Don’t Get Blindsided by a Cybersecurity Breach: 10 Due Diligence Strategies for Healthcare Merger
A recent study conducted by the Ponemon Institute found that 71 percent of healthcare organizations have experienced a data breach in the last two years. Ponemon’s “2018 Cost of a Data Breach Study” also found that the average cost of a data breach for healthcare organizations is $6.45 million. With these statistics in mind, it’s no wonder why cybersecurity should be at the top of mind for any healthcare organization looking to merge or acquire another. In this blog post, we will explore 10 strategies for healthcare mergers and acquisitions cybersecurity due diligence. From performing background checks on potential targets to establishing secure communication channels, these tips will help you secure your organization from a costly data breach.
The importance of cyber diligence in M&A
In recent years, cyberattacks have become an increasingly common occurrence in the business world. As such, it is essential for companies to be diligent in their cybersecurity efforts when conducting mergers and acquisitions (M&A).
There are a number of reasons why cyber diligence is so important in M&A. First, transactions involving the transfer of sensitive data are particularly vulnerable to attack. Second, the target company may have weak cybersecurity controls in place, which could allow attackers to gain access to the buyer’s systems. Finally, the integration of two different IT infrastructures can create new vulnerabilities that can be exploited by hackers.
To protect themselves from these risks, companies need to perform due diligence on the target company’s cybersecurity posture. This process should include an assessment of the target’s security policies and procedures, as well as a review of its past security incidents. In addition, companies should consider hiring a third-party firm to conduct penetration testing on the target’s systems. By taking these steps, companies can ensure that they are adequately prepared to deal with the cybersecurity risks associated with M&A activity.
10 key strategies for healthcare M&A cyber diligence
When it comes to healthcare M&A, cyber diligence is key in order to protect sensitive patient data and avoid any disruptions to care. Here are some key strategies for conducting cyber diligence:
1.Identify and assess cybersecurity risks: This includes identifying any potential gaps in security measures and assessing the likelihood and impact of a data breach.
2.Evaluate the target’s cybersecurity posture: This involves looking at the target’s current security measures, as well as their incident response plan and overall awareness of cyber risks.
3.Understand the target’s culture around cybersecurity: It’s important to understand how the target organization views and treats cybersecurity risks. This includes understanding their past incidents, if any, and how they were handled.
4.Conduct a technical assessment of the target’s systems: This step involves a more in-depth look at the target’s technical security measures, including their network architecture, access controls, and data encryption practices.
5.Review insurance coverage: It’s important to understand what type of insurance coverage the target has in place in case of a data breach or other cyber incident.
6. Identify the target company’s critical assets: When it comes to healthcare merger and acquisition (M&A) transactions, there is a critical need to identify and protect against cybersecurity risks. A thorough due diligence process is an important step in minimizing the chances of a cyber breach during an M&A.
7.Evaluate the target company’s risk management program: It’s essential to evaluate the target company’s risk management program to ensure that the necessary steps are being taken to safeguard sensitive data.
8.Understand the target company’s compliance requirements when considering a merger or acquisition in the healthcare industry, it’s critical to understand the target company’s compliance requirements. Healthcare companies are subject to multiple data privacy laws and regulations that they must adhere to, including HIPAA and HITECH.
9.Assess the target company’s security controls: When it comes to cybersecurity due diligence during a healthcare merger or acquisition, one of the most important steps is to assess the target company’s security controls
10.Hire a third-party security firm to conduct an independent assessment: When considering a healthcare merger or acquisition, one of the most important steps is to ensure that the proposed transaction will be secure. One way to do this is to hire a third-party security firm to conduct an independent assessment.
By taking these steps during due diligence, you can help ensure that your healthcare M&A transaction is successful while also protecting sensitive patient data.
The future of healthcare cybersecurity
The future of healthcare cybersecurity is shrouded in uncertainty.
The healthcare industry has been the target of many high-profile cyberattacks in recent years, and the trend is expected to continue. The WannaCry ransomware attack in 2017 crippled the UK’s National Health Service (NHS), and the 2018 Equifax breach exposed the personal data of over 145 million people.
As these incidents show, no organization is safe from cybercrime. This is especially true for healthcare organizations, which are often seen as soft targets due to their reliance on outdated technology and lack of robust security measures.
In the wake of these attacks, many healthcare organizations are scrambling to improve their cybersecurity posture. However, this is easier said than done, as most healthcare organizations have limited budgets and resources.
One way to address this challenge is for healthcare organizations to band together and form consortiums. These consortiums can pool resources and share best practices on how to improve cybersecurity.
Another way to improve healthcare cybersecurity is through mergers and acquisitions (M&A). By acquiring another company, a healthcare organization can quickly bolster its cybersecurity defenses. However, M&A can also be a double-edged sword, as it can also introduce new risks that need to be managed carefully.
When it comes to M&A, due diligence is critical. This means that buyers need to thoroughly investigate the target company before signing any deal.