Introduction

The healthcare sector in Europe and beyond is rapidly changing, with new technologies and services being introduced to improve patient care and streamline healthcare operations. However, with these changes come new risks, particularly regarding data privacy and security. Healthcare providers rely heavily on third-party vendors to provide a wide range of services, including electronic health record (EHR) systems, medical devices, and cloud-based storage solutions. While these vendors are often necessary for the efficient operation of healthcare organizations, they also represent a significant risk to patient data security.

In this blog post, we will explore the importance of third-party risk management in healthcare. We will examine the risks associated with third-party vendors in healthcare and discuss the procurement and security departments' role in managing these risks. We will also look at the need for fit-for-purpose tooling to manage third-party risk effectively. Finally, we will provide real-life examples of successful third-party risk management in healthcare in Europe and beyond and offer recommendations for healthcare providers looking to improve their third-party risk management practices.

Risks Associated with Third-Party Vendors in Healthcare

Healthcare organizations rely heavily on third-party vendors to provide a range of services, including EHR systems, medical devices, and cloud-based storage solutions. While these vendors are necessary for the efficient operation of healthcare organizations, they also represent a significant risk to patient data security.

One of the most significant risks associated with third-party incidents in healthcare is patient harm. If a third-party vendor fails to provide the necessary services or products, patients can be put at risk of harm. For example, if a third-party vendor fails to deliver the necessary medical supplies, patients may not receive the proper care they need, which could lead to serious health consequences or even death.

Moreover, third-party incidents can also lead to business continuity issues. For instance, if a third-party vendor experiences a ransomware attack, it can lead to system downtime, data loss, and operational disruptions that can impact healthcare providers and their ability to deliver critical services. In some cases, healthcare providers may be forced to delay or cancel appointments and procedures, which can have a significant impact on patient care.

A recent example of a business continuity incident caused by ransomware in healthcare occurred in 2020 when a third-party vendor of a large healthcare provider experienced a ransomware attack. The healthcare provider was unable to access its electronic health records, forcing it to cancel appointments and procedures for several days until the issue was resolved. This incident not only impacted patient care but also resulted in financial losses for the healthcare provider.

Another risk associated with third-party vendors in healthcare is the potential for data breaches. In many cases, third-party vendors have access to sensitive patient data, such as medical histories, insurance information, and other personally identifiable information. If this data is mishandled or stolen, it can have severe consequences for patients and healthcare organizations alike.

Real-life examples of data breaches caused by third-party vendors in healthcare include the WannaCry attack on the UK's National Health Service (NHS) in 2017, which disrupted services across the country, and the 2020 ransomware attack on the Finnish psychotherapy center Vastaamo, which compromised the personal information of tens of thousands of patients. Another example is the data breach at the Dutch Healthcare Providers of Municipalities (GGDs)

These breaches can have a significant impact on patients, healthcare providers, and the healthcare industry as a whole:

• Financial losses: Third-party incidents can result in significant financial losses for healthcare organizations, including costs associated with data recovery, remediation, and legal fees.

• Reputational damage: Data breaches and other incidents involving third-party vendors can damage the reputation of healthcare organizations, leading to a loss of public trust and potential business disruptions.

• Legal action: Healthcare organizations may face legal action from patients, regulatory bodies, or other parties affected by a third-party incident, which can result in significant financial and reputational damage.

• Regulatory fines: Healthcare organizations may face fines and other penalties from regulatory bodies for failing to manage third-party risk adequately.

• Patient harm: Data breaches and other incidents involving third-party vendors can potentially harm patients, including through identity theft, medical fraud, or other forms of financial harm.

• Business disruption: Third-party incidents can disrupt healthcare operations, leading to delays in patient care and other business disruptions.

In the next section, we will explore the role of procurement departments in managing third-party risk in healthcare.

The Role of Procurement Departments in Managing Third-Party Risk in Healthcare

Procurement departments play a critical role in managing third-party risk in healthcare. These departments are responsible for selecting and managing third-party vendors, negotiating contracts, and ensuring that vendors meet contractual obligations related to data privacy and security.

