Budgeting for Cybersecurity: What Clinics Can’t Afford to Ignore
Cybersecurity is not optional in healthcare – it is essential. With increasing threats targeting provider groups and clinics, from ransomware attacks to data breaches, failing to invest in security can have devastating financial and reputational consequences. Yet, many physician-owned practices struggle to determine how to budget for cybersecurity and where to allocate those funds effectively. And, unfortunately, cybersecurity is used as a stick by vendors to sell expensive products that frequently don’t provide real protection, plus oftentimes they make life more difficult for end users, especially patients and providers.
At HealthSpaces, we take a strategic and rational approach to cybersecurity, as part of our Virtual CIO process – aligning security investments with business goals to ensure clinics remain compliant, operational and protected. Here’s how clinics should approach cybersecurity budgeting and why they can’t afford to ignore it.
The Cost of Inaction
Many clinics operate under the illusion that they are too small to be targeted or that their existing security measures are sufficient. However, data shows that healthcare remains one of the most targeted industries for cyberattacks, and yesterday’s solutions are no longer sufficient. The cost of a data breach in healthcare is the highest of any industry, averaging $10.93 million per breach in 2023, according to this IBM Data Breach Report.
Beyond financial losses, a breach can lead to:
- Patient trust erosion – Patients may leave if they feel their data is unsafe.
- Regulatory fines – Non-compliance with HIPAA and other regulations can result in hefty penalties from the Feds.
- Civil penalties – In virtually every case, after HHS/OCR comes calling, State Attorneys General and even private law firms join the bandwagon to come after you.
- Operational downtime – Ransomware attacks can bring clinic operations to a halt.
- Distraction to the management team – Dealing with all the fallout and recovery efforts detracts from taking care of patients and running the practice.
Ignoring cybersecurity isn’t just a risk – it’s a liability.
How to Budget for Cybersecurity Effectively
A strong cybersecurity strategy isn’t just about spending more money; it’s about investing strategically to maximize protection where it matters most. Here’s how clinics can take a structured approach to cybersecurity budgeting:
1. Align Cybersecurity with Business Objectives
Security shouldn’t be a standalone technology function, or an after-the-fact add-on – it should be integrated into the clinic’s overall technology and operational strategy. Our vCIO approach focuses on aligning cybersecurity investments with key business goals, ensuring that security measures support patient care, compliance, and operational efficiency.
2. Prioritize Risks and Allocate Resources Accordingly
Not all risks are equal. Start by assessing vulnerabilities in areas like:
- User vulnerabilities – Are users properly trained on an ongoing basis to detect and respond to phishing attacks? According to CISA.gov, over 90% of all breaches begin with a phishing attack on end users.
- Network security – Are systems properly segmented and monitored?
- Endpoint protection – Are all devices secured and regularly updated?
- Authentication and access control – Are staff following best practices for login credentials, including multi-factor authentication (MFA) and single sign-on (SSO)?
- Provisioning – Is this automated across the practice, with end users segmented by job role, to prevent inappropriate access?
By conducting a risk assessment, including likelihood and impact of different threats, clinics can allocate their budget where it will have the most impact.
3. Reduce Phishing by Rethinking Communication
Your employees can unintentionally be your biggest threat when it comes to data breaches, Phishing remains one of the biggest cybersecurity threats to clinics, with attackers often targeting staff via very sophisticated but fraudulent emails. Instead of relying on traditional email, which is inherently vulnerable, clinics can eliminate phishing threats altogether by using internal communication platforms like Slack, Microsoft Teams, or similar secure collaboration tools.
Internal communication platforms are not exposed to the outside – Phishing attacks typically occur via email, but platforms like Slack keep communication within a controlled, encrypted environment.
By shifting communication to a secure, internal system, clinics can dramatically reduce the risk of phishing attacks while improving workflow efficiency.
4. Invest in People, Not Just Technology
Most breaches occur due to human error, or at least human enablement. While tools such as firewalls and antivirus software are critical, so is training staff to recognize scams and follow security protocols. Allocating part of the cybersecurity budget to ongoing security awareness training can prevent costly episodes. And fortunately these solutions are relatively inexpensive, especially compared to expensive monitoring and reporting tools and services that frequently give more appearance of compliance than actual protection.
5. Implement Proactive Security Measures
Preventative security investments cost far less than responding to a breach. In addition, in the fire drill that usually follows a breach, there is precious little time to unravel the problem and look for the root cause. To be better prepared for when – not if – a security event happens, clinics should focus on:
- Extended endpoint detection and response (XDR) solutions
- Security Incident and Event Monitoring (SIEM) systems
- Ongoing penetration testing and reporting
- Application white-listing
- Business Continuity, and Disaster Recovery (BCDR) planning, including redundant systems where feasible.
A proactive approach minimizes both risks and costs in the long run. And just by doing the planning exercise, the practice can frequently identify hidden risks and take appropriate action.
6. Consider Compliance as a Cost-Saving Strategy
Regulatory compliance isn’t just about avoiding fines – it’s about ensuring best practices that inherently strengthen security. Our vCIO process helps clinics align cybersecurity with HIPAA and other regulatory requirements, reducing exposure to compliance-related penalties.
Making Cybersecurity a Business Priority
Cybersecurity isn’t just a tech issue – it’s a critical business function that directly impacts patient care, reputation, and financial health. By adopting a strategic vCIO-driven approach, clinics can make smart investments that balance security, compliance, and operational needs.
Ignoring cybersecurity is far more expensive than budgeting for it wisely. The question isn’t “Can we afford to invest in cybersecurity?” – it’s “Can we afford not to?”
Need help navigating cybersecurity for your clinic?
At HealthSpaces, we help physician-owned practices develop strategic, right-sized cybersecurity plans that protect both patients and operations. Let’s talk about how to secure your clinic’s future.
