To comprehend the full picture of why compliance is so important, it is necessary to consider the consequences commonly associated with non-compliance within the context of healthcare.
Fines, penalties, & other fees
Failing to comply with regulatory standards can result in imposed fines and penalties and other fees for the organizations involved. While these fines can vary depending on the offense, they can get lofty pretty quickly. For instance, the General Data Protection Regulation (GDBR) offers low-tier fines of up to $11.03 million, or two percent of the company’s annual revenue, which can cause immense financial losses. Not to mention the loss of assets, as you could have commodities confiscated if no compliant action is taken. Non-compliance for healthcare businesses could result in stupendous monetary consequences, and you will find that the cost of maintaining compliance is far easier to manage.
As part of a chain of events, once you have evidence of non-compliance, customers are less likely to trust your organization. Patients need to have the confidence that their data is in safe hands, and if you cannot maintain and support this, then your clients are more likely to resort to using other competitors. Privacy is of utmost importance, especially when it comes to sensitive healthcare information, and so any fines or penalties will negatively impact your business. You will have to work twice as hard to retain customers, and you may need to invest in more opportunities to attract patients to your clinic.
Loss in revenue
In some cases, failing to comply with security and privacy standards could result in a cease of operations. This can be incredibly costly, with temporary disabling resulting in high overhead costs, with no steady income available to supplement the resource. This is often the situation for organizations after facing data and security breaches, as the large incurred costs make it vastly difficult to recover. A loss in revenue due to non-compliance also means that there are less financial means to invest in necessary medical equipment and services, meaning that the quality of service could also potentially go down.
Loss in productivity
Non-compliance can also result in severe losses in productivity for your business, as security breach regulations may demand that you limit or disable areas of operations. This can restrict your working capacity, as reduced labor will lead to assessing fewer patients, meaning that you cannot effectively treat the same number of people that previous resources allowed.
Perhaps the most significant consequence of failing to comply with privacy regulations and laws, is the potential blow to your reputation. If you’re lucky, this may not be a permanent hit, however, it is very difficult to establish trust in customers when there are various alternatives available. The restoration process could be a long road for your company, and you will likely suffer across most business processes.