How to Ensure Data Security in Healthcare Software Outsourcing

The recent breaking news about a data breach at Personify Care, a trusted third-party provider of digital patient pathways for SA Health, has sparked concerns regarding the security of outsourcing healthcare software development projects. The breach resulted in the deletion of the health information of 121 patients, and this is not the only case. According to the Cybersecurity Outlook 2022, the prevalence of indirect cyberattacks and successful breaches that target businesses through third-party entities has risen from 44% to 61% in recent years.

Healthcare providers and technology companies must protect the privacy of patient records, financial information, and medical histories. That requires rigorous security measures when outsourcing healthcare software development tasks to third parties.

Read on to learn more about how companies can ensure data security while realizing the benefits of outsourcing in healthcare software development.

Why Is Data Security Essential in Healthcare Software Development?

In healthcare software development projects, companies must prioritize secure data sharing exclusively with authorized entities. Failure to do so can result in legal violations, leading to penalties, fines, and liability lawsuits in multiple countries.

For example, violations of HIPAA can incur significant financial penalties for businesses, ranging from $100 to $25,000 per violation each year. Moreover, the costs associated with crisis management and reparations for data breaches can reach millions of dollars.

Why Is Data Security Essential in Healthcare Software Development?

And it’s more than just fines. Healthcare data breaches also jeopardize patient privacy and the delivery of healthcare services. These breaches can lead to unauthorized access, theft, or exposure of sensitive patient information, which can have severe consequences for individuals and organizations alike. Data breaches can also disrupt care delivery, as healthcare providers must allocate valuable resources to address the aftermath of the breach, such as investigating the incident, notifying affected individuals, and implementing stronger security measures.

Therefore, by implementing robust security measures while outsourcing healthcare software development, organizations can significantly enhance the trust and confidence of their patients. This reduces undesired expenses and loss of profits. Studies show that 66% of individuals would switch healthcare providers if their payment information or personally identifiable information (PII) was compromised in a data breach resulting from poor security practices. This highlights the utmost importance of prioritizing data security in healthcare software development, especially in terms of customer retention.

What Are the Data Risks When Outsourcing?

The decision to entrust data to an external party could expose it to various vulnerabilities. You must understand and manage these risks to safeguard sensitive information and maintain data integrity. Healthcare organizations should consider several concerns when outsourcing healthcare software development projects.

What Are the Data Risks When Outsourcing?

Unauthorized Access

Outsourcing healthcare software development projects present challenges in monitoring and managing, increasing the risk of unauthorized access and data breaches through the increase in privileged credentials. When outsourcing providers don’t implement stringent security measures, unauthorized individuals can gain access to private information, potentially leading to data breaches and identity fraud.

A common incident contributing to these risks is the mishandling of protected health information (PHI). Under the HIPAA Privacy Rule, covered entities must implement measures to protect PHI from improper use or disclosure. However, this mistake often occurs due to human error, such as when the healthcare software development partner allows additional developers access to patient information without legal approval from the clients. In such cases, the outsourcing entity will be held responsible for committing unauthorized access faults.

Data Theft and Breaches

Data breaches have compromised more than 15 million healthcare records. This number reflects a common lack of sufficient controls with outsourcing partners, particularly during the offboarding process. Additionally, contractors may not consistently adhere to the rigorous security protocols expected of an in-house team.

Cybercriminals can exploit this vulnerability, leading to malicious activities like fraud, account abuse, identity theft, and account takeover attacks. These data breaches lead to significant financial losses, reputational damage, and legal consequences. They also cause considerable distress to individuals. Fifty percent of the breach victims have experienced medical identity theft, resulting in an average out-of-pocket cost of approximately $2,500 per incident.

Loss of Data Control

Outsourcing the development and operation of a company’s information system can potentially result in a loss of data control. When a vendor becomes the sole decision-maker for healthcare software development projects, the company is compelled to accept the technology provided by the vendor. As a consequence, the company may find itself with limited control and visibility over how the external party handles and secures its data.

Outsourcing healthcare software development also means depending on third-party data control practices. This can increase expenses and even cause a loss of data control, which can hinder decision-making and compromise healthcare operational efficiency.

Finally, varying data protection regulations across different countries can pose significant challenges in achieving consistent management of data input for outsourced healthcare software development teams.

Regulatory Compliance Violations

Non-compliance with government laws, industry regulations, or internal company protocols by third-party vendors can lead to adverse consequences. This can occur because of deliberate vendor disregard or just a lack of awareness regarding existing regulations.

Healthcare regulatory compliance is more complex than in any other industry, which can be overwhelming for people and companies without prior experience in the field. Healthcare entities must comply at a minimum with HIPAA, the HITECH Act, HL7, other regional regulations, and fraud and abuse laws. Failure to outsource to the right company can prompt significant financial and reputational penalties for non-compliance.

How to Ensure Data Security When Outsourcing

We’ve outlined the risks and challenges. Now let’s look at strategies for preventing data security incidents when outsourcing healthcare software development:

How to Ensure Data Security When Outsourcing

Enacting a Comprehensive Contract

A comprehensive healthcare software development outsourcing contract defines and limits activities to meet the specific demands of each organization. These agreements serve as evidence of the parties’ intentions and their complete comprehension of the healthcare outsourcing process. These agreements should clearly outline the usage, sharing, and transfer of data, aligned with the specified purposes for the healthcare software development projects.

