The financial impact of healthcare data breaches on organizations is nearly $6.5 million, according to a recent IBM study on data breach costs. Healthcare organizations had the highest cost of a breach than other industries for the ninth year in a row––about 60% more than other industries in the study.
Data breaches can result in losses of millions of dollars and customer turnover for companies across all industries, but the consequences can be even larger for healthcare organizations, which have sensitive patient information including medical records and personal information.
Over the last five years, the cost of a data breach across all industries has risen 12%, with an average cost of $3.92 million. Of that average, $1.42 million, or 36%, was the cost of lost business for organizations. Over the last 14 years of the study, the costs for data breaches in the U.S. have increased 130%.
"Cybercrime represents big money for cybercriminals, and unfortunately that equates to significant losses for businesses," Wendi Whitmore, global lead for IBM X-Force Incident Response and Intelligence Services, said in a statement. "With organizations facing the loss or theft of over 11.7 billion records in the past 3 years alone, companies need to be aware of the full financial impact that a data breach can have on their bottom line –and focus on how they can reduce these costs."
The costs represent the multiyear financial impact of breaches, increased regulation and resolving criminal attacks. According to IBM, the effects of a data breach extend beyond the immediate impact, with 67% of costs realized within the first year after the breach, 22% in the second year, and 11% more than two years after a breach.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."