How to Retain HIPPA Compliance While Being Budget-Friendly
October 1, 2022

How to Retain HIPPA Compliance While Being Budget-Friendly

Modern healthcare and top-tier R&D initiatives are notoriously costly. The healthcare business is known for being pricey. According to estimates, the US spends 17% of its GDP on healthcare. That comes to nearly $12,000 per person. Is it really conceivable to be cost-effective in a sector as extensively regulated as the US healthcare system, given these enormous numbers?

Where does the HIPPA apply?

HIPAA is a set of privacy and security rules that mandate stringent security precautions for hospitals, doctors, and other businesses like health insurers and health maintenance organisations that either keep or handle patients’ confidential medical information. Organizations that retain such information are obligated to disclose these rights in writing in accordance with HIPAA, which establishes the rights of persons who are the subject of medical records.

On August 21st, 1996, President Clinton presented and signed into law the Health Insurance Portability and Accountability Act (HIPAA), which later became a component of the Social Security Act. In essence, it served to protect patient data confidentially. Only in 2003, with the adoption of the Privacy Rule amendment, which expressly addresses electronic patient data, did the financial toll of compliance become apparent. There is little question in the minds of many people that the implementation of that regulation and the expense of patient protection increased the price of US healthcare.

Healthcare providers had to pay compliance officers to ensure that the Privacy Rule provisions were correctly implemented, which resulted in expenses. Two additional urgent expenses also had to be covered: first, implementing sophisticated IT solutions to fulfil the required technological protections of HIPAA; and second, requiring each employee to participate in a training programme on HIPAA compliance.

Naturally, this has increased the financial strain on the sector and increased pressure on medical personnel. However, it is crucial to pause and consider what the consequences of disobeying the law could be. In addition to endangering the privacy of their patients, a compromise would probably result in substantially higher actual expenses. Penalties that would be imposed under the Final Omnibus Rule of 2013 as well as the possibility of lost business and reputational harm would be included in the cost.

The fines levied vary from $58,490 for small violations (per violation) all the way up to $1,785,651 (per violation) for the most serious tier 4 offences, therefore the consequences are substantial if an organisation is found to be in violation. Healthcare organisations must consider the expenses of establishing HIPAA compliance as well as the penalties for noncompliance. Paying a professional to execute HIPAA compliance is always a more cost-effective choice.

Any company must spend to maintain compliance laws, yet cost-cutting measures may reduce costs without compromising data integrity. Whether the corporation decides to build whole new IT systems and business processes, only the absolute minimal needs, or anything in between, costs will vary.

The Price of HIPAA-Compliant Management

When the Privacy Rule was first proposed in 2003, there were significant worries that the expenses associated with its implementation would be prohibitive and would be passed on to patients. Some of the demands place a greater burden on a team focused only on compliance.

The obligatory risk assessment and privacy gap analysis, both of which take months to complete and need bi-annual assessments, are only two of the significant administrative obligations included. Any new procedures had to be explained, peer reviewed, and routinely updated. Subsequently, new policies had to be made and put into effect, and staff members had to get training on how to preserve the privacy laws.

Bringing on a specialised HIPAA consultant organisation is an efficient way to combat the inescapable expenditures. For busy healthcare professionals, it may be challenging to manage the logistics of keeping a complying medical practise; outsourcing this task delivers expertise and is often cost-effective.

Use the cloud to outsource

By moving critical IT infrastructure, including IT systems, databases, and medical applications, to the cloud, several providers have seen cost reductions. Designing, maintaining, and upgrading a fast developing computing platform is a difficult and costly issue for healthcare practises that retain their IT equipment on-site.

With predictable monthly expenditures, a cloud-first story enables the budget to transition from capital expenditure (CAPEX) to operational expenditure (OPEX). Furthermore, there is no further expenditure for pricey server, network, and storage gear, which immediately loses value after being unboxed.

Core business workloads are conducted on-premises in the majority of healthcare organisations, while other services, including telephone, video conferencing, and productivity office suites, are provided as SaaS. However, experts contend that for healthcare to significantly reduce costs, all production workloads must be moved to the cloud.

Even if it’s a sizable task that needs meticulous preparation, you don’t have to do it all by yourself. You may save time and money by outsourcing to a managed service provider or HIPAA cloud hosting expert. You will soon be able to shut pricey onsite computer rooms since you won’t be responsible for paying for licence, electricity, cooling, and core data centre infrastructure.

The client is ultimately in charge of ensuring the security of the data, and the contracts specify who is responsible for what and when. Additional cost-effective managed services, such as a managed backup and disaster recovery solution, may be used, nevertheless. A system that satisfies the need to preserve and archive important patient data while also leveraging encrypted backups from an encrypted data source to secure personal health information (PHI) data from deletion or modification.

To ensure constant access to PHI, business continuity and disaster recovery services are very costly. Tens of millions of dollars will be spent on server hardware, synchronous network, storage, and licence charges, colocation site rent, and a crew to maintain the platform’s 24/7 availability.

Avoid hiring technical engineers.

A large team of subject matter experts, as well as a team of front-line staff available around-the-clock, are needed to manage HIPAA compliant infrastructure. Particularly if you want to invest in the top personnel, IT salaries are among the highest in the industry. Again, your labour cost is drastically reduced by outsourcing this duty.

Additionally, you gain from the platform’s daily administration and technical support being delegated. When infrastructure reaches end-of-life support, it becomes the provider’s obligation to maintain everything patched and safe as well as to bear the expense of costly hardware refresh programmes.

Technical Protection

Identity services, user accounts, access control lists, permission management, and multi-factor authentication are a few of the less visible technological measures that shield your medical business from hefty penalties. Each of these services is costly to establish, operate, and maintain if done internally, but they are simple to add on from a HIPAA compliance provider.

The Office for Civil Rights (OCR) said on March 17, 2020, that “enforcement discretion and waiving penalties for HIPAA breaches” were being adopted, taking advantage of the recent easing of the enforcement standards. For the first time, doctors were permitted to schedule telemedicine visits using third-party technologies like Let’s Talk, Apple FaceTime, Google Hangouts, Zoom, or Skype. offering patients more options while also potentially saving a lot of money on licencing. Keep in mind that these guidelines are only in place temporarily.


To sum up, there will unavoidably be expenses associated with becoming and maintaining HIPAA compliance. The crucial step is to comprehend how effectively that security is for your patient’s data, as well as the total cost of ownership to have that technological solution in place, unless you are a medical startup, in which case you probably already have HIPAA compliant systems in place.

Comparing monolithic hosting to the cloud reveals how pricey it is. You are in complete control of the infrastructure, but updating it might result in significant savings. Spend some time narrowing down a list of trustworthy HIPAA-compliant hosting companies, checking out the administrative, technological, and physical security measures they may provide, and then comparing prices.

Even while cost is always a practical factor, choosing the least expensive hosting service is not the only thing to take into account. You must strike the ideal balance between cost, functionality, and security. Cloud services may significantly reduce your management and administrative workload, boost productivity with more scalability, and provide operational flexibility.

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