8 Common Mistakes in Healthcare Vendor Risk Management
By Zachary Amos
Healthcare organizations often rely on third-party vendors for information technology and various products and services. Yet this dependence carries significant cybersecurity and management risks. From data breaches to compliance issues associated with vendors, healthcare companies must prioritize regulatory and operational vulnerabilities.
Being aware of the most common mistakes in healthcare vendor risk management and establishing a set of robust protocols are an organization’s best line of defense against disruptions.
1. Inadequate vendor due diligence
Healthcare organizations must carefully vet vendors before partnering with them, ensuring they have proper security measures in place and up-to-date compliance credentials. This requires them to review their history of breaches, financial standing and regulatory certifications to avoid risking exposure of patient information.
According to the American Hospital Association, 80% of stolen health records were taken from third-party vendors, software services, business associates and other non-hospital providers in 2024. More than 90% of these records were reported stolen outside of electronic health record systems, while 100% of the stolen data was not encrypted.
2. Overlooking ongoing monitoring
Practicing due diligence and screening vendors is not a one-time event. Organizations must regularly monitor their performance and security posture to identify potential risks.
Regulations and security threats are constantly evolving, so third parties need to remain proactive and continually enhance their efforts. Risk assessments, automated monitoring tools and transparent communication rules can help manage vulnerabilities and guarantee compliance. Ongoing oversight will better protect organizations and their patients’ data while strengthening relationships with vendors.
3. Vague contractual obligations
Contracts must clearly define the organization’s and vendors’ responsibilities, underscore key data protection requirements, and outline the response plan in the event of a breach. If the terms are too ambiguous, both parties risk uncertainty in accountability and compliance.
For instance, mismanaged incidents may not comply with the Health Insurance Portability and Accountability Act (HIPAA), leading to costly legal disputes. To avoid this, organizations should specify security protocols, audit rights, and remediation and reporting procedures thoroughly in the contracts, setting clear expectations for performance and enforcement.
4. Poor assessment of data security and privacy practices
Cybercrime in healthcare is rising, with over 51 million patient records compromised in 2022. These events can significantly erode trust between individuals seeking care and their providers.
Many organizations fail to assess their data security and privacy practices, leaving them vulnerable to potential data breaches and hacks. Measures often include conducting audits to identify weak spots within their vendors’ cybersecurity. Observing network activity and system logs can also help detect unusual behaviors early, allowing for rapid intervention.
5. Ignoring regulatory and compliance risks
Overlooking regulatory and compliance risks when managing third-party vendor partnerships may expose a healthcare organization to costly penalties, operational disruptions and a poor reputation.
Third-party vendors are typically required to adhere to HIPAA and the Health Information Technology for Economic and Clinical Health (HITECH) Act. If they fail to do so, the company may be held liable for violations, including those resulting from external breaches. It is essential to inquire about the compliance posture and request security documentation for verification.
6. Neglecting risk-based vendor segmentation
Segmenting vendors based on risk takes time, but it is a crucial measure for ensuring resources are allocated appropriately. Not all suppliers handle sensitive patient data or provide clinical software, which means they may pose a lesser risk of vulnerabilities.
Organizations should avoid wasting money, time and effort to ramp up oversight for low-risk partners. Effective segmentations enable more focused assessment and tailored monitoring and controls over data security and patient safety.
7. Insufficient incident response planning
Organizations that lack an incident response plan leave themselves vulnerable to breaches and disruptions. Parties may face uncertainty and delays when addressing a cybersecurity event or compliance violation, which may worsen the impacts and prolong recovery.
The most effective plan sets clear parameters for roles, communication channels and initiatives that involve all parties. It ensures everyone understands their responsibilities in an emergency, helping to protect patient data from threats and reducing downtime.
8. Failing to leverage technology and tools
Relying on manual practices to manage vendors and mitigate risks is the surest way to fall victim to a security breach. Organizations must invest in cutting-edge technology and tools to alleviate administrative burdens and monitor vulnerabilities.
Using manual spreadsheets may result in missed deadlines or overlooked critical tasks for compliance purposes. It could also leave significant gaps in documentation.
Practical tools and resources for improving vendor risk management
Healthcare organizations have several tools and resources they can employ to enhance vendor risk management. The National Institute of Standards and Technology’s Cybersecurity Framework enables businesses to understand, mitigate, and limit their cybersecurity risks while improving their network and data security. Although the initiative is voluntary, it allows organizations to adopt a set of best practices for optimal protection.
The Health Information Trust Alliance (HITRUST) Common Security Framework is another globally recognized and certifiable framework that enables organizations to boost their risk management and compliance efforts. The system unifies security controls into a single, adaptable standard so healthcare companies can protect sensitive data more seamlessly. The system underwent updates in 2023 to stay abreast of emerging trends.
Vendor risk management platforms enable professionals to centralize documentation, monitor compliance and get notified about potential vulnerabilities as they occur. Additionally, teams should utilize self-assessment templates, checklists and other guidelines to build resilience and improve vendor programs.
Building a resilient vendor risk management framework
A robust vendor risk management framework is vital for all healthcare organizations to protect their patients’ information, adhere to compliance regulations, and uphold their services and reputations. Implementing stringent processes and employing industry best practices and technological solutions reinforces quality assurance and care.
Zachary Amos is a tech writer who covers healthcare IT, cybersecurity, and artificial intelligence. He has bylines on HIT Consultant, Health IT Answers, and VentureBeat, and he is the Features Editor at ReHack Magazine. For more of his work, follow him on LinkedIn or X.