What healthcare could look like with modern identity
Let me start out by saying we truly believe that most healthcare executives believe they're doing "enough" on cybersecurity.
They've checked the HIPAA compliance boxes, invested in firewalls, and hired a security team. But the healthcare industry is still nearly a decade behind the financial sector in how it manages identity, and that gap is exactly where modern, patient‑centric identity and access management can create a step change in safety, trust, and efficiency.
While healthcare cybersecurity executives have been focused on regulatory compliance, threat actors have been targeting their vulnerabilities with surgical precision (excuse the pun).
The numbers don't lie.
The scale of the problem
In 2024, healthcare organizations experienced the most expensive data breaches of any industry, with an average cost of $9.77 million per breach, more than double the $4.45 million average across all industries. The financial impact is just the beginning.
The Change Healthcare ransomware attack in February 2024 affected 192.7 million Americans, nearly 60% of the entire US population.
This single incident halted critical payment and claims processing systems for two months, forced healthcare providers to work without electronic health records, delayed essential medications and prior authorizations, created severe financial hardship for hospitals and clinics nationwide, and required a $22 million Bitcoin ransom payment with no guarantee the data won't resurface.
Between 2023 and 2024, the number of affected individuals in healthcare breaches increased 58% to more than 289 million. In 2025, an average of 47 large healthcare data breaches were reported each month. This isn’t just an IT problem; it’s a healthcare identity theft problem. Stolen identities are used to open fraudulent accounts, obtain prescriptions, and submit false claims, which makes preventing identity theft in healthcare a clinical safety issue, not a back-office task.
In 2020, healthcare crossed a grim threshold: the first death directly attributed to a ransomware attack. A patient died after critical systems were compromised, forcing the hospital to divert emergency care. This was no longer a theoretical risk.
Why healthcare lags behind
1. Legacy systems
Healthcare organizations operate medical devices and systems with hardware lifespans of 10 to 30 years, but the software becomes obsolete much sooner.
Patient monitors running outdated Windows operating systems, infusion pumps that can't be patched, imaging systems with proprietary software incompatible with security updates.
Hospitals average 10 to 15 connected devices per bed. The 2017 WannaCry ransomware attack crippled the UK's National Health Service precisely because of these vulnerabilities.
2. Lack of basic security controls
The Change Healthcare breach occurred because of one shocking oversight: the lack of multi-factor authentication on a server exposed to the public internet.
MFA has been an industry-standard practice for years. UnitedHealth CEO Andrew Witty testified to Congress: "For some reason, which we continue to investigate, this particular server did not have MFA on it." The result was the largest healthcare breach in history.
Poor network segmentation allowed lateral movement across systems, outdated IT infrastructure couldn't be quickly isolated, and inadequate incident response planning led to a two-month recovery period.
3. The budget trap
Healthcare organizations face crushing financial pressures, with many hospitals operating in the red or barely breaking even.
When budgets are tight, cybersecurity investments compete with patient care resources and security often loses. Financial services typically allocates 10 to 15% of IT budgets to cybersecurity. Healthcare averages only 7%, yet faces two to three times more cyberattacks than other industries. Patient data sells for $408 per record compared to $148 for non-health records, making healthcare a high-value, under-defended target.
4. The skills crisis
Even when healthcare organizations invest in security tools, they lack trained personnel to operate them effectively.
The cybersecurity workforce shortage hits healthcare particularly hard, as organizations can't compete with tech companies on compensation. The tools exist. The teams to run them often don't.
The third-party time bomb
Healthcare's digital transformation has created an exploding attack surface. Hospitals connect to insurers, clearinghouses, billing companies, and countless vendors. Each connection is a potential vulnerability.
70% of hospitals surveyed experienced a significant security incident in the past 12 months. Change Healthcare processed 15 billion medical claims annually, 40% of all US claims.
When it fell, the entire healthcare ecosystem felt the impact. This single point of failure demonstrates how third-party vendors can become catastrophic vulnerabilities.
For many organizations, third parties now effectively are their healthcare identity verification and claims infrastructure, which means any weakness in those vendor connections directly undermines the strength of your identity and access management.
How to fix it
1. Implement multi-factor authentication everywhere
MFA is now a baseline requirement under the proposed HIPAA Security Rule updates from December 2024 covering remote access, administrative accounts, patient data systems, and third-party vendor access.
FIDO2 passwordless authentication goes further. Unlike traditional MFA, its cryptographic public-key model cannot be intercepted, stolen, or replayed, closing the credential theft vector responsible for 49% of all data breaches.
Based on our own client deployments, healthcare organizations implementing passwordless authentication report 90% reductions in authentication-related support tickets, 60% faster login times for clinical staff, and zero successful phishing attacks against FIDO2-protected accounts.
Strong authentication is also the foundation of identity management in healthcare. If you can’t reliably verify who is accessing what, no amount of logging or monitoring will deliver truly secure healthcare identity solutions for clinicians, staff, and patients.
