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How I would use this information to fund my Health Systems Cyber Program.

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A massive cyberattack May 1 cost Scripps Health $112.7 million through the end of June, with lost revenue bearing most of the cost.

The attack led to a major disruption in patient care and forced providers to use paper records. Scripps said at the time that its facilities remained open for care but hasn’t until now divulged the financial impact of the attack.

Scripps restored all its systems May 26 after hiring computer consulting and forensic firms to help investigate the attack and restore its systems.

Scripps added that nearly $6 million in insurance recovery “was accrued in other operating revenues in June 2021.”

It expects to get $14.1 million in insurance recoveries by the end of the fiscal year “once accounting requirements for recognition have been met,” the report said.

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Scripps is a $3B+ system that lost over $100M from a 30 day ransomeware event. I'd use that information to estimate my health systems event exposure and start talking about avoiding that event with an investment of about 10% of that cost over the next 18 months. 

Just a thought.

https://www.fiercehealthcare.com/hospitals/may-cyber-attack-cost-scripps-nearly-113m-lost-revenue-more-costs

#healthcare #healthIT #cio #cmio #himss #chime

Transcript

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  Today in Health IT funding your cybersecurity program. My name is Bill Russell. I'm a former CIO for a 16 hospital system and creator of this week in Health, IT at channel dedicated to keeping health IT staff current and engaged. VMware has been con.

VMware has been committed to our mission of providing relevant content to health IT professionals since the start. They recently completed an executive study with MIT on the top Healthcare trends, shaping it, resilience, covering how the pandemic drove unique transformation in healthcare. This is just one of many resources they have for healthcare professionals.

For this and several other great content pieces, check out vmware.com/go/healthcare. All right, here's today's story. . This comes from Fierce Healthcare. Title of the story is May Cyber Attack Costs Scripts Nearly 113 million in lost revenue and more Additional Costs. Let me give you some of the excerpts.

A massive cyber attack May 1st cost Scripps Health 112.7 million through the end of June with lost revenue bearing most of the costs. The nonprofit San Diego based hospital system reported the impact during its second quarter earnings filed Tuesday. The attack led to a major disruption in patient care and forced providers to use paper records.

Scripps said at the time that its facilities remained open for care, but hasn't until now divulged the financial impact of the attack. Scripps restored all of its systems May 26th after hiring computer consulting and forensic firms to help investigate the attack and restore its systems. As of June 30th, we estimate the total loss revenue to be 91.6 million.

And incremental costs incurred to address the cybersecurity incident and recovery were estimated at 21.1 million. The earnings report said, lemme give you a couple more numbers. Scripps added that nearly 6 million in insurance recovery was accrued in other operating revenues in June, 2021. It expects to get 14.1 million in insurance recoveries by the end of the fiscal year once accounting requirements for recognition have been met.

The report said, but the system operating revenue for the nine months that ended in June 30th was 78 million, which was 3.2% higher than the nine month period that ended in June, 2020. Which makes sense, right? And they go on to say this is primarily attributable to higher patient volumes in the current year due to significant covid volume reductions in fiscal year 20.

Partially offset by lost revenue in its current year from the cybersecurity incident, which led to the volume reductions during the May, 2021 from emergency room diversions and postponement of elective surgeries. The earnings report said, all right, as you know with all of these stories, I try to do a so what?

Why does this matter? Why are we talking about it? Here's my so what. If I were trying to fund my cyber program right now, this is the narrative I would be telling my board. Here's the Scripps information. Founded in 1924 by philanthropist Ellen Browning. Scripps Scripps Health is a $3.2 billion, not-for-profit integrated health system based in San Diego, California.

Scripps treats more than 700,000 patients annually. Through dedication of 2,600 affiliated physicians and more than 15,000 employees, among its five acute care hospital campuses, home healthcare services, and ambulatory care networks of physician offices, and 29 outpatient centers and clinics. Scripps also offers payer products and population health services through Scripps Accountable Care Organization, their A CO Scripps Health Plan.

And customize narrow network plans in collaboration with third party payers. Alright, so I would know that information. I would understand what it is in relation to the system that I would be representing. Then I would say this 30 days post ransomware attack, they lost a hundred million in revenue, recovered roughly 15 million from insurance.

the reputation damage was pretty significant. The trust in the administration has taken a blow. Every conversation about scripts comes back to, or starts with the ransomware event. Kind of hard to get your heart program noticed or your community benefit noticed when every conversation's around the ransomware event based on their size and our side, I would create an estimate.

I would estimate that. If we were to incur a ransomware event, the downtime cost the cost of lost revenue to us. Not even reputational risk, but the cost of lost revenue to us would be X amount. And then I would have this simple statement. I'd like to get 10% of that number in the next 18 months to shore up our cyber program to ensure that we don't have to go through this type of event because the loss is far greater.

Than just the revenue. That's my narrative. That's how I would be asking for money to shore up our system, and I definitely would be asking for money to shore up our system and I'd be spending some extra money right now on cybersecurity and specifically protecting against ransomware events. That's all for today.

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