Cybersecurity Risks in Healthcare M&A: A Nightmare Scenario

Healthcare M&A Deals: The Hidden Cybersecurity Risks

When it comes to mergers and acquisitions in the healthcare sector, cybersecurity risks are often overlooked. Kevin Ricci, a cybersecurity expert, warns that failing to properly assess cybersecurity risks during the M&A due diligence process can turn a dream deal into a nightmare scenario.

With the average time to detect and contain a data breach being 277 days, an intruder could go undetected for months, potentially compromising sensitive health information. This is especially concerning in the healthcare sector, where the average cost of a data breach is over $10 million.

One example of the risks involved in healthcare M&A is a ransomware attack on a Chicago-based hospital chain that impacted millions of patients due to data being shared across multiple hospitals. As healthcare organizations grow through M&A activity, the risk of a large-scale data breach increases.

To mitigate these risks, Ricci recommends conducting a focused cybersecurity and technology assessment during the due diligence process. This assessment can identify any vulnerabilities and provide a plan and costs to address them. Citrin Cooperman offers a proprietary risk assessment tool called the SCORE Report to help evaluate and mitigate cybersecurity risks in healthcare M&A deals.

Taking a proactive approach to cybersecurity risks during M&A transactions is crucial in avoiding costly surprises after the deal is completed. For more information on evaluating technology or cybersecurity risks during the M&A process, contact Kevin Ricci at kricci@citrincooperman.com.

It is essential for healthcare organizations engaging in M&A activity to prioritize cybersecurity to protect sensitive patient information and avoid potential breaches that could have far-reaching consequences.