Adrian Johnson
TLDR:
Key points:
- Cybersecurity risks are often overlooked during healthcare mergers and acquisitions (M&A).
- M&A activity poses a heightened risk of compromising sensitive health information.
- A proactive approach to assessing and addressing cybersecurity risks is crucial to avoid costly data breaches.
Cybersecurity Risks During Healthcare Mergers and Acquisitions
When engaging in mergers and acquisitions (M&A) in the healthcare sector, one key element that is often overlooked is the assessment of cybersecurity risks. Failure to properly assess these risks during the due diligence process can lead to significant consequences, including data breaches and compromised sensitive health information.
The average dwell time for detecting and containing a data breach is 277 days, highlighting the importance of addressing cybersecurity vulnerabilities before they result in a breach. The healthcare sector faces an average cost of over $10 million for a data breach, making it critical to mitigate these risks proactively.
With the merging of healthcare organizations, there is a concern over the combination of technology systems and cybersecurity vulnerabilities. Failure to address these vulnerabilities can result in large-scale data breaches that impact the entire organization, as seen in a ransomware attack on a Chicago-based hospital chain.
To mitigate cybersecurity risks during M&A transactions, conducting a comprehensive cybersecurity and technology assessment of the target’s environment is essential. This assessment can help identify risks, establish a plan, and determine associated costs for addressing them. Factors like compliance with HIPAA regulations must also be evaluated to ensure regulatory requirements are met.
A proactive approach to evaluating and addressing cybersecurity risks during M&A transactions is crucial. Tools like the SCORE Report can help identify and rank risks, provide solutions, and estimate resources needed to mitigate these risks. By taking a proactive approach, organizations can avoid costly data breaches and ensure a smooth transition during M&A activities.
Overall, considering cybersecurity risks during healthcare M&A transactions is imperative to safeguard sensitive information, protect against data breaches, and ensure a successful merger or acquisition process.
