As of late, cyberattacks have reached an all-time high in the healthcare industry. In July of 2022, a cyberattack and data breach at a healthcare organization resulted in a $100 million loss in revenue,1 and according to U.S. government data, in 2022, healthcare breaches are rising significantly.2
Because of this, third-party risk management (TPRM) is more important than ever for your healthcare organization. TPRM programs can help healthcare organizations address issues such as cybersecurity, reputation protection, patient trust preservation and more.
The first step: Identify your vendors
The first step in implementing a TPRM program is to identify all your vendors and the products or services they provide to your healthcare organization or your patients. Your Accounts Payable department can provide a vendor list, since they have records of all companies, entities and consultants billing your organization.
Make sure your high-risk vendors are identified and prioritized. Typically, these vendors require access to confidential patient data to provide a product or service. Due to HIPAA rules, these vendors will become known as Covered Entities or Business Associates. Once you’ve established your vendor inventory, you’re one step closer to managing third-party risks effectively.
Implement a TPRM program through the TPRM lifecycle
The next step is to implement a strong TPRM program. The best method for implementing such a program is to follow the TPRM lifecycle stages and activities. Using the third-party risk management lifecycle as a guide, your organization can minimize vendor risk by ensuring the right risks are identified, assessed and managed at the right time.
The TPRM lifecycle encompasses the following stages:
You can easily determine criticality with three questions:
If you answered “yes” to any of those questions, you have a critical vendor!
As the three stages occur, oversight and accountability, documentation and reporting, as well as independent review, also support and guide the TPRM lifecycle. This means that roles are established and defined, including who will oversee the program and process, and that there are governance documents that define the process, including policies and procedures. Internal audit teams should also assess the program periodically to determine if it meets expectations or if it requires improvement.
Whatever the industry, establishing a solid TPRM process and strong program management and oversight roles is essential. Well-written and accessible program policies and procedures that follow the TPRM lifecycle stages and activities will help your organization successfully manage its vendor risk.
To learn more about TPRM, visit Venminder’s resources library and blog.
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