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Healthcare organizations have spent years strengthening their cybersecurity programs through improved security technologies, workforce training, vulnerability management, and incident response and business continuity planning. While these efforts remain essential, many organizations are overlooking one of the fastest-growing sources of cyber risk: third-party vendors and business associates.

Today’s healthcare environment depends on a complex network of external partners. Electronic health record providers, cloud service providers, billing companies, revenue cycle management vendors, telehealth platforms, managed service providers, and medical device manufacturers all play critical roles in patient care and business operations. Many of these organizations store, process, or access protected health information (PHI) and other sensitive data.

Third-Party Data Breaches Are Increasing

Recent industry data suggests that this growing reliance on third parties is creating new opportunities for attackers. According to the 2026 Verizon Data Breach Investigations Report, 48% of breaches involved a third party, a significant increase from previous years that highlights the growing importance of supply chain and vendor-related cyber risks. Additionally, the DBIR found that when assessing remediation over time in third-party cloud exposures, only 23% of third-party organizations remediated missing or improperly secured multifactor authentication (MFA) on their cloud accounts. This is a common point of failure in third-party cloud service provider environments.

The Impact of Vendor Cyberattacks on Healthcare Organizations

For healthcare providers, this trend should raise concern. A breach affecting a trusted vendor can expose patient data, disrupt operations, trigger regulatory reporting requirements, and damage public trust, even if the healthcare organization’s own security controls remain intact. The healthcare sector has already witnessed the impact of third-party incidents. The Change Healthcare cyberattack showed how a single vendor compromise can create widespread operational challenges across hospitals, physician practices, pharmacies, and insurers. Organizations that relied on the affected services experienced interruptions in claims processing, payment operations, and patient care workflows.

Vulnerability Exploitation Is Now the Leading Attack Vector

Compounding this risk is the way attackers are gaining access to systems. DBIR found that vulnerability exploitation became the leading initial access vector, accounting for 31% of breaches and surpassing credential abuse (now 13%). This shift highlights the importance of understanding not only an organization’s own vulnerability management practices, but also those of its vendors and software providers.

Building an Effective Healthcare Vendor Risk Management Program

To address these challenges, healthcare organizations should move beyond treating vendor risk management as a compliance exercise and instead view it as a core cybersecurity function. Effective third-party risk management should include:

• Maintaining a current inventory of all vendors that access PHI, sensitive data, or critical systems.
• Categorizing vendors based on the risk they introduce to the organization.
• Performing security due diligence before onboarding new vendors.
• Reviewing SOC reports, independent assessments, and penetration testing results as part of the vendor onboarding/selection process, and regularly thereafter (we suggest annually for critical third-party vendors).
• Establishing contractual requirements for security controls, breach notification, and incident response cooperation.
• Periodically reassessing critical vendors rather than relying on one-time reviews.
• Including key vendors in tabletop exercises, incident response planning, and business continuity testing.

Managing Third-Party Risk as a Strategic Cybersecurity Priority

Healthcare organizations cannot eliminate third-party risk, nor should they try. Vendors provide specialized capabilities that improve patient care, efficiency, and innovation. However, organizations must recognize that their cybersecurity posture is increasingly influenced by the security practices of the partners they trust.

How FoxPointe Solutions Can Help With Third-Party Risk Assessments

If you have questions about how to implement this practice, applied methodologies for assessing third-party vendor risk, and/or how we can help, please reach out to Brandon Agostinelli.