Financial Considerations of Cybersecurity

cybersecurity cost

Cybersecurity is a massive concern among all industries today, from large consumer businesses to the financial sector, and healthcare in particular. Cyber criminals are targeting healthcare organizations at a disproportionate rate, and the costs of cyber-attacks in this industry are staggering. This is why it’s important to focus on financial considerations when planning how you will use cybersecurity in your own practice.

What are the financial consequences of a cyber-attack?

Data breach costs are highest in the healthcare industry, and this has been the case for 11 consecutive years. In 2021, the average cost of a healthcare data breach was $9.23 million. This was a 29.5% increase over 2020 when the average cost was $7.13 million. It isn’t only the individual practice that’s affected, but the industry as a whole. In 2019, data breaches cost the healthcare industry a total of $4 billion, with individual organizations paying around $423 per patient record, not including HIPAA fines and costs from lost productivity. What’s worse is that the financial impact of a data breach can be felt for years.

How much should I budget for cybersecurity?

Cybersecurity spending is normally tied to a company’s IT budget. In general, businesses average about 10% of their annual IT budget going towards cybersecurity, but this amount can range between 6 and 14%. When determining your specific organization’s cybersecurity budget, you should consider a few factors beginning with your industry and the size of your practice. Given healthcare’s place as a top target for cyber-attacks, you will likely want to err on the higher end of a potential investment for cybersecurity. Next, consider security regulations that require your compliance. In healthcare this will include HIPAA. The level of data sensitivity is another consideration, which in the healthcare space, is very significant. Finally, consider any stakeholder or customer requests regarding security. By analyzing these factors in your business, you will be able to determine the right budget amount for cybersecurity for your practice specifically.

How do I calculate ROI for cybersecurity?

As with any other expense, you’ll want to make sure that cybersecurity brings a return on the investment you’re making. With cybersecurity, your ROI will come in the following forms:

  • Reduction in risk to the business
  • Regulatory compliance
  • Reduction of costs related to cyber attacks

To put it in a simpler way, when you consider the high costs associated with data breaches and other cyber-attacks, by comparison cybersecurity is the more affordable option. Remember, a cyber attack can render your practice unable to operate for days or even weeks. This translates to an extreme loss of revenue which can have a long-lasting negative impact on your practice.

Inadequate cybersecurity can cost your practice and patients dearly if you should experience a data breach or other cyber-attack. This is why investing in cybersecurity is imperative for all healthcare organizations. Many practices find this task to be intimidating, but that’s why SolutionsHub has vetted the best possible vendors to keep your data safe. Check out the links below to find the right solution for your practice.