This is where specialized identity verification software for healthcare comes in. Platforms like 1Kosmos combine biometric matching, document verification, and strong authentication so providers can bind a real person to a digital healthcare identity once, then trust that identity across every channel — on-site, in the call center, and online.
2. Solve the identity verification problem
Healthcare's patient matching problem costs $6 billion annually due to mismatched records. Nearly 50% of patient records are mismatched when patients visit multiple facilities. That's a failure of identity proofing in healthcare, not just a database issue.
Biometric healthcare identity verification at the point of care-using fingerprint or facial recognition-prevents healthcare identity theft ($13.4 billion annual problem) and ensures the correct patient receives the correct treatment.
For telehealth and patient portals, facial biometric matching with government-issued ID delivers strong identity proofing in healthcare before you ever create an account, which prevents account takeover and prescription fraud downstream.
3. Deploy network segmentation
Isolate medical devices on dedicated VLANs, separate clinical systems from administrative systems, and implement least-privilege access controls. Network segmentation could have limited the Change Healthcare breach from affecting 40% of US medical claims.
4. Create and test incident response plans
72-hour recovery objectives should be the baseline. Plans need clear communication protocols, documented procedures for isolating affected systems, and pre-established relationships with forensics and recovery vendors. Test them at least annually.
5. Conduct risk assessments on third-party vendors
Annual security assessments of all business associates, verification of security controls through independent audits, and continuous monitoring of vendor security posture. Clear contractual requirements for breach notification.
Medium and long-term priorities
Build a complete technology asset inventory and network map
You can't protect what you don't know you have. The proposed HIPAA updates require a full inventory of all technology assets handling patient data, with updates at least annually and after any environmental changes.
Encrypt everything
The updated HIPAA Security Rule proposes mandatory encryption for data at rest and data in transit, with limited exceptions only for documented technical constraints.
Create a legacy system migration roadmap
Inventory all medical devices and their software versions, identify devices that cannot receive security updates, and prioritize replacement based on criticality and vulnerability.
For irreplaceable legacy systems, consider implementing compensating controls through isolated networks and enhanced monitoring. Building or outsourcing a Security Operations Center with 24/7 monitoring, automated threat detection, and endpoint detection and response on all devices is also recommended.
Adopt zero trust architecture
Move from perimeter-based security to a model that continuously verifies all access requests and assumes breach to limit lateral movement.
Invest in security culture
Human error still leads as a cause of breaches. Mandatory annual training, phishing simulation exercises, clear reporting mechanisms, and leadership accountability for security metrics all matter.
What changes when you modernize healthcare identity
When healthcare organizations modernize identity, the benefits go far beyond avoiding the next headline breach.
At $9.77 million per breach, plus regulatory fines, lawsuits, operational disruption, and reputational damage, every month of inaction is a bet against your organization's survival.
The proposed HIPAA Security Rule updates signal a fundamental shift. The era of "addressable" security requirements is ending. Regulators are moving toward mandatory, specific cybersecurity controls because voluntary measures have failed to protect patients.
Healthcare organizations that prioritize cybersecurity see 81% faster breach detection and containment, 58% lower breach costs compared to industry average, reduced cyber insurance premiums, and greater operational resilience during attacks.
Turn identity into an advantage, not a barrier
In financial services, this journey to strong identity and phishing‑resistant authentication is largely complete. Healthcare now has an opportunity to skip the painful learning curve and adopt what already works.
That means passwordless access for clinicians, high‑assurance identity verification for patients, and a unified view of who is doing what across every channel. Done well, identity management in healthcare becomes an enabler of better care, not a barrier.
The opportunity for healthcare is clear: turn identity from your biggest vulnerability into a lasting advantage for your patients, your clinicians, and your organization.
Decade-old identity infrastructure wasn't built for NIST 800-63-3, updated HIPAA Security Rules, or TEFCA, and it's now being asked to handle all three. See how health systems are closing that gap before regulators force the issue.
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FAQs
How can healthcare organizations prevent identity theft in healthcare without slowing care delivery?
You prevent healthcare identity theft by getting identity right at the front door, not by adding more passwords. That means strong identity proofing in healthcare when you first enroll a patient, binding them to a verified healthcare identity using biometrics and government ID, and then giving clinicians fast, passwordless access to that trusted record so you tighten security and actually speed up care instead of fighting your own controls.
What's the difference between identity verification software for healthcare and generic IAM tools?
Generic IAM tools manage access to applications, but identity verification software for healthcare is designed to prove that the person behind the keyboard or at the bedside is who they claim to be, every time. In practice, you want both: a modern identity and access management in healthcare platform to control access plus a healthcare-grade verification layer (like 1Kosmos) that ties those access decisions to a verified, high-assurance identity across in-person, telehealth, and portal channels.
Where should we start if our healthcare identity strategy feels behind?
Start with one or two high-impact workflows where identity failure hurts the most, such as remote access for clinicians and patient portal enrollment, and modernize those with passwordless authentication and biometric healthcare identity verification. Once you prove you can prevent account takeover and healthcare identity theft in those flows without adding friction, it becomes much easier to extend the same pattern across other systems and build a long-term roadmap for identity management in healthcare.
