Data Breaches Cost Hospitals $6B Yearly

Dom Nicastro, November 5, 2010

Hospitals spend $6 billion annually because of data breaches, and Federal regulations enacted under the HITECH Act have not improved the safety of patient records research from The Ponemon Institute shows.

Among the data security and privacy research firm's findings:

  • Hospitals are not protecting patient data
  • Hospitals admit to being vulnerable to a data breach
  • Breaches of patient information are occurring frequently and often go unreported, putting patients' privacy at risk
  • A small percentage of healthcare organizations rely on security technologies to prevent and detect data breach incidents
  • Federal regulations—HITECH—have not improved the safety of patient records

Last year, Ponemon released its fifth annual study on the cost of data breaches—"2009 Annual Study: Cost of a Data Breach: Understanding Financial Impact, Customer Turnover, and Preventative Solutions."

That study found the average cost for a compromised record to be approximately $144 in indirect costs and $60 of direct costs, for a total cost of $204.

Dom Nicastro Dom Nicastro is a contributing writer. He edits the Medical Records Briefings newsletter and manages the HIPAA Update Blog.
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