Advertising Expenses Increase 64% After a Healthcare Data Breach

Jan 9, 2019


A latest study has investigated the connection between advertising expenses and healthcare data breaches. The study demonstrates hospitals substantially increase advertising expenditure after a data breach.

Healthcare Data Breaches Are the most Expensive to Alleviate

Healthcare data breaches are the most expensive to mitigate, much higher than breaches in other industry segments. As per the Ponemon Institute/IBM Security’s 2018 cost of a data breach research, healthcare data breaches cost, on average, $408 for each misplaced or thieved record. The expenses are two times, or in some cases nearly three times, those in other industry segments.

In addition to the high expenses of alleviating the breaches, the same study verified that the loss of patients to rivals is a very real danger. Data breaches cause harm to a brand and confidence in a business can be easily lost when secret private information is stolen or exposed.

The Ponemon Institute analysis disclosed healthcare companies have a high churn rate following a breach. At 6.7%, it is higher than the financial sector (6.1%), facilities (5.2%), energy (3.0%) and education (2.7%).

Hospitals’ Advertising Expenditure Rises 64% After a Data Breach

In the latest analysis, Sung J. Choi, Ph.D. and M. Eric Johnson, PhD., probed how advertising expenses at hospitals altered after a data breach.

The analysis, which was later published in the American Journal of Managed Care, disclosed hospitals rise advertising expenditure by an average of 64% in the year after a data breach. Advertising expenses were found to be 79% higher over the two-year period following a data breach.

The experts notice that breached hospitals were most likely to be large or teaching hospitals located in urban settings. Hospitals that experienced data breaches had an average of 566 beds and were typically located in areas where there were other hospitals and, as a consequence, high competition for patients.

Hospitals in the control group that had not suffered a data breach paid an average of £238,000 on advertising each year, while hospitals that experienced data breaches paid an average of $817,205 on advertising in the year following a breach – Almost three times as much as the control group. An average of $1.75 million was spent on advertising in the two years following a breach.

The scientists propose that the rise in expenses is an attempt to reduce patient loss to rivals and to assist repair hospitals’ standings.

The scientists note that the data from the study came from 2011-2014 prior to ransomware attacks on hospitals became usual. Given how much more these kinds of data breaches interrupt medical facilities provided by hospitals, publicizing expenditure might be even higher after these kinds of breaches.

“Publicizing and the attempts to repair the damages from a data breach rise healthcare expenses and might divert resources and attention away from initiatives to improve care quality,” wrote the scientists. “Publicizing expenses following a breach are another expenditure to the healthcare system that might be evaded with better data safety.”