especially under Health Insurance Portability and Accountability Act
(HIPAA) regulations.

Companies in this sector must find a balance between meeting regulatory
requirements while undergoing digital transformation. Regulators apply their
restrictions with good reason, because the stakes are high when tackling
cybersecurity in healthcare. The sector faces threats across several areas:

 * PII: Healthcare operations are responsible for large amounts of personal
   information. This is a valuable target for hackers, who can use it for
   identity theft.
 * Payment information: Financial data is a valuable asset for perpetrators of
   fraud and criminal groups. It can be used to make fake purchases, or
   cybercriminals could use hacked physician credentials and stolen patient
   lists to file illegitimate insurance claims as outlined in Deloitte’s report,
   The Looming Wave of Cyber Fraud in Health Care. Leveraging payments
   technology built with HIPAA compliance and cybersecurity in mind, like
   InstaMed, can help mitigate these risks.
 * Business disruption: Denial of service attacks and ransomware pose acute
   risks for healthcare companies, who might find themselves returning to manual
   operation when compromised systems fail.
 * Healthcare quality: Attacks on healthcare data and digital infrastructure can
   also affect patient care. Research into healthcare cyberattacks by security
   vendor Proofpoint found that 23% of organizations reported an increased
   mortality rate from cyberattacks.

There are plenty of resources available to healthcare companies that will help
them to refine their cybersecurity protections. For example, the HHS 405(d)
program provides guidance and links to help create a robust security framework.

Healthcare providers can also use third-party services to help secure their
sensitive data. Healthcare Link is one such service. This digital lockbox from
J.P. Morgan images paper-based bill and remittance documents, using artificial
intelligence to derive actionable data that feeds payment systems. Healthcare
Link provides a secure mechanism for healthcare organizations to store and
access this critical business information while remaining HIPAA compliant.


GLOBALIZATION, INNOVATION, AND REGULATION

HIPAA is just one example of healthcare-related regulations that place extra
pressure on organizations as they strive for efficient operations in this
sector. They must balance innovation with a global patchwork of data security
guidelines, regulations, and policy initiatives focused on maintaining data and
process safety.

Examples of cybersecurity policy initiatives in the US include the Healthcare
Cybersecurity Act of 2022, proposed legislation resulting from collaboration
between HHD and the Cybersecurity and Infrastructure Security Agency (CISA).
Another is the CDC's 2020 healthcare Data Modernization Initiative.

Policies and regulations in the EMEA region are even more complex, layering
bloc-level initiatives atop country-specific regulations. For example, the EU
has a Medical Device Regulation and has proposed creating a Health Data Space
for security purposes. EU healthcare organizations must also contend with
regional payments initiatives such as the Single Euro Payments area (SEPA), and
the amended Payment Services Directive (PSD2).

The regulators producing these rules often struggle to keep up with fast-paced
innovation in areas such as health IDs, payments, and telehealth. This
innovation also includes "digital front doors:" healthcare portals that provide
one-stop access to services and information throughout the healthcare value
chain, as outlined in J.P. Morgan's Future of Healthcare Payments white paper.

Although exciting, products like these require more data exchange than ever,
often between multiple healthcare operators and related services. This creates
multiple points of vulnerability where attackers could steal data,
misappropriate financial information, or affect system operations.

While regulation might make innovation more difficult, it’s also a crucial
response to the growing cybersecurity threat, designed to protect healthcare
operators and their patients.


IN SUMMARY

There is always a danger that cybersecurity gaps might emerge in any industry
that moves quickly to innovate. Healthcare, with its complex industry structure
and reliance on highly sensitive information, is especially prone to this
problem. The impact on healthcare payments and the opportunity for fraud are
especially concerning, as attacks in these areas can bring critical healthcare
processes to a halt, impacting patient care.

The solution isn’t to shy away from digital, but ensure it is done with embedded
security across products, partners, and infrastructure.

To deliver improved, accessible, and cost-efficient care, it is essential to
embrace digital transformation. A modernized payments infrastructure plays a
critical role in achieving this future. The healthcare industry must adopt
advanced payment technology in order to keep pace with end-to-end financial
solutions. They must work with experienced partners to help them integrate
payments into electronic health records platforms, develop cross-currency
solutions, expand merchant services, and effectively manage liquidity.

J.P. Morgan has a variety of services and systems that can help healthcare
providers to secure their payments, processes, and data. Contact us to find out
how we can help.




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