A Healthcare Compliance Leader’s Guide to Patient Data Protection 

Over 500 million Americans’ healthcare data have been breached since 2009, with the number rising steadily in recent years. Protecting patient data is a growing challenge for healthcare organizations, requiring a multifaceted approach to address both internal and external risks.  

How should compliance leaders approach that challenge – and what are the most important aspects of patient data security? 

This guide helps healthcare compliance leaders quickly understand the subject and take decisive action to protect their patients, reputation, and bottom line. Before we delve into specific recommendations, let’s establish the true challenge that healthcare organizations face: safeguarding sensitive patient data amid complex regulations. 

Protecting Patient Data: An Expert Overview 

What is Protected Health Information? 

Protected Health Information (PHI) is any healthcare data that could be linked to a specific patient, from physician notes and diagnoses to billing and payment information. At the federal level, there are two primary regulations in the U.S. that govern its protection: 

1. HIPAA: The Health Insurance Portability and Accountability Act (HIPAA) provides a set of national standards for the protection of patient data privacy and security. It comprises three core rules – the Privacy, Security, and Notification Breach Rules – and  non-compliance can result in fines of up to $1.5 million per violation for the most serious offenses . 
2. HITECH Act: The Health Information Technology for Economic and Clinical Health Act (HITECH) was passed in 2009 to promote the adoption of electronic health records (EHRs). However, it also introduced additional support to existing HIPAA measures, such as requiring covered entities to report data breaches that affected 500 or more patients to the news media. 

However, the imperative to safeguard PHI extends beyond basic compliance requirements.  

The Ethical Case for Protecting Patient Data 

PHI is highly sensitive and strictly regulated worldwide. The reason is simple: in the wrong hands, it can be highly damaging to the affected individuals. A few examples include:  

• Identity Theft: PHI is a frequent target for identity thieves, with studies estimating that 71percent of data involved in healthcare breaches could be exploited for fraudulent activities. These include financial fraud, stolen medical insurance, or the creation of fake IDs.  
• Blackmail: Criminals may exploit sensitive health information to blackmail individuals, threatening to disclose it to their friends, colleagues, or employers.  
• Targeted Marketing: Private information about an individual’s health status could be weaponized to deliver targeted marketing messages that the individual is particularly vulnerable to.  

This has created a lucrative black market for patient data, leading healthcare to be both the industry most heavily targeted by cybercriminals and the most extensively regulated regarding data privacy. 

The Business Case for Protecting Patient Data 

Healthcare organizations face a range of potential harms from patient data breaches, including: 

• Financial Losses: We’ve already discussed the steep fines a HIPAA violation can produce, but the financial risks don’t end there. Patients whose data has been leaked or lost are entitled to pursue state-level legal claims against your organization, incurring defense fees, potential payouts, and long-term revenue loss due to patient attrition. 
• Lost Contracts: Failure to protect patient data can erode the government’s trust in a contractor, potentially resulting in the termination of contracts for federally funded programs like Medicare and Medicaid. This can lead to a meaningful loss of future revenue. 
• Reputation Damage: Large-scale data breaches can lead to significant reputation damage for the affected organization. HHS may list your organization on the HIPAA Breach Reporting Tool, commonly known as the “HIPAA Wall of Shame.” Negative media reports about the breach could impact patient intake and hiring efforts. 

The takeaway is clear: protecting patient data is both an ethical imperative and a business necessity. But what exactly are you protecting that data from? 

The Three Most Common Causes of Patient Data Breaches 

While patient data can be compromised in a wide range of ways, most breaches are the result of three core risks: 

1. Hacking 

Hacking is the act of gaining unauthorized access to an IT network, usually by exploiting a vulnerability in the cybersecurity system. Healthcare organizations are highly prone to such attacks due to their highly complex digital ecosystems, which often contain outdated machines where software has not been updated or adequately protected. 

This vulnerability is reflected by the data: between 2005 and 2019, over 161 million patients’ data were compromised through hacking incidents. These incidents were a result of a range of hacking methods, including: 

• Phishing: A technique where attackers disguise themselves as trustworthy entities to deceive individuals into divulging sensitive information, such as login credentials or personal data, often via email. 
• Ransomware: Malicious software that encrypts a victim’s files and demands payment for the decryption key, severely disrupting medical services by holding patient data hostage. 
• DDoS Attacks (Distributed Denial of Service): In these attacks, hackers flood servers with excessive traffic, aiming to overwhelm and render healthcare systems and networks unavailable to legitimate users. 
• SQL Injection (Structured Query Language): A code injection technique that exploits vulnerabilities in an application’s software by inserting or “injecting” SQL commands into entry fields, manipulating databases to illegitimately access or corrupt data. 
• Social Engineering: A manipulation technique where attackers trick individuals into divulging confidential information by exploiting human psychology rather than using technical hacking methods. 

