Cyberattacks are raising health care costs

Presented by Bamboo Health: The collision of health care and technology.

Jul 27, 2022 View in browser   By Ruth Reader and Ben Leonard Presented by Bamboo Health The Big Idea The average cost of a data breach for a health care organization is more than $10 million, according to IBM's annual Cost of Data Breach Report , which looked at the period from March 2021 to March 2022. That's up 9.4 percent from the same timeframe a year earlier. Health care has had the highest breach-related damages for 12 consecutive years. Last month, Ruth reported that chief information officers of health systems want help fighting off the hackers . Insurers won't cover damages in some cases, and health systems complain they haven't had enough support from government or law enforcement. Across industries, a glaring 60 percent of organizations said they had to raise prices to cover the expense of a breach, and the regulatory compliance and legal costs can extend over years for those in health care. According to the HHS Office of Civil Rights' database, health care organizations have reported nearly twice as many breaches from January to mid-July as during the same period in 2021. And more than four in five organizations — not just those in health care — told IBM they'd experienced more than one successful attack. High-tech defenses are helping. The IBM report says that organizations with security platforms that use artificial intelligence saw 55 percent lower breach costs than those without. Those with an active incident response team also spent less on the follow-up to a breach. The average cost of a data breach for a health care organization is more than $10 million, according to IBM's annual Cost of Data Breach Report | Jeff Roberson/AP Photo A June report from the Government Accountability Office , Congress' watchdog arm, found that insurance companies are raising premiums for cybersecurity incidents and reducing how much they cover. Given the rising costs of cyberattacks and the decline in insurance coverage, the GAO suggested that the Treasury's Federal Insurance Office and the Department of Homeland Security's Cybersecurity and Infrastructure Security Agency assess whether a government insurance option is needed. Per the report, both agencies say they lack the data needed to make that assessment. President Joe Biden signed legislation in March as part of the fiscal 2022 appropriations bill that may provide CISA with some data. The bill, by Gary Peters (D-Mich.), chair of the Senate Homeland Security and Governmental Affairs Committee, sets a schedule for reporting cyberattacks and ransomware payments. Welcome back to Future Pulse, where we explore the convergence of health care and technology. Pharma bad boy Martin Shkreli is back! His latest venture is a Web3 drug discovery platform called Druglike . What can decentralization and crypto do for the pharma industry, you ask? We have no idea! Please send us your wrong answers only. Share your news, tips and feedback with Ben at bleonard@politico.com or Ruth at rreader@politico.com and follow us on Twitter for the latest @_BenLeonard_ and @RuthReader . Send tips securely through SecureDrop, Signal, Telegram or WhatsApp here .   A message from Bamboo Health: According to the National Alliance on Mental Illness, 1 in 5 U.S. adults recently experienced a mental illness. But now, people in need have a lifeline. 988 is live and across the country, states are required to implement crisis lines and support systems. Bamboo Health is here to help you create the coordinated crisis infrastructure you need to support 988. Visit BambooHealth.com/988ready to learn more about our 988 resources.   Tweet of the Week Twitter Washington Watch TELEHEALTH VOTE TEED UP — The House is set to vote this week on a bill by Wyoming Republican Liz Cheney that would extend through the end of 2024 the telehealth flexibilities the Trump administration granted at the pandemic's outset. The legislation would require Medicare to continue reimbursing doctors for telehealth services from patients' homes. Federally qualified health centers and rural health clinics would continue to enjoy their new freedom. Many of the flexibilities are set to terminate five months after the end of the Covid-19 public health emergency, which is slated to expire in October unless HHS Secretary Xavier Becerra extends it for an 11th time. What's next: House Majority Leader Steny Hoyer has slated the Advancing Telehealth Beyond COVID–19 Act for a vote that could come as soon as today. It's expected to pass, but the timeline for Senate consideration is unclear. Process frustration: Some Republicans are irked because they say the vote short-circuits bipartisan negotiations to give a win to Cheney, who has become a Democratic ally for her work on the committee investigating the invasion of the Capitol by supporters of former President Donald Trump. Republicans are likely to vote for it anyway, though they complain that the legislation doesn't allow insurers to cover telehealth bills for people on high-deductible health plans before they hit their deductibles. CHIPS BILL'S A WIN FOR MEDICAL DEVICES — On Tuesday, the Senate advanced legislation backed by medical device makers that would give more than $50 billion in subsidies to the domestic semiconductor industry. Medical device makers buy only 1 percent of the world's semiconductor chips, but that means they've had little leverage to bargain amid a pandemic-driven supply shortage. The chips are needed for devices, such as defibrillators and mammography systems. AdvaMed, the medical device industry trade group, has lobbied for the legislation, which aims to decrease dependence on foreign manufacturers. The legislation passed a procedural vote in the Senate Tuesday. AdvaMed CEO Scott Whitaker told Future Pulse in a statement that the legislation will help shield the industry from future supply shocks by helping to maintain a U.S. manufacturing