The Alarming Rise of Cyber Risks in Healthcare
Australia’s healthcare sector is now one of the top targets for cybercriminals. Patient data, research findings, and billing records are goldmines for attackers, and the industry’s heavy reliance on continuous operations makes it an easy mark.
When systems go down, patient care halts, investigations are triggered, and the recovery process can cost millions.
What the Figures Show?
Recent reports paint a concerning picture:
- Average cost per breach: AUD $10.93 million (IBM, 2023) — nearly twice that of the finance sector.
- Breach frequency: Between July 2023 and June 2024, healthcare reported more cyber incidents than any other non-government sector.
- In early 2024 alone: 102 breaches were reported — the highest of any industry.
- Personal data exposure: 9 in 10 breaches involved sensitive information such as patient or financial data.
These statistics confirm one thing: cyber threats in healthcare aren’t hypothetical—they’re happening right now.
Generative AI: Both Tool and Threat
Artificial intelligence is reshaping both sides of the cybersecurity battle. Attackers use AI-powered phishing, deepfakes, and automated vulnerability scans to infiltrate systems faster than ever.
Meanwhile, healthcare organisations are leveraging AI for threat detection, anomaly monitoring, and faster response times.
However, this arms race cuts both ways.
- Holocron Cyber recorded a 63% rise in AI-driven ransomware hitting Australian medical practices in just three months.
- CyberCX warned of a 71% year-on-year global surge in healthcare attacks, driven by unchecked AI innovation.
Without strong oversight and updated controls, even advanced AI defences can become double-edged swords.
Which Healthcare SMEs Are Most at Risk?
Contrary to popular belief, it’s not the big hospitals that are hit hardest. Smaller healthcare SMEs like GP clinics, physiotherapy practices, consultancies, and aged care homes face up to 10 times higher attack rates.
Why?
- Outdated technology: Many operate on old or unsupported systems.
- Limited IT resources: Smaller budgets mean slower patching and weaker monitoring.
- High data sensitivity: Even a single patient record can be sold multiple times on the dark web.
Aged care providers, in particular, have faced a rise in extortion-based cyber incidents and data leaks involving personal care records, according to Australian Ageing Agenda.
The Cost and Downtime Impact
The financial and operational fallout of ransomware attacks in Australian healthcare is staggering:
- Ransomware incidents hit a four-year record high.
- Only 20% of organisations recovered within a week.
- Average downtime: 34 days before full restoration.
- Service interruptions: 73% of attacks delayed or disrupted patient care.
Compliance costs: Smaller healthcare providers spent more than $120 million in the past year to meet data security requirements.
The ongoing challenge? Business email compromise (BEC).
CyberCX found that three-quarters of BEC breaches bypassed MFA through session hijacking — proving even secure setups can be compromised if not actively monitored.
How Healthcare SMEs Can Strengthen Their Cyber Defences
To stay ahead of evolving threats, healthcare organisations should act on the following insurer-endorsed steps:
1. Update Legacy Systems
Replace or patch outdated software, close known vulnerabilities, and phase out unsupported applications.
2. Secure Authentication
Use multi-factor authentication (MFA), monitor for session hijacks, and restrict staff access to sensitive information.
3. Build Staff Awareness
Regular phishing simulations and digital hygiene training reduce the risk of human error — the top cause of cyber breaches.
4. Backup and Recovery Planning
Schedule automatic, encrypted backups. Test recovery drills regularly and maintain an off-site or cloud-based copy.
5. Review Cyber Insurance Cover
Check whether your insurance covers modern threats such as AI-assisted attacks, ransomware extortion, regulatory fines, and business downtime.
Why It Matters?
A quarter of Australian hospitals still lack robust cybersecurity protocols, leaving not only patients, but also clinicians and suppliers, vulnerable to fraud and identity theft.
- While 63% of data breaches affected 100 or fewer people, one incident reported affected over 10 million Australians. This is the second breach recorded to affect more than 10 million Australians and is the highest number of individuals affected by a breach since the NDB scheme came into effect. Source : www.oaic.gov.au
- $4.2 million for failing to take reasonable steps to protect the personal data on Medlab Pathology’s IT systems. Source : www.thelawyermag.com/au
Failing to act on cyber resilience isn’t just a financial risk, it’s a reputational one.
