Healthcare M&A's Demand Increased Safeguards to Protect Patient Privacy
by Gracie Belle Smith on October 18, 2023
With 20 healthcare M&A announcements in Q2 of 2023, M&A's aren't slowing down as 'mega mergers' transactions become increasingly more common. While these transactions offer various benefits such as improved efficiency and expanded services, they also present certain risks, particularly when it comes to patient privacy.
Combined Workforces: A Breeding Ground for Privacy Risks
One of the key aspects of a M&A is the consolidation of workforces from different organizations. This integration brings together employees with varying levels of understanding and adherence to policy and privacy protocols. The lack or misalignment of consistent training and awareness can create vulnerabilities in safeguarding patient data and lead to privacy violations.
Merging workforces can also bring about cultural and procedural differences from the previously disparate organizations that are now merged together. Misalignment of values or priorities among employees can hinder the establishment of a cohesive approach to protecting patient privacy.
During this transitional period, it is vital for organizations to prioritize comprehensive training programs that educate employees about the importance of patient privacy, policies and appropriate behavior. By establishing clear guidelines and expectations, healthcare entities can ensure their workforce is equipped with the necessary knowledge to protect PHI effectively. And, by cultivating a shared commitment and culture to protecting PHI across the newly merged entity, organizations can enhance their overall security posture.
Merging IT Systems: A Complex Challenge for Patient Privacy
Another critical aspect of a healthcare M&A is the merging IT systems. This process often involves integrating EHR systems and other technology platforms, which takes careful planning and timing. During Episode 4 of Protenus' Privacy FAQ video series entitled “An Outlook on Health Systems’ Increasing Risk from M&As”, Protenus CRO Cambrey Ware shared, "Merging your underlying systems poses a security threat due to the sheer amount of accessible patient data being exchanged between entities, as well as, unknown security vulnerabilities that exist when expanding your attack surface." While streamlining these systems can enhance operational efficiency, it also poses significant threats to patient privacy.
The consolidation of data from multiple sources and combined workforce increases the surface area for potential breaches. It is essential for organizations undergoing a M&A to conduct thorough monitoring efforts to identify insider threats. Proactively monitoring system accesses ensures that patient information remains secure throughout the transition process.
The Costly Consequences of Breaches
A breach in patient privacy not only jeopardizes individuals' sensitive information but also imposes severe financial implications on healthcare organizations. The cost of a breach can include legal fees, regulatory fines, reputational damage, and potential lawsuits. In the same episode, Protenus CRO Cambrey Ware shared, "A recent study reported that the average cost of a healthcare breach reached nearly $11 million...and privacy violations can cost hospitals nearly $2 million per violation." Additional adverse effects include, the trust between patients and providers may be irreparably damaged, leading to a decline in patient volume and a negative impact on revenue.
Heightened Safeguards Needed for Patient Privacy
Healthcare M&A's also attract significant regulatory scrutiny. Regulatory bodies closely monitor these transactions to ensure compliance with patient privacy laws such as the HIPAA. Failing to meet these regulatory requirements can result in hefty fines and other punitive measures.
Organizations must establish a comprehensive patient privacy program and prioritizing technology-based solutions for monitoring to streamline investigations and decreasing incident resolution times. A privacy program should include regular audits and ongoing monitoring to identify any deviations from compliance standards. By prioritizing compliance from the outset, healthcare entities can avoid costly penalties and protect patient privacy effectively.
In Closing...Take a Proactive Approach
Healthcare M&A's present both opportunities for growth and challenges for patient privacy protection. To mitigate the risks mentioned above, organizations should invest in preventive and proactive controls. Organizations must define stringent risk management strategies combined with AI-driven patient privacy monitoring solutions, that support their patient privacy programs. By leveraging advanced AI technologies, healthcare entities can monitor 100% of system accesses and identify potential insider threats to patient privacy, enabling swift action to prevent breaches before they occur. The proactive monitoring of inappropriate behavior patterns and investigating incidents provide the organization with better methods to not only protect their reputation from a privacy breach, but also the safety and privacy of the patients they serve.
By prioritizing patient privacy throughout the transition process, healthcare entities can safeguard sensitive information, maintain regulatory compliance, and ultimately build trust with their patients.