Parties should also sign a non-disclosure agreement (NDA) to ensure utmost data protection. The NDA helps impose strict adherence to data regulations, both during and after contract implementation. It also mitigates unauthorized access to sensitive healthcare information and establishes penalties for any breach. Therefore, signing the NDA helps organizations ensure the protection of confidential data, even when this data lies beyond your organization’s scope of work and control.

A contract also establishes explicit expectations in healthtech partnerships. These expectations encompass transparency, compliance, and effective communication. They outline the roles, timelines, project scope, and data ownership for each member involved to minimize the risks of data leakage.

Understanding and Constantly Reviewing Healthcare Compliance Regulations

To effectively manage outsourced partners, organizations must thoroughly understand regulatory requirements. This helps companies establish clear guidelines and expectations for outsourcing partners. Additionally, it facilitates the early detection of any breaches that may occur during the outsourcing process, enabling prompt correction.

Before outsourcing, healthcare software development teams must pay careful attention to these foundational regulations within the industry:

  • The Healthcare Information Portability and Accountability Act (HIPAA): HIPAA establishes industry-wide standards for safeguarding patient health information, serving as a crucial pillar in data privacy. To ensure HIPAA compliance, healthcare software development companies can use the HIPAA Checklist to review products and assess the final product.
  • The Health Information Technology for Economic and Clinical Health Act (HITECH): HITECH promotes standardized electronic health records and strengthens enforcement of HIPAA rules. It addresses privacy concerns and imposes stricter penalties for breaches.
  • Health Level 7 (HL7): HL7 is a messaging standard that promotes interoperability among healthcare providers, enhancing patient care.

Implementing Robust Data Protection Measures

As technology advances, the demand for more advanced data security solutions increases. Before granting access to sensitive healthcare data, verify that outsourcing partners apply advanced software security tools and protection methods. Outsourcing providers should have the necessary tools to mitigate viruses and spyware, along with an established action plan for cyber attacks.

To optimize data security, conduct regular penetration tests to identify security vulnerabilities. Healthcare organizations should also allocate time for regular assessments of emerging technologies and ongoing monitoring of security risks.

Collaboration with third-party data service providers, including SaaS platforms involved in data collection and data entry outsourcing, is essential to stay aware of evolving threats in healthcare.

Frequent Employee Training

While the outsourcing party holds primary responsibility for safeguarding data, you must train your internal team on the newest data security measures. This facilitates a smooth transition when transferring and handling data to a third party, minimizing the risk of data breaches.

Specifically, supervisors should possess a comprehensive understanding of regulations to detect potential threats during the outsourcing process. Organizations should adhere to the following guidelines:

  • Conduct continuous data security training.
  • Stay updated with compliance and regulatory procedures specific to healthcare and ensure employees are well-informed about them.
  • Promote a culture where employees feel encouraged to report any security concerns or incidents.
  • Regularly evaluate employee handling of customer healthcare data through comprehensive audits.

Choosing Trusted Vendors With a Solid Data Security and Confidentiality Track Record

Healthcare outsourcing involves entrusting sensitive data and information to a third-party vendor. Companies must exercise utmost caution when selecting a healthcare software outsourcing partner that will have direct access to these resources and carry out various data processing tasks that may go unnoticed.

To assure security and compliance with regulations like GDPR or HIPAA, companies should prioritize partnering with reputable vendors that have robust data security measures and a proven track record of regulatory compliance. When evaluating potential healthcare software development outsourcing partners, also consider factors beyond just project costs and timelines:

Industry Expertise and Experience

When evaluating potential healthcare software outsourcing partners, assess their expertise and experience. Look for partners with a proven track record in healthcare software development projects, preferably within your specific domain. Assess their technical skills and experience in data handling and knowledge of healthcare regulations by reviewing their portfolio, case studies, and client testimonials.

Communication and Collaboration Capabilities

Efficient communication and collaboration forge successful partnerships with outsourced healthcare software developers. Clear expectations about data protection promote transparency in data supervision and facilitate incident resolution. Evaluate the potential partner’s capability to effectively communicate and collaborate with clients.

When seeking outsourcing partners, prioritize those who are responsive, proactive, and possess strong communication skills. A reliable healthcare software development outsourcing partner should consistently provide project updates, promptly address concerns, and maintain transparent communication throughout to assure security and quality results.

Infrastructure and Technology Capabilities

Thoroughly assess the infrastructure and technological capabilities of any potential healthcare software development partner. Verify access to essential hardware, software, and development tools. Ensure that these outsourcing partners adhere to cybersecurity and data protection best practices. This builds confidence that your development partner will safeguard intellectual property and prioritize patient data privacy.

Assure Rock-Solid Data Security with KMS Healthcare as Your Outsourced Software Development Partner

With more than a decade of specialized expertise in healthcare technology development and compliance, KMS Healthcare is your trusted, reliable outsourcing partner for healthcare software development.

Contact us to connect with our team of healthcare experts today.

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