The healthcare industry remains a prime, ideal target for cyber threat actors. Cybercriminal threats find numerous ways into any network or system to attack, steal, and possibly demand money. Such outsider threats target healthcare organizations for the value of their vulnerable, sensitive protected health information (PHI) and excessively weak attack surfaces.
The average cost of a healthcare data breach in 2025 is so far $7.42 million. Given that outsider threats have sharply increased in recent years and this high price tag, healthcare organizations need to understand more about outsider incidents to learn how to avoid the threat and/or the aftermath in case they do occur.
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The Health Insurance Portability and Accountability Act (HIPAA) sets the rules and regulations surrounding access to and disclosure of PHI. The HIPAA Privacy Rule establishes the national standards to protect PHI, while the Security Rule creates a framework for the defense of electronic PHI (ePHI). Healthcare organizations must prioritize HIPAA compliance by using strong security measures to enhance data confidentiality.
HIPAA compliance promotes strong security, especially as data breaches in the healthcare industry increase. According to reports, the total number of individuals affected by healthcare data breaches from 2005 to 2019 was 249.09 million. Of these, 157.4 million individuals were impacted in the last five years alone. New data also shows that healthcare data breaches exposed 170 million records in 2024.
Common examples of breaches that result in exposed PHI include accidental disclosures, theft, lost, or stolen devices, hacking incidents, and phishing/ransomware attacks. The two most widespread types of healthcare breaches are hacking/IT incidents and unauthorized internal disclosures or insider threats. No matter the type, a data breach can have far-reaching consequences and can cause serious accountability and responsibility issues for an organization.
An outsider threat refers to an unauthorized security risk that comes from outside of an organization. Unlike insider threats, an outsider threat cannot be accidental, as a hacker or cyberattacker is deliberately trying to enter a healthcare system for self-fulfilling reasons such as financial gain, cyber espionage, cyber warfare, or hacktivism. Along with the desire to acquire access to PHI, outsider threats occur because of a lack of cybersecurity, the use of outdated systems and software, and even the inability to properly follow regulations (e.g., HIPAA).
Statistics on healthcare outsider threat breaches show that in 2023, 20-30% of hospitals experienced an increase in fatalities because of a cyberattack. The skills and resources of threat actors can vary widely, allowing them to perform simple scams to a highly sophisticated exploit. In some ways, all such attacks seem to use a form of social engineering, where an attacker uses deception and manipulation to get an individual to do what they want.
Healthcare outsider threats typically involve hackers or cybercriminals using various exploit methods to gain access to PHI.
Phishing: the most prevalent form of cyberattack. It involves attackers using fear and threats to create a sense of urgency, tricking someone into sharing confidential information.
Malware: can be installed on systems through phishing emails, malicious websites, or infected USB drives. Once inside, malware can steal sensitive data, disrupt operations, and even hold data hostage through ransomware attacks.
Ransomware: a type of malware that involves encrypting an organization’s data and demanding a ransom for its release. Healthcare institutions often feel compelled to pay the ransom to regain access to patient data and avoid disruptions to patient care.
Distributed denial of service (DDoS): used to overwhelm a healthcare organization’s network, rendering the network/organization inaccessible and disrupting operations. In some instances, attackers may resort to extortion.
No matter the tactic used to get inside a healthcare system, outsider threats are an immense risk to the well-being of patients, their PHI, and to healthcare organizations themselves.
In the first six months of 2025, more than 29 million individuals were impacted by healthcare data breaches. Moreover, the top nine of the ten largest breaches were the result of hacking or IT-related incidents. One of the biggest breaches from this year happened at Yale New Haven Health System in March 2025.
Yale New Haven Health System is a major nonprofit in Connecticut. According to the health system, an unauthorized third party gained access to its network and its patient records. Hackers were able to access such PHI as patients’ names, addresses, birthdates, phone numbers, email addresses, Social Security Numbers, and patient information. Over 5.5 million individuals were affected.
Hackers often target valuable data, including personal information and intellectual property, which can be sold on the black market for substantial profits. Cyberattacks pose a major threat to the healthcare industry, especially since cyber fraud and data theft are more common than ever. Dealing with the aftermath of a breach can be expensive, with costs ranging from violation penalties and attorney fees to investing in a more efficient security plan.
A security breach, therefore, jeopardizes revenue streams and leads to various other financial losses. Moreover, whether deliberate or accidental, HIPAA violations can result in costly civil and criminal penalties for providers and their business associates. Beyond the direct financial costs of a data breach, healthcare organizations face a variety of issues. Several other short-term and long-term consequences can directly harm an organization:
As for patients, they can face identity theft, financial loss, and discrimination from the misuse of their data. In other words, the costs have a direct impact on patient care and patient outcomes, leaving providers with the daunting task of rebuilding patient trust and organizational reputation.
Healthcare organizations can begin to reduce the impact of an outsider breach by updating and implementing rigorous security measures. Organizations must also employ measures to halt potential harm, such as retrieving sensitive information from the affected system and providing emergency training to staff. They should also conduct thorough security audits and compliance reviews to identify vulnerabilities further.
After detection and investigation, organizations must also follow the Breach Notification Rule and notify affected individuals, OCR, and the media. Swift and transparent communication helps lessen the fallout and indicates an organization’s commitment to rectifying a breach and ensuring it does not occur again.
Proper mitigation after a breach can keep more patient data from being exposed and protect a healthcare organization from committing a HIPAA violation.
HIPAA compliance involves continuously updating security measures to protect sensitive health information and to avoid breaches like outsider threats. One of the first steps toward HIPAA compliance is conducting a risk assessment. This assessment helps identify vulnerabilities and develop strategies to address them. Other steps to avoid outsider threats include:
HIPAA compliance regulations aim to protect patient and employee health information. Adhering to HIPAA standards helps providers protect patient privacy, leading to strengthened relationships and better patient outcomes.
A data breach occurs when sensitive, protected, or confidential data is accessed, disclosed, or stolen without authorization.
Cybersecurity involves protecting computer systems, networks, and data from digital attacks, unauthorized access, and damage. In healthcare, it is necessary to safeguard PHI and ePHI. Effective measures help keep sensitive patient data confidential, secure, and compliant with HIPAA regulations.
Regular backups, incident response plans, and phishing detection tools reduce the impact of ransomware.
HIPAA’s breach notification requirements mandate that healthcare providers, insurers, and their business associates must notify affected individuals, the Department of Health and Human Services, and sometimes the media, within 60 days of discovering a data breach involving protected health information.