The Critical Role of Third-Party Risk Management in Safeguarding Healthcare Data from Breaches

Third-Party Risk Management in healthcare means finding, checking, and lowering cybersecurity and compliance risks that come from outside vendors and service providers. Because healthcare deals with private patient information and financial data, TPRM is needed to keep patient information safe and follow laws like HIPAA.

Third-party vendors in healthcare can be big companies offering cloud storage or cybersecurity, or smaller ones handling billing or medical equipment. There are also non-traditional third parties like visiting doctors, nursing students, and contractors. These different types of vendors make risk management more difficult.

In 2022, most of the biggest healthcare data breaches reported to the U.S. Department of Health and Human Services came from third-party vendors. This shows a problem in how healthcare groups manage risks from their vendors.

The Growing Need for Robust TPRM Practices

Many healthcare groups know their current third-party risk management plans need work. About 60 percent say their strategies need big improvements. Problems happen because they use manual methods, have costly and limited vendor checks, and don’t monitor vendors well over time.

The COVID-19 pandemic made things harder. Healthcare providers quickly started using more digital tools to care for patients remotely. This made their vendor networks bigger fast. While this helped them work better, it also made them more open to cyber risks without improving how they manage their vendors.

Alla Valente from Forrester says managing third-party risk is a cycle. It means checking vendors carefully before starting, then tracking them through the whole partnership, even after access ends. This cycle is needed because vendor risks can change over time.

Key Challenges in Third-Party Risk Management for U.S. Healthcare Providers

• Lack of Automation and Over-Reliance on Manual Processes
  Many healthcare groups still use manual tools like spreadsheets and emails to track vendor risks. This takes a lot of time, is prone to errors, and can’t keep up with many vendors and fast cyber threats.
• Varied and Large Number of Vendors
  Healthcare uses many vendors like IT providers, cloud services, billing companies, medical device makers, and even visiting doctors or students. This large number makes it harder to control data and system access.
• High Costs and Limited Vendor Assessments
  Checking vendors for risk takes time and money. Many healthcare groups only check some vendors because of cost limits. This leaves holes in security.
• Inadequate Vendor Offboarding and Access Management
  Alla Valente says it is important to remove vendor system access right after contracts end or staff stop needing it. Not doing this can cause unauthorized sharing of data.
• Compliance and Regulatory Pressures
  Third-party vendors are often business partners under HIPAA rules, so healthcare groups must protect the patient information these vendors use. Following HIPAA and other laws like GDPR needs constant care, documents, and risk checks.
• Communication Barriers and Transparency Issues
  Vendors may not want to share security details because of competition or privacy. This makes it hard for healthcare groups to get enough proof of low risk.

Impact of Third-Party Risks on Patient Data and Care Delivery

Cyberattacks on vendors have caused big data breaches in healthcare. For example:

• In 2019, the AMCA breach leaked almost 20 million patient records through a billing company.
• In 2015, Anthem Inc. had a breach affecting 78.8 million people because of a hacked third-party service.
• In 2014, Community Health Systems had a breach of 4.5 million patients from stolen third-party vendor credentials.

Data breaches can hurt patient trust, interrupt healthcare services, and lead to fines. Strong TPRM programs help keep private information safe and support smooth healthcare work.

Best Practices for Effective Third-Party Risk Management in Healthcare

• Comprehensive Vendor Inventory Management
  Keep a clear and updated list of all vendors who can access patient data or other sensitive resources. This helps focus on risks and avoids missing any vendor.
• Thorough Vendor Risk Assessments Before Onboarding
  Check vendors well by reviewing their background, security methods, compliance history, and contracts like Business Associate Agreements (BAAs). BAAs explain data use rules and breach reporting under HIPAA.
• Continuous Monitoring of Vendors
  Vendor risk needs to be watched not just once but all through the partnership to spot security changes or problems fast.
• Automation of Risk Management Workflows
  Using automated systems speeds up work, reduces manual errors, and lets staff focus on more important tasks.
• Clear Offboarding and Access De-provisioning Processes
  Remove vendor access quickly when contracts end or work is done to prevent unauthorized data use.
• Regular Training and Communication
  Teach healthcare staff and vendor workers about rules, data privacy, and how to handle breaches so everyone knows their job.

AI and Automated Workflow Solutions in Third-Party Risk Management

Artificial Intelligence (AI) and automation tools are changing how healthcare manages vendor risks. These tools let organizations track vendor security in real time, spot threats, and watch compliance.

Automation Reduces Manual Burdens
Systems like Censinet RiskOps™ help make risk work faster and simpler. Using cloud tools that collect vendor data, some healthcare groups cut assessment times to under 10 days. Automated checks improve accuracy and consistency.

AI Enhances Continuous Monitoring and Predictive Risk Assessment
AI tools study lots of security data faster than humans. For example, Baarez Technology Solutions has AI platforms that keep finding and fixing vendor risks while following HIPAA and other laws. This helps groups spot risk trends and focus on the most urgent problems.

Integration of Risk Data Across Stakeholders
AI platforms give dashboards and alerts that improve clear communication between clinical, IT, compliance, and leadership teams. This helps teams work together to fix security weaknesses.

Regulatory Compliance and Reporting
AI tools make it easier to document risk management actions. This supports audits and reports, matching requirements of HIPAA, GDPR, HITRUST, and others.

Scalability for Expanding Vendor Ecosystems
Healthcare groups with many vendors benefit from automation and AI because manual tracking can become impossible. These tools help make sure no vendor risks are missed.

Regulatory and Compliance Frameworks Guiding Third-Party Risk Management

Following healthcare laws is a big reason for TPRM plans. HIPAA sets strict rules to protect patient data, including needing Business Associate Agreements and requiring breach notices. Breaking these rules can cause big fines and hurt reputation.

HITRUST certification is becoming important. It gives a common set of security rules for healthcare vendors and providers. Using HITRUST reduces problems between vendors and providers by setting clear security expectations. Some reports say organizations using HITRUST saw a 464% return on investment by improving risk control and growing their markets.

Other frameworks like the NIST Cybersecurity Framework and GDPR also affect healthcare TPRM, especially if groups work with vendors or patients outside the U.S.

The Role of Vendor Collaboration and Shared Responsibility

TPRM is not just about following rules. It needs teamwork between healthcare groups and their vendors. Being open about security habits, incident reports, and fixes helps both sides handle new threats better.

Regular audits, joint training, and good communication help healthcare groups and vendors keep patient data safe. Healthcare groups share legal responsibility with their business partners, so watching over vendors all the time is important.

Jonathan Case, Chief Information Security Officer at Baptist Health, said clear communication and trust between operations and board members help handle risks quickly.

Final Observations for U.S. Medical Practice Administrators and IT Managers

Medical practice leaders and IT managers in the U.S. must put third-party risk management first. This is key to protecting patient information, following laws, and keeping healthcare services running well. As vendor networks grow and technology changes, risks from outside providers can’t be ignored.

Spending on automation and AI tools helps speed up risk checks, improve ongoing monitoring, and respond faster to problems. Using a cycle approach to manage vendors—from onboarding through ongoing checks to offboarding—keeps security strong throughout partnerships.

By fixing current problems, using new technology, and working closely with vendors, healthcare groups can lower data breaches caused by third parties and keep patient health information safe.