Cover That Keeps Pace with Cyber Threats
At Global Insurance Solutions, we help Australian healthcare providers safeguard their operations from the growing wave of cybercrime.
Our team reviews your current coverage, identifies hidden gaps, and ensures your business is financially protected against the next cyber event, no matter how advanced the attack.
Learn About Cyber Insurance
Cyber risks in healthcare aren’t a future problem — they’re happening now.
Stop risking million-dollar penalties.
Secure your compliance posture and sensitive patient data.
Schedule your defensive strategy review at globalinsurancesolutions.com.au
or dial 1300 710 665 now.
Frequently Asked Questions (FAQs)
1. Why is the healthcare industry such a target for cyber attacks?
Healthcare organisations hold highly sensitive data from patient records and billing information to medical research. This makes them prime targets for cybercriminals who know the industry cannot afford downtime or service interruptions.
2. What is the most common cyber threat in healthcare right now?
Ransomware remains the leading threat, followed by phishing and business email compromise (BEC). These attacks often exploit outdated systems and untrained staff to gain access to networks.
3. How does generative AI increase cyber risk in healthcare?
Attackers are now using AI to automate phishing emails, create convincing deepfakes, and identify weak points in systems. Without robust controls, AI can make breaches faster and harder to detect.
4. Are small healthcare practices really at risk of cyber attacks?
Yes. GP clinics, physiotherapy practices, and aged care homes face up to ten times more attacks than hospitals because of outdated systems and limited IT budgets.
5. How long does it take to recover from a ransomware attack?
Industry data shows only one in five healthcare organisations recover within a week. Most experience at least 30 days of downtime, causing major disruption to patient care and operations.
6. How does a cyber breach significantly impact the finances of the healthcare sector?
The financial fallout from a healthcare cyber breach is severe and disproportionately high, often reaching levels significantly greater than in other targeted sectors like financial services. The total cost is a multifaceted burden that includes substantial expenses for breach recovery, the loss of operational income, heavy regulatory fines for non-compliance, and the long-term detriment of reputational damage.
7. Does cyber insurance cover ransomware and data breaches?
Yes, most modern cyber insurance policies include cover for ransomware, data restoration, business interruption, and regulatory fines. However, coverage depends on the policy wording and whether risk controls (like MFA) were in place before the incident.
8. What can healthcare providers do to prevent cyber incidents?
Regularly patch systems, enable multi-factor authentication, train staff against phishing, test data backups, and review insurance coverage to ensure it reflects current AI-driven risks.
9. How often should healthcare providers review their cyber insurance policy?
At least once a year, or whenever major technology upgrades occur. The cyber threat landscape evolves quickly, and policy terms must keep pace with new risks and compliance requirements.
Important notice
This article is of a general nature only and does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete, so please discuss the full details with your insurance broker as to whether these types of insurance are appropriate for you. Deductibles, exclusions and limits apply. You should consider any relevant Target Market Determination and Product Disclosure Statement in deciding whether to buy or renew these types of insurance. Various insurers issue these types of insurance and cover can differ between insurers.
This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.
Information is current as at the date the article is written as specified within it but is subject to change. Global Insurance Solutions Pty Ltd make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content. All information is subject to copyright and may not be reproduced without the prior written consent of Global Insurance Solutions Pty Ltd.
Risk Advisor, Insurance Broker & Director
With around 15 years in insurance, Yuvi Singh is a passionate Risk Advisor, Director, and Insurance Broker at Global Insurance Solutions. Backed by a Commerce degree and ANZIIF diploma, Yuvi leads a team servicing SMEs across industries like manufacturing, logistics, fuel, IT, and more. At GIS, clients benefit from tailored, transparent advice, access to 150+ insurers, and end-to-end risk solutions. Recognised as a 2022 Insurance Magazine Rising Star and 2024 Top Insurance Broker by Insurance Business Australia, Yuvi delivers flexible, effective outcomes with integrity and innovation.