Why Is Vendor Risk Management Important

Posted by Tonni Islam

Healthcare providers must rely on several third-party vendors today. While this can help you grow and enhance your healthcare organization, there are also certain risks. This is particularly true when it comes to information security.

Every healthcare company should manage their risk with third-party risk. So in this post, let’s discuss why third party risk management is important and how to ensure you minimize your probability of being exposed.

How Does Third-Party Risk Management Work?

Third-party risk management involves doing your due diligence on your vendors. You can hand them questionnaires, require them to complete certain tasks or checklists, and request that they share certain information with you.

You can do this via third-party risk management software, from ComplyAssistant. Ultimately, you want to understand their security practices. They should be complying with HIPAA and PCI DSS.

This helps protect you and prevent residual legal liabilities from exposing your organization.

Why Is Vendor Risk Management Important?

It’s essential to have proper third-party vendor risk management as a healthcare provider. There are several cyber criminals that target healthcare information and payment information. This could put you at risk for a data breach.

If you do not manage your risk properly with your third-party vendors, you could risk several consequences such as:


If you were found to be in violation of compliance, you could be charged with tens of thousands of dollars in fines.


Your other partners, investors, or patients may lose trust in your organization.

Cyber Criminals

Your trade secrets, proprietary methods, SOPs, and more could be hacked if you don’t have proper third-party vetting.

Continuity of Service

A data breach or system breach could cause your organization to go offline. You may lose access to your data, applications, and even financial information. It’s going to have a devastating effect on any healthcare provider.

How To Perform A Third-Party Risk Management

In addition to the question of “why is it important to have third-party risk management,” the next step is also understanding what to do.

You should do four things:

1. Define Your Risk Criteria

Define your high risk and low risk factors. This will help you prioritize what you focus on first. For instance, PHI and HIPAA are two primary risk priorities.

2. Analyze Your Vendors

Put your vendors into different categories depending on the level of risk. This will help you understand if you need to have ongoing conversations with that particular vendor to enhance their own security.

3. Assess Or Perform An Audit

Audit your vendors using software or questionnaires. If they refuse to do this, this could be a sign that you need to find a new vendor.

4. Make A Decision Based On The Risk

If a vendor continually fails your audits and third-party verifications, then it might be time to do what’s best for your organization.

Remember, when it comes to compliance, violations done by third-party vendors can still expose your company as well.

Why Is Third Party Risk Management Important: Summary

Ultimately healthcare providers are subject to a large amount of liability.

It’s important not just to ensure that your internal processes are compliant — you also must protect your organization and your patients by vetting your partners. Otherwise you could risk financial, legal, and other consequences.

Healthcare Risk Management Software

Software from ComplyAssistant can help your healthcare organization achieve security and efficiency when building a compliance strategy. Our risk management software for healthcare allows you to audit your internal processes and third-party associates.

Instead of using hard copies, you can use an electronic method that automates the workflow. This ensures you are compliant with HIPAA and you can ensure continuity of service without being at risk of security breaches. Reach out to ComplyAssistant to schedule a demo today.

Risk Management