Top Factors that Put Healthcare Sector at Risk from Ransomware Attacks

The healthcare sector faces a variety of cybersecurity threats that continue to evolve in complexity and impact - the most concerning being ransomware attacks, data exfiltration, supply chain attacks, legacy system vulnerabilities, and cloud security risks.  

Ransomware Attacks

Ransomware attacks that encrypt a healthcare organization's data, rendering it inaccessible until a ransom is paid, disrupt critical services, delay patient care, and compromise sensitive information. Researchers have already documented the consequences ransomware attacks have on patient outcomes, and now we see evidence of impact to patient care not only at the affected facilities, but also in the regional healthcare ecosystem.    

One study found a direct link between ransomware attacks and negative patient outcomes, with increased mortality rates and more complications in medical procedures at hospitals who have been the victim of a ransomware attack. Another study found that between 2016 and 2021, ransomware attacks contributed to between 42 and 67 patient deaths, as well as a 33% increase in death rates per month for hospitalized Medicare patients being treated at facilities that have suffered a ransomware attack.  

The immediate impact on the affected hospital is clear, with critical systems being rendered inoperable, leading to delays in care, breakdowns in communication, and an increased risk of medical errors. However, the damage does not stop there—it cascades across the entire regional healthcare system, impacting neighboring hospitals and patient outcomes on a regional scale. When a hospital falls victim to a cyberattack, neighboring facilities must absorb diverted patients, often without additional resources to handle the surge.    

This sudden influx strains emergency departments, overwhelms medical staff, and reduces the availability of critical care services, ultimately delaying treatment for all patients—whether they arrive due to the cyberattack or for unrelated emergencies. The overflow effect forces hospitals to operate beyond capacity, degrading the quality of care, prolonging wait times, and heightening the risk of complications or preventable deaths.  

This "blast radius" effect demonstrates how a single ransomware attack can jeopardize an entire regional healthcare network. Research has already linked cyberattacks on hospitals to increased mortality rates, not just at the compromised facility but also at surrounding hospitals struggling to compensate for the disruption.  

Exfiltration of Protected Health Information (PHI)

The exfiltration of PHI during ransomware attacks can lead to significant legal and regulatory repercussions under the Health Insurance Portability and Accountability Act (HIPAA). The U.S. Department of Health and Human Services (HHS) considers the presence of ransomware as a security incident that may result in an impermissible disclosure of PHI.  

Ransomware attacks and other network intrusions targeting healthcare providers frequently involve unauthorized access to or disclosure of Protected Health Information (PHI), which includes sensitive patient data such as medical histories, Social Security numbers, and insurance details.  

Organizations that fail to secure PHI may face severe legal and regulatory consequences. Under the Health Insurance Portability and Accountability Act (HIPAA), violations can result in civil and criminal penalties, depending on the degree of negligence. A notable example is Anthem Inc., which agreed to a $16 million settlement with the U.S. Department of Health and Human Services (HHS) for failing to implement adequate security measures—marking the largest HIPAA settlement to date.

Beyond regulatory penalties, healthcare data breaches often lead to class-action lawsuits from affected individuals, compounding financial and reputational damage to an organization. A recent high-profile case occurred in February 2024, when Change Healthcare, a subsidiary of UnitedHealth Group, suffered a major ransomware attack carried out by the BlackCat (ALPHV) group. The breach compromised the personal information of over 100 million individuals, exposing health insurance details, medical records, billing data, and personal identifiers such as Social Security numbers and driver's licenses. The attackers exploited stolen credentials to gain access to the company's systems, deploying ransomware after exfiltrating sensitive data.  

Despite paying a $22 million ransom, Change Healthcare continued to receive threats of further data leaks. The attack severely disrupted nationwide healthcare operations, preventing the processing of electronic payments and medical claims—forcing patients to pay out-of-pocket for medications and placing financial strain on healthcare providers.  

In response, the HHS launched a civil rights investigation into potential HIPAA violations related to the breach. Additionally, the Judicial Panel on Multidistrict Litigation consolidated 49 lawsuits against Change Healthcare in the U.S. District Court for the District of Minnesota. These lawsuits, filed by both individual consumers and healthcare providers, accuse the company of negligence in protecting personal data and seek damages for financial losses resulting from the disruption of healthcare services.  

Supply Chain Attacks

Supply chain attacks occur when cybercriminals infiltrate an organization by exploiting vulnerabilities in third-party vendors or service providers. In the healthcare sector, these attacks often involve compromised software updates or third-party services critical to medical operations.  

One significant example is the May 2020 Blackbaud ransomware attack. Blackbaud, a third-party service provider for numerous healthcare organizations, suffered a data breach in which attackers exfiltrated sensitive patient data before the company could contain the breach. This attack affected multiple healthcare entities that relied on Blackbaud’s services.  

Although the breach originated from a third-party vendor, affected healthcare organizations remained legally responsible for ensuring PHI security under HIPAA. Failure to manage vendor risks can trigger regulatory scrutiny, result in hefty fines, and expose organizations to legal action from patients whose data was compromised.  

Legacy System Vulnerabilities

Most, if not all healthcare organizations still rely on outdated systems that are no longer supported with security updates, making them vulnerable to cyberattacks. This has created an urgent need for healthcare entities to modernize their IT infrastructure and comply with data protection laws such as HIPAA in the U.S. and GDPR in Europe.  

Failure to implement robust cybersecurity measures—including encryption, multi-factor authentication (MFA), and continuous network monitoring—can lead to consequences far beyond financial and operational disruption. Healthcare organizations may face long-term reputational damage, regulatory investigations, civil penalties, and class-action lawsuits from affected individuals.  

Moreover, organizations that fail to report breaches promptly or do not implement preventive security controls risk substantial fines, costly settlements, and potential exclusion from federal healthcare programs.  

Healthcare providers that continue using legacy systems without proper security updates may be deemed non-compliant with HIPAA’s Security Rule, which requires covered entities to safeguard electronic PHI (ePHI). Failure to address these vulnerabilities increases liability and can result in significant penalties if a breach occurs due to known security gaps.  

Cloud Security Risks

As healthcare organizations increasingly migrate to cloud-based systems for data storage and management, they face heightened security risks such as data breaches, misconfigurations, and unauthorized access. A prime example is the Accellion File Transfer Appliance vulnerability, which was exploited in a cyberattack that exposed sensitive healthcare data from multiple organizations. This breach underscored the critical need for healthcare providers to properly secure cloud environments and ensure third-party vendors maintain strict security standards.  

Under HIPAA regulations, healthcare organizations are ultimately responsible for ensuring that their cloud service providers comply with security requirements. If a data breach occurs due to cloud security failures, organizations may face substantial fines, legal action, and mandatory breach notifications to affected individuals and the HHS Office for Civil Rights (OCR).

Takeaway

The escalating cybersecurity threats facing the healthcare sector demand immediate and sustained attention. Ransomware attacks, data exfiltration, supply chain vulnerabilities, legacy system risks, and cloud security concerns all pose significant challenges that can compromise patient safety, disrupt healthcare operations, and result in severe regulatory and legal consequences.  

As cybercriminals continue to refine their tactics, healthcare organizations must proactively strengthen their security posture through robust risk management strategies, continuous monitoring, and adherence to cybersecurity best practices. The financial and reputational costs of inaction are immense, but more importantly, the impact on patient care and safety is irreversible.  

By prioritizing cybersecurity investments, fostering cross-sector collaboration, and implementing comprehensive incident response plans, the healthcare industry can better defend against cyber threats and safeguard the integrity of its critical services.

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