Hospital Cyber Attacks Surge, Risking Struggling Bottom Lines

Cyberattacks on US hospitals are on the rise, adding a layer of financial pressure onto an industry still struggling to recover from the pandemic. From a report: Health facilities have been hit with 226 digital incursions affecting 36 million people this year, on track to be more widespread than 2022 attacks, according to John Riggi, the national advisor for cybersecurity and risk at the American Hospital Association. Cyber raids on hospitals more than tripled in the past five years and have become more sophisticated, just when hospitals are coping with higher costs for labor and supplies and grappling with staff shortages. The industry in 2022 had what Moody's Investors Service analyst Matthew Cahill called "arguably the worst year in health-care history" for financial performance. "There's really no wiggle room for hospitals to deal with this," Cahill said in an interview. He said cyber risk has contributed to downgrades, including one at Missouri's Capital Region Medical Center last year following a breach. Health-care facilities are attractive targets for cybercriminals because they hold ample personal data on patients, Matt Fabian and Lisa Washburn of Municipal Market Analytics wrote in a research note. Staffing shortages and wide use of third-party technology make the sector particularly vulnerable. The problem is particularly dire at smaller and rural hospitals, which have more financial distress and tend to use older technology. In an April note, Moody's cited an IBM survey that showed hospitals for 12 years have had the highest average cyberattack cost per industry, with $10.1 million in 2022. The AHA's Riggi said that while most hospitals have insurance, the cost to recover from attacks could be up to 10 times what insurance pays out.

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