How to Manage Third-Party Risks in the Healthcare Industry?

Data breaches have become common to hear about these days. The significant reasons are weak security, associating with third parties, and not accurately carrying out risk assessment and management. Every industry has seen the effects of data breaches up close, and healthcare is no exception. According to a survey, over 1 million people were affected in 2020 because of data breaches in healthcare organizations. Healthcare providers rely more on third-party vendors to handle their daily operations, improving the security of protected health information (PHI) or streamlining patient care. While working with vendors has undeniable advantages for medical facilities, it can also pose risks to vendor compliance and information security. Thus, having a solid compliance management system  will go a long way to mitigating and eliminating threats as early as possible.

The Rising Influence of TPRM in the Healthcare Industry

Medical facilities with subpar or non-existent risk management systems are exposed to third-party liabilities as the healthcare industry continues to undergo digital transformation.

Because patient information is valuable, cybercriminals frequently target the healthcare industry.

Vendors frequently have access to PHI and other valuable data. Still, they adhere to less stringent security and compliance standards than healthcare facilities, making them vulnerable to attack without proper risk management.

Due to a lack of automation, the highly-priced risk assessment programs, and the partial or non-deployment of security controls in healthcare organizations, many risk management programs fail to meet the industry’s cybersecurity requirements.

Critical Elements in Healthcare for Third-Party Risk Management

The goal of third-party risk management in healthcare is to empower providers to minimize the risk from third parties and, thus, better protect their data. Here are the key elements to include when choosing your TPRM program:

• Third-Party Risk Assessment: Healthcare organizations must conduct a third-party risk assessment in addition to their due diligence. Vendor risk assessments analyze the connection and risks associated with their services and create strategies to deal with them. To eliminate immediate threats, short-term and long-term measures must be implemented.
• Vendor Questionnaires & Due Diligence: Healthcare organizations must thoroughly conduct due diligence on all vendors. It enables them to evaluate each vendor’s security risk to the company’s network and data security. Due diligence typically involves evaluating and comparing a vendor’s security setup with industry standards. The vendor’s data security procedures, business recovery plans, and disaster recovery plans should all be covered in the questionnaire.
• Vendor’s Cybersecurity & Governance: While performing due diligence on the vendors, the organizations must also ask questions about the network and perimeter security, firewall protection, access control, vulnerability scans, etc. Based on this, assess their level of cyber defense and governance.

Best TPRM Practices for Healthcare

The following are some best practices that businesses can use:

• Perform a vendor security risk analysis.
• Establish a policy and procedure that coordinates with the staff or departments in charge of business associate agreements, vendor security risk assessment, and third-party contracting.
• Inform business owners of the organization’s policy and procedure.
• Create a committee or governance structure that evaluates each business owner’s request to enter into a contract with a vendor handling PHI.
• Make a list of all your connections with third parties.
• Identify every vendor cybersecurity risk your company may face.
• All vendors should be evaluated and segmented based on potential risks and plans to address any risks that exceed your organization’s risk appetite.
• Create a framework for third-party risk management based on rules.
• Determine who is responsible for third-party management strategies and procedures.

How to Conduct TPRM in the Healthcare Industry Effectively?

Practical risk assessments must be incorporated into a third-party risk management program to benefit your healthcare organization. The four steps listed below can be used to create thorough risk assessments:

1. Define Your Risk Criteria

Before getting into risk assessment or creating a TPRM program, you must first establish the standards by which you will assess the risks. You can develop evaluation criteria by knowing your organization’s risk tolerance levels and appetite. The level of risk can define the risk appetite of your organization that your organization is willing to accept to accomplish its objectives. In contrast, risk tolerance gauges how much risk your business can accept before failing. These two metrics will primarily concentrate on PHI and compliance risk for healthcare providers.

2. Vendor Classification

Vendor classification is the next step in the assessment process. Every vendor poses a different level of risk to your company, as their roles vary. So you must categorize them according to your risk standards, roles, and criticality. Vendors can be categorized in addition to the risk they pose based on the data they handle.

3. Due Diligence & Assessment

After classifying your vendors, you can administer the evaluation. These can be completed on-site or online using questionnaires. Although resource-intensive, on-site assessments provide the most accurate results. While questionnaires are simpler to administer, confirming the integrity of the responses can be challenging.

4. Risk Management

Addressing identified vendor risks is the last step in the assessment process. Create a remediation plan with your vendors once the risks have been identified. This should include a schedule for remediation as well as a list of actions vendors can take to address risks that have been identified. Depending on the risk’s seriousness and the number of issues, you can use different plans. Make sure vendors are monitored as they address risks by implementing a monitoring system. Vendors can call you weekly to let you know how they are progressing with remediation.

Conclusion

Continuous third-party risk monitoring is crucial to securing sensitive patient data as cyber threats develop and healthcare networks become more complex. The compliance solutions for the life sciences sector will result in better protection of crucial patient data and a safer world.