Healthcare Executives Concerned About Supply Chain Issues, Cyberattacks

Healthcare executives see cyberattacks, supply chain disruptions, and tax policy changes as the top risks of 2022, according to a report from PwC.

The PwC Pulse: Managing Business Risks report reflects responses from 722 US executives gathered between August 1 and August 5, 2022.

The executives included chief financial officers, finance leaders, tax leaders, risk management leaders, chief operating officers, and technology leaders. The respondents were from public and private companies in six sectors: health industries, industrial products, consumer markets, financial services, technology, and energy and utilities.

Respondents from the healthcare industry accounted for 7 percent of the survey population.

Cyberattacks topped the list of risks for healthcare executives, with 43 percent of leaders citing them as a serious risk to their organization. Cyberattacks were more of a concern for healthcare executives than other leaders, as 40 percent of respondents overall said they saw cyberattacks as a risk.

However, cyberattacks were still the number one business risk for all sectors.

Healthcare companies have started using technology in real-time detection and defense as the threat of data breaches, ransomware attacks, and patient data leaks increases.

Nearly one in four healthcare executives said they are already seeing benefits from using artificial intelligence in cyber defense, according to the report.

Healthcare executives also saw supply chain disruptions and tax policy changes as more concerning than other leaders. For example, 41 percent of healthcare leaders said these issues were serious business risks compared to 34 percent of other leaders who said supply chain disruptions were a risk and 28 percent who said tax policy changes were a risk.

Leveraging enterprise resource planning (ERP) systems may help healthcare systems improve supply chain management even as the industry experiences disruptions.

Specifically, pharmaceutical and life sciences companies may experience tax policy changes due to the passage of the Inflation Reduction Act, which aims to lower the cost of prescription drugs and health insurance.

Rising production costs and talent acquisition and retention are also creating concerns for the healthcare industry, with 37 percent and 31 percent of healthcare executives citing these areas as business risks.

The healthcare industry has been facing significant staffing shortages in all sectors since the beginning of the COVID-19 pandemic. In addition, new COVID-19 variants are spreading rapidly, adding strain to healthcare professionals’ workflows.

“We expect payer, provider, and pharmaceutical and life sciences executives to continue preparing for those risks, along with the potential for recession as we move further into the inflation cycle,” the report stated.

In the next year, healthcare executives reported plans to invest in IT (59 percent), digital transformation (57 percent), and cybersecurity and privacy (57 percent).

Around half of the healthcare executives (51 percent) said they are increasing investments in research and development (R&D) and innovation compared to 40 percent of respondents overall.

However, executives from other sectors had similar priorities as healthcare leaders. Overall, executives are increasing investments in digital transformation (53 percent), IT (52 percent), cybersecurity and privacy (49 percent), and customer experience (48 percent).

Additionally, 63 percent of businesses have already changed or are planning to change processes to address labor shortages.

Executives also said they are focusing their business strategies on growth (83 percent), revising or enhancing their cyber risk management (79 percent), and transforming business processes (78 percent).