Why KYC checks are essential for the Healthcare Industry

• Compare your medical information and credit card data. Which one do you think is more likely to be stolen?
• The answer is your medical information.
• Surprised?
• Well, don’t be. Healthcare data such as medical information of patients is one of the major targets of hackers. Stolen and sold on the black market for a great value, healthcare data is like gold.

Cost of a Data Breach” – Looking at statistics and financial damages that a lack of KYC checks brings

According to Reuters , your medical information is 10x more likely to be sold on the black market than your credit data.

According to a report titled “Cost of a Data Breach 2022” [https://www.ibm.com/resources/cost-data-breach-report-2022], published by IBM and Ponemon, the healthcare sector is the biggest target for security breaches and cyber-attacks. These data breaches aren’t just common but are also of great financial costs.

In 2022, the average data breach cost within healthcare reached a whopping USD 10.10 million, making the healthcare industry have the highest average cost of a data breach, among all industries, for consecutive 12 years. The global average for all other industries is about USD 4.35 million.

All these numbers point towards the need for mandating extensive KYC checks for all businesses dealing with any kind of healthcare data. KYC verification in Nigeria.

Exploring the benefits of KYC checks for the healthcare industry

KYC checks are an important aspect of customer onboarding as well as a regular process for all financial institutions.

When it comes to the healthcare industry the benefits are less talked about.

From effective data collection through KYC customer onboarding to helping curb fraud and abuse, regular KYC checks have today become imperative to be mandated.

KYC checks as means to Improving Patient Safety and Risk Reduction:

For healthcare professionals and businesses, patient safety should be the top priority. Absence of KYC checks can lead to potential risks surrounding the misreporting of patient data and medical history which can result in serious damage to patient safety and security.

For example, an effective KYC procedure entails collecting not just identification information of the patient but also the patient’s history including their past diagnoses and drug history. A manual KYC check can lead to human error in the reporting, and any such error such as mentioning the wrong medication or attributing one person’s medical history to another person can lead to wrong prescriptions or provision of medicines. This can wreak havoc for the patient and also can result in lawsuits against the business.

Utilizing KYC checklists for protection of patient identification data

KYC checks allow for simple but tough measures when it comes to patient data security. As a patient registers with a hospital’s digital patient management system or gets enrolled in the state health management system, everything from their identity features to their medical details gets uploaded and also, updated in real-time. Any hacker that accesses this system can steal this data to sell it illegally.

Stolen patient data can be used for a range of reasons such as pharmaceuticals marketing, drug abuse, and drug/surgical scams under someone else’s ID. For example, in recent news, GoodRx, a digital application offering drug discount services was found to be leaking patient data to Facebook and Google.

Considering the value of patient data, it is essential for strict KYC checks to be set in place to avoid any and all patients rights violations.

Improved customer services and Healthcare Outcomes:

When effective patient management systems are set in place, healthcare services are bound to improve. KYC verification checks offer healthcare improvement services in several ways which include accurate patient identification, fraud prevention, better patient data management, and improved patient safety. Collectively all these implications not just offer better healthcare to patients but also help streamline the work process for doctors, nurses, administration, and other hospital staff.

When patients or customers are offered better services through smart digital KYC providers, it results in better patient satisfaction and trust in the healthcare business, and ultimately, boosts business profitability.

Money Laundering as an unexpected but key reason to implement KYC checks

According to a report by the United State’s National Strategy for Combating Terrorist and Other Illicit Financing, the healthcare industry is one of the prime targets for money laundering schemes.

While primarily, healthcare money laundering schemes include creation of shell companies, in one case from 2019, Alexander Pikus and 26 others were found guilty of healthcare fraud, tax fraud, and money laundering. Pikus had set up a scheme dealing with multiple companies referring patients to specific healthcare providers and ultimately stealing over USD 100 million from Medicare and Medicaid programs.

With over USD 110 billion in illicit funds being generated due to money laundering in the United States, strict implementation of AML/KYC checks on healthcare businesses has become essential for national, business, and citizen safety and security.

Conclusion

KYC checks are mandatory for many kinds of businesses, however, the healthcare business, despite being one of the prime targets of identity thieves, data hackers, and money laundering entities often gets ignored. Ironically, this might be the very reason it is the hot spot for people involved in identity, data, and financial crimes.

With the current soaring crime rates within the healthcare industry, effective KYC checks need to be treated as a priority action. Through KYC processes, healthcare businesses can improve legal compliance as well as their services toward patients. Ease of integration and implementation coupled with the extensive benefits offered makes KYC checks a simple but crucial first line of defense.