base. Brian Sapp, chief technology officer at cancer treatment biotech company BrYet, also touted the billions in funding for research and development that could help startups and innovation. But little can be done to alleviate the supply crunch in the short term. The legislation, which the Senate is expected to pass as soon as Wednesday, would take at least a year or two to have an impact, given the lead time to build factories, said Morris Cohen, a professor emeritus of manufacturing and logistics at the University of Pennsylvania's Wharton School. ORACLE PROMISES FIX FOR VA SYSTEM — At a hearing last week, senators aired their displeasure with the Veterans Affairs Department's problematic rollout of its new electronic health records system and its ballooning costs. The latest estimate, from the Institute for Defense Analyses, puts the bill at $50.8 billion over 28 years. The original price tag was $10 billion over 10 years. When the system from contractor Cerner debuted at the VA's Mann-Grandstaff VA Medical Center in Spokane, Wash., in 2020, staff complained that it sent mistaken prescriptions — potentially putting patients' lives in danger. A new report from the VA's inspector general found 60 safety issues at Mann-Grandstaff. Oracle, Cerner's new corporate parent, said it will fix the issues and connect the system to the cloud. It will also foot the bill for the migration. The firm's executive vice president, Mike Sicilia, expects improvements in the next six months.   INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don't miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY .     Around the Nation AMAZON IS BUYING ONE MEDICAL — The $3.9 billion deal still needs sign off from the Federal Trade Commission and Justice Department; however, antitrust lawyers don't foresee an issue. "The principal question is: Where can competition be limited here — that's what the DOJ or FTC should be asking," David Kully, a partner at law firm Holland & Knight who focuses on antitrust, told Future Pulse. "I don't think Amazon's acquisition of what is largely a primary care organization puts it in a position to be able to limit competition in any way." There's been lots of commentary about what the deal means. It's clear Amazon has ambitions to disrupt the health care marketplace. Amazon has its own online pharmacy and a subsidiary drug packaging service, Pillpack. It also provides telemedicine through Amazon Care, works with a network of clinics for in-person care and has experimented with its own in-person clinics. But that's not all. Amazon has built out its Echo device and Alexa voice assistant as a health tool. Hospitals like Northwell Health used the Echo to conduct virtual rounds with patients during the pandemic to preserve protective equipment and limit clinicians' exposure to Covid-19. Alexa offers everything from health tips to telemedicine visits from Teladoc, a virtual health care company.   A message from Bamboo Health:   The $3.9 billion deal between Amazon and One Medical still needs sign off from the FTC and Justice Department; however, antitrust lawyers don't foresee an issue. | Ethan Miller/Getty Images Separately, Amazon is moving health systems into the cloud and selling them on artificial intelligence. The company has one final asset underestimated as a health tool: Amazon Fresh delivery and Whole Foods Market. Organizations at the forefront of battling chronic diseases like obesity, diabetes and high blood pressure are heavily investing in food as medicine. Health and wellness provider Geisinger, for example, has a " food farmacy " where patients can get groceries for ten healthy meals. Between Amazon Fresh and Whole Foods, Amazon is primed to compete. The Next Cures ARTIFICIAL INTELLIGENCE COMBATS SEPSIS —  A trio of new studies has found that artificial intelligence implemented in five hospital systems could reduce mortality from sepsis, a reaction to the infection that's a leading cause of death in hospitals. "There are very few studies that have looked at actual outcomes post-deployment of a model like this," Steven Lin, executive medical director of Stanford's Healthcare AI Applied Research team, told Ruth . "They looked at adoption and what actually made it work — not just that it did work, but how did it work." Bayesian Health scanned the records of nearly 600,000 patients across the hospitals for signs of infection. The studies showed that not only is Bayesian's artificial intelligence good at finding potential sepsis, but it also doesn't inundate doctors with false flags. Early detection was associated with reduced mortality by 18.2 percent.   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today .     What We're Clicking Researchers tried to calculate the impact of health tech companies. It sent startups into a tizzy — Mohana Ravindranath, STAT From CVS to Google, here are 20 health care executives to watch — Fierce Healthcare From Cedar to Ro, here's every digital-health startup that's cut workers so far this year — Rebecca Torrence, Insider   A message from Bamboo Health: The introduction of 988 is an opportunity to change the way the U.S. responds to individuals with a range of behavioral health issues. It will help to direct individuals to the appropriate level of care, instead of diverting them to hospital emergency departments, or even law enforcement. 988 is now live and states must comply with federal law and develop a plan and infrastructure to support their communities' adoption of 988 services. Bamboo Health partners with state government leaders to provide that plan and crisis management infrastructure, along with expert guidance around securing federal funding, to ensure a smooth launch. We also offer ongoing support across your entire 988 ecosystem. Visit BambooHealth.com/988ready to download our crisis management playbook, request a demo, and learn more about our 988 resources.     Follow us

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