Experts doubt Anthem breach will boost security spending

Eighty million Americans had sensitive personal and financial data stolen in the recent gigantic data breach at health insurer Anthem. But experts say even that horrifying event may not be enough to convince healthcare organizations to step up their spending and reverse their chronic underinvestment in information technology security.

“I'd like to think so, but I'm not sure,” said Michael “Mac” McMillan, CEO of CynergisTek, an Austin, Texas-based security consultancy. There are still “far too many people” making spending decisions who don't see paying for security as an ongoing cost of doing business, he added.

The unprecedented data loss reported at Indianapolis-based Anthem is 16 times larger than the previous record for a healthcare data breach and affects about 25% of the U.S. population. Even before the Anthem debacle, there had been 1,172 breaches large enough to expose 500 or more individuals' records, or 40.9 million individuals' medical records in all, according to the breach list compiled by the HHS' Office for Civil Rights.

Although a massive security breach like Anthem's seems as though it would spark a consumer uprising that would force healthcare leaders and elected officials to act, it probably won't, cybersecurity experts say. “I'll be surprised if this will be a Chernobyl,” said Fred Cate, a law professor at Indiana University and a cybersecurity expert.

“Perhaps it hasn't really sunk in with the public to ask their lawmakers to do something about it,” said Lillian Ablon, a cybersecurity expert at RAND Corp. For most people affected by security breaches, there hasn't been “a big hurt,” she noted. All they face is the inconvenience of changing some accounts. The few who have become victims of financial and identity fraud are “such a small percentage that it hasn't reached critical mass yet,” she said.

What will it take? “When we see a cyberattack that results in (automated teller machines) not working,” Cate said. “That will bring it home as a real threat.”

For years, healthcare officials have worried out loud that privacy and security breaches could undermine public support for a federal program to accelerate the shift from paper to electronic health-record systems. But for just as long, healthcare spending on security has lagged behind security spending in other industries.

Recent survey reports from the Healthcare Information and Management Systems Society peg average healthcare organization spending on security at about 3% of their IT budgets. That's too low to get the job done, McMillan said. “People in healthcare just have to wake up,” he said. Healthcare data is “a lucrative target for these guys.”

A study released last summer by the Ponemon Institute found that in 2012 and 2013, 90% of healthcare organizations saw their patients' data exposed or stolen. And yet, only 23 instances of privacy and security rule violations under the Health Insurance Portability and Accountability Act have led to financial penalties or agreements with monetary settlements, according to federal statistics.

Dr. James Madara, CEO of the American Medical Association, expressed hope that the recent breaches will lead to greater security spending. Data security hasn't made many top-five problem lists among healthcare organizations, Madara said. The Anthem breach “will bring some light to that. If cybersecurity isn't something that's at the top of your list as an insurer or an integrated system, it has to get there very quickly.”

Dr. William Bria, president of the Association of Medical Directors of Information Systems, said the industry's inadequate approach to security must change. “If they just fire a couple of guys on the technology side, it won't solve anything,” he said.

Government investigations also could force the industry to beef up its security spending. “I wouldn't be surprised if HHS and the attorney general, or both, come in with some very serious investigations,” Cate said.

McMillan said he sees some signs of progress. “We have seen an uptick in security spending, at least in the last six months,” he said. “This may well be the incident that makes people say, 'We have to do something.' ”

Follow Joseph Conn on Twitter: @MHJConn