2. Employee Error 

Research suggests employee error is responsible for 39 percent of all healthcare data breaches. This is higher than any other industry and can manifest in multiple ways: 

• Unauthorized Access: HIPAA requires strict access controls and dictates that employees must have authorization to access PHI. However, employees frequently and inadvertently use computers or open files that contain information they are not authorized to view. 
• Accidental Disclosure: Employees may not share or divulge patient information without clear authorization, yet data can still easily be compromised. For example, employees may inadvertently reveal  PHI when posting on social media, often unaware they have included details that could identify the individual involved. Another common culprit is breakroom conversation, where information may be shared without realizing the recipient lacks authorization. 
• Improper Disposal: From shredding paperwork to disposing of old computers, HIPAA provides strong guidelines for properly discarding items that have stored PHI. These steps are often overlooked, potentially resulting in a data security violation. For example, a computer may be disposed of without its data being properly wiped, allowing someone to recover PHI from the hard drive.  

3. Third-Party Vendor Breaches 

The average healthcare organization works with over 1,300 vendors, and 44 percent report that at least one of their vendors has experienced a cybersecurity breach. Many of these vendors have direct access to at least some patient data, meaning a breach of their system puts PHI at risk. 

Third parties are vulnerable to both hacking and employee error, meaning each vendor effectively doubles your vulnerability. This makes it essential to ensure every vendor contract stipulates the importance of cybersecurity. However, there are several other steps compliance leaders should take to protect their patients’ data. 

Five Ways to Protect Patient Data 

Our experience working with countless healthcare compliance leaders suggests five key measures that can significantly improve your patient data security: 

1. Regular Risk Assessments 

Conducting regular risk assessments is essential for identifying potential vulnerabilities within your healthcare organization. Our experts suggest most organizations would benefit from at least two assessments each year. By proactively evaluating current systems, policies, and procedures, you can uncover weaknesses before they become issues. This approach not only helps prioritize mitigation strategies but also keeps your defenses agile in response to new threats. 

2. Data Encryption and Access Controls 

Encrypting data both in transit and at rest ensures that sensitive information remains unreadable to unauthorized persons. Coupled with stringent access controls, this method guarantees that only authorized personnel can access patient information. Employing multi-factor authentication and role-based access further fortifies these controls, providing an additional layer of security around patient data. 

3. Frequent Employee Training 

Employees serve as the first line of defense against data breaches; hence, regular training is essential. While the frequency of training should be calibrated to the specific needs of your organization, our team suggests that, at a minimum, healthcare organizations should offer: 

• Training for every new hire during onboarding 
• Annual retraining for all employees 
• Additional training sessions when new regulations or requirements are introduced 

Educating staff about the latest phishing tactics, password management, and data protection protocols can significantly diminish the risk of human error-related breaches. Awareness campaigns and simulated phishing attacks can be effective tools in keeping your team vigilant and well-prepared. 

4. Physical Safeguards 

While significant focus is placed on digital defense, securing physical premises is equally critical. Healthcare organizations should implement security measures like surveillance systems, secure entry points, and proper storage solutions for devices containing PHI. These safeguards help prevent unauthorized physical access to sensitive data and serve as a deterrent to potential internal threats. 

5. Sanction Screening 

Ensuring that individuals with access to sensitive data are trustworthy is paramount. Organizations should conduct comprehensive background checks and sanction screenings regularly. This helps affirm that employees, vendors, and partners are compliant with legal and ethical standards, and minimizes the risk posed by insiders with malicious intent. 

The Future of Patient Data Protection: Three Factors Compliance Teams Should Consider 

Patient data security has evolved in many stages – from the introduction of electronic health records (EHRs) to the advent of AI. Compliance leaders should prepare for the next phase of this journey, with emphasis on three essential factors: 

1. Changing Legislation 

Patient data regulations are constantly evolving, with proposed updates to the HIPAA Security Rule likely to be introduced soon. Equally, the healthcare industry is clearly moving en masse toward more stringent data protections, regardless of the specific regulatory requirements to which organizations are subject. 

Compliance leaders must prepare for new regulations that may introduce stricter security measures or broaden the scope of what constitutes protected health information. Staying ahead of these changes is crucial to avoid penalties and ensure the highest level of data protection. 

2. Evolving Technology 

The integration of advanced technologies – particularly artificial intelligence  – within healthcare poses serious challenges from a data security perspective. Many of these tools could be transformative for both care and administrative efficiency, but they generally require access to high volumes of patient data. 

This puts compliance leaders in a difficult position: balancing the need to both protect patient data while ensuring your organization benefits from these powerful technologies. Proactive compliance measures will be required to safely adopt AI solutions, but they should also account for the human element: how do patients feel about the use of their data in automated systems, and what can be done to help build their trust? 

3. Data Interoperability 

There is increasing pressure on healthcare organizations to enhance data interoperability, enabling seamless sharing and access across platforms and institutions. While this trend promises improved healthcare delivery and patient outcomes, it also raises significant concerns about privacy and security.  

Ensuring that systems can communicate effectively without compromising patient confidentiality will require strategic investment in secure integrations that enable safe data sharing and – when necessary – anonymization to protect patients’ identities. 

Get Proven Patient Data Protection Policies with Compliance Resource Center 

Patient data security can be overwhelming, and adapting your compliance program to address every risk can feel impossible. That’s why so many organizations leverage pre-built policies and procedures to save time, improve their posture, and give their patients stronger protections. 

Compliance Resource Center offers a wide range of templates that meet every healthcare compliance requirement, including all three HIPAA rules. They can be easily customized to meet your specific operational needs, align with your company culture, and enhance your overall cybersecurity posture. 

Want to simplify and enhance your patient data protection? 

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