One of the critical challenges for procurement departments in managing third-party risk is ensuring that vendors meet the necessary security requirements. This requires a thorough understanding of the vendor's security practices and the ability to assess their security posture effectively. Procurement departments must also ensure that contracts with vendors include data protection, breach notification, and indemnification provisions - all tailored to the criticality of the vendor.

In addition to these guidelines, procurement departments can take a range of steps to manage third-party risk effectively, including:

• Conducting thorough vendor assessments before selecting a new vendor

• Ensuring that contracts with vendors include clear and specific security requirements

• Monitoring vendor security practices regularly to ensure that they meet contractual obligations

• Providing training and resources to vendors to help them meet security requirements

• Conducting regular audits and risk assessments of third-party vendors

In the next section, we will explore the role of security departments in managing third-party risk in healthcare.

The Role of Security Departments in Managing Third-Party Risk in Healthcare

Chief Information Security Officers (CISOs) and information security departments are critical in managing third-party risk in healthcare. These bodies are responsible for implementing cyber security measures and controls to ensure business continuity and protect patient data, including those related to third-party vendors. Security departments must also ensure third-party vendors comply with security policies and procedures, including access controls, data encryption, and security audits.

One of the critical challenges for security departments in managing third-party risk is ensuring that third-party vendors have adequate security controls in place. This requires a thorough understanding of the vendor's security practices and the ability to assess their security posture effectively. Security departments must also ensure third-party vendors comply with relevant data protection legislation and contractual security requirements.

Security teams must also implement measures to ensure compliance with the Network and Information Security Directive (NIS-2). This directive includes several specific requirements regarding due diligence and real-time monitoring of third parties.

In the next section, we will explore the need for fit-for-purpose tooling in managing third-party risk in healthcare.

The Importance of a Multidisciplinary Platform for Third-Party Risk Management

Managing third-party risk in healthcare is a complex task that requires a multidisciplinary approach. Comprehensive third-party risk management technology should provide a centralized platform that allows healthcare organizations to manage risks from multiple disciplines, such as cybersecurity, financial risk, continuity, quality, and sustainability.

The platform should enable healthcare organizations to integrate with internal and external data sources, such as regulatory databases and financial rating agencies, to ensure that vendor risks are assessed accurately and comprehensively. This integration can provide a more complete view of the risks associated with third-party vendors and enable healthcare organizations to identify and prioritize high-risk vendors.

Real-life examples of comprehensive third-party risk management technology in healthcare include platforms that offer due diligence assessments to evaluate vendor risks across multiple disciplines. These assessments can provide valuable insights into vendor security practices, financial stability, and other risk factors that healthcare organizations must consider when selecting and managing third-party vendors.

Additionally, the platform should provide tools for ongoing monitoring and reporting, enabling healthcare organizations to track vendor risks over time and take appropriate action to mitigate those risks. This includes sending due diligence assessments to vendors, monitoring their compliance with contractual and regulatory security requirements, and responding quickly to security incidents.

In summary, a comprehensive third-party risk management platform is essential for managing risks associated with third-party vendors in healthcare. Such a platform should offer a multidisciplinary approach, the ability to integrate with internal and external data sources, and the capability to send due diligence assessments to vendors. By leveraging such technology, healthcare organizations can minimize the risk of disruptions, and data breaches, maintain regulatory compliance, and protect patient safety and privacy.

Conclusion

In conclusion, third-party risk management is critical for healthcare organizations in Europe. Protecting patient safety must always be the number one priority for healthcare providers, and managing third-party risks effectively is essential to achieve this goal.

Healthcare providers must also protect patient data from breaches and other security incidents that can compromise patient privacy and disrupt healthcare operations. Comprehensive third-party risk management technology can help healthcare organizations manage these risks effectively, providing a centralized platform for assessing vendor risks, monitoring security practices, and mitigating security incidents.

By implementing proactive third-party risk management strategies, healthcare organizations can minimize the risk of healthcare disruptions, data breaches and other security incidents, maintain regulatory compliance, and protect their reputation and financial standing. Ultimately, the most critical aspect of third-party risk management is ensuring that patient safety is never compromised and that the highest standards of care are upheld throughout the healthcare industry.