94% of Hospitals Report Data Breaches

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TRAVERSE CITY — The Third Annual Benchmark Study on Patient Privacy & Data Security by Ponemon Institute, sponsored by Portland, Ore.-based ID Experts, reports that healthcare organizations face an uphill battle in their efforts to stop data breaches.

Ninety-four percent of healthcare organizations surveyed suffered at least one data
breach; 45 percent of organizations experienced more than five data breaches during the
past two years.

Data breaches are an ongoing operational risk that could be costing the U.S. healthcare
industry an average of $7 billion annually.

A new finding indicates that 69 percent of organizations surveyed do not secure medical
devices — such as mammogram imaging and insulin pumps — which hold patients’
protected health information.

Overall, the research indicates that patients and their PHI are at increased risk for medical
identity theft. And risks to patient privacy are expected to increase, as mobile and cloud
technology become pervasive. For a free copy of the Third Annual Benchmark Study on
Patient Privacy & Data Security , visit http://www2.idexpertscorp.com/ponemon2012/.

Key findings of the research include:

* Data breaches in healthcare are growing.
Ninety-four percent of hospitals in this study suffered data breaches during the past two
years. Information breached is largely medical files and billing and insurance records.
According to the research, 54 percent of organizations have little or no confidence that
they can detect all patient data loss or theft. Based on the experience of the 80 healthcare
organizations participating in this research, the resulting cost to the U.S. healthcare
industry could be $6.87 billion, up from 2011. The average impact of a data breach is $1.2 million per organization.

* Patients and their information are at risk for medical identity theft.
The causes of data breach cited were loss of equipment (46 percent), employee errors
(42 percent), third-party snafu (42 percent), criminal attack (33 percent), and technology
glitches (31 percent). More than half of healthcare organizations (52 percent) had cases of
medical identity theft. Of the 52 percent of organizations that experienced medical identity theft, 39 percent say it resulted in inaccuracies in the patient’s medical record and 26 percent say it affected the patient’s medical treatment.

* Technology trends threaten current landscape.
Mobile devices in the workplace pose threats to patients’ PHI. Eighty-one percent of
healthcare organizations permit employees to use their own mobile devices—commonly
called Bring Your Own Device (BYOD)—often to access organization data. Yet 54 percent
of organizations are not confident that these personally owned mobile devices are secure.
Another technology threat gaining steam is cloud computing. Ninety-one percent of
hospitals surveyed are using cloud-based services; many use cloud services to store
patient records, patient billing information, and financial information. Yet, 47 percent of
organizations lack confidence in the data security of the cloud.

* Organizations are taking steps to detect data breaches, but majority lack budget and resources.
This past year, 36 percent of healthcare organizations have made improvements in their
privacy and security programs, in response to the threat of audits conducted by the U.S.
Department of Health and Human Services Office for Civil Rights. While 48 percent of
organizations are now conducing security risk assessments, only 16 percent are
conducting privacy risk assessments. Yet, 73 percent still have insufficient resources to
prevent and detect data breaches. And 67 percent of organizations don’t have controls to
prevent and/or quickly detect medical identity theft.

“Healthcare organizations face many challenges in their efforts to reduce data breaches,”
said Larry Ponemon, chairman and founder, Ponemon Institute. “This is due in part to the recent explosion of employee-owned mobile devices in the workplace and the use of cloud computing services. In fact, many organizations admit they are not confident they
can make certain these devices are secure and that patient data in the cloud is properly
protected. Overall, most organizations surveyed say they have insufficient resources to
prevent and detect data breaches.”

Data Breaches Are a Part of “Doing Business”
“The trend continues: data breaches are increasing, patient information is at risk, yet
healthcare organizations continue to follow the same processes,” said Rick Kam,
president and co-founder of ID Experts. “Clearly, in order for the trend to shift,
organizations need to commit to this problem and make significant changes. Otherwise,
as the data indicates, they will be functioning in continual operational disruption.”

Recommendations for Health Care Organizations
Kam offers five recommendations for healthcare organizations:
* Operationalize pre-breach and post-breach processes, including incident assessment
and incident response processes
* Restructure the information security function to report directly to the board to symbolize commitment to data privacy and security
* Conduct combined privacy and security compliance assessments annually
* Update policies and procedures to include mobile devices and cloud
* Ensure the Incident Response Plan (IRP) covers business associates, partners, cyber
insurance

Free Webinar to Discuss Research Findings
A free Webinar, “Are Emerging Technologies Putting Your Patient Data at Risk?”, featuring
the Ponemon Institute and Providence Health & Services, will be held Thursday, Dec. 6,
2012 at 1 p.m. Eastern time. To register, visit http://bit.ly/UILqao.

The Third Annual Benchmark Study on Patient Privacy & Data Security used in-depth,
field-based research involving interviews with senior-level personnel at healthcare
providers to collect information on the actual data loss and data theft experiences at their
organizations. This benchmark research, in contrast to a traditional survey-based
approach, enables researchers to collect both the qualitative and quantitative data
necessary to understand the current status of patient privacy and data security in the
healthcare organizations that participated in the study.

Ponemon Institute is dedicated to advancing responsible information and privacy
management practices in business and government. To achieve this objective, the
Institute conducts independent research, educates leaders from the private and public
sectors and verifies the privacy and data protection practices of organizations in a variety
of industries.

ID Experts delivers complete data breach care. The company’s solutions in data breach
prevention, analysis and response are endorsed by the American Hospital Association,
meet regulatory compliance and achieve the most positive outcomes for its customers. ID
Experts is a leading advocate for privacy as a contributor to legislation, a corporate and
active member in both the IAPP and HIMSS, a corporate member of HCCA and chairs the
ANSI Identity Management Standards Panel PHI Project. For more information, visit
http://www2.idexpertscorp